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New Zealand Scammer to be Sentenced for Selling Web Hosting Business Three Times

by Justin Lee

After four years of police investigation and court hearings, the owner of a former Kaitaia, New Zealand web hosting company NZ Website Design and Web Hosting 2010 will finally be sentenced next week in a case involving nearly $70,000 in fraud using auction website Trade Me, according to a report by The Northern Advocate.

And while this kind of fraud seems unlikely to occur in the web hosting field, it certainly serves as a cautionary tale for any prospective buyer who is looking to acquire a hosting business.

Former NZ Website Design and Web Hosting 2010 director Paul Mathew Barr had earlier pleaded guilty to three charges of obtaining by deception regarding an advertisment he had posted under the screen name “paulb8″ on Trade Me’s classified businesses for sale section in 2008 to sell the hosting business.

Barr had been accused of selling the web hosting business to three individuals for which he earned a total of nearly $70,000, which is considered the largest amount anyone has successfully defrauded using Trade Me.

Just like classified advertisements in newspapers, Trade Me offers classified services where the seller provides contact details for prospective buyers.

According to a Trade Me spokesman, the auction website first “became aware through complaints made to police that individuals responding to advertising for the business had paid the seller for the business, but allegedly not received what they had paid for”.

For more than 4 years, the case had been investigated by local police and heard by the courts.

A spokesman for Trade Me said the auction website “disabled the seller’s membership and are really keen to see the courts order full reparation for the buyers,” with hopes that “the courts take a firm stance and order a custodial sentence as well,” he said.

Talk back: Have you ever experienced fraud in a hosting acquisition situation? Let us know in the comments.

Wednesday, Sep 5th, 2012