By Nate Raymond
BOSTON (Reuters) -EBay has agreed to pay $3 million to resolve a U.S. criminal probe into a campaign by several of its employees to stalk and harass a Massachusetts couple whose online newsletter was viewed as critical of the e-commerce company.
Federal prosecutors in Boston said on Thursday that eBay (NASDAQ:EBAY) had entered into a deferred prosecution agreement to resolve the case after seven former eBay workers admitted to participating in an extensive campaign in 2019 that involved sending the couple cockroaches, fly larvae and a bloody Halloween pig mask.
The victims were David and Ina Steiner, a married couple in Natick, Massachusetts, who produce the newsletter EcommerceBytes and have sued eBay over what they say was a relentless campaign by its employees to terrorize them.
The $3 million fine represents the maximum penalty prosecutors said they could seek after charging eBay with six counts of stalking, obstruction of justice and witness tampering for what they called its "absolutely horrific" criminal conduct.
"The company's employees and contractors involved in this campaign put the victims through pure hell, in a petrifying campaign aimed at silencing their reporting and protecting the eBay brand," acting U.S. Attorney Joshua Levy said in a statement.
The San Jose, California-based company admitted to facts about its conduct and agreed to retain an independent corporate compliance monitor for three years and must make changes to its compliance program. Charges would be dropped after three years if it complies with the deal.
EBay CEO Jamie Iannone in a statement called his company's conduct in 2019 "wrong and reprehensible," and he said eBay was "committed to upholding high standards of conduct and ethics and to making things right with the Steiners."
Prosecutors said senior executives deemed the Steiners' newsletter critical of eBay, and in August 2019 then-Chief Executive Devin Wenig texted another executive that it was time to "take her down," referring to Ina Steiner.
Wenig, a former Thomson Reuters (NYSE:TRI) executive who stepped down as eBay's CEO in September 2019, was not charged, and his spokesman has said Wenig had "absolutely zero knowledge" of the actions eBay's employees undertook. A spokesperson declined comment on Thursday.
Overseeing the harassment campaign was Jim Baugh, a former Central Intelligence Agency employee who at the time served as eBay's senior director of safety and security. His lawyer has said he felt pressure to do something.
At Baugh's direction, the Steiners received anonymous, harassing Twitter messages, bizarre emails, and disturbing home deliveries that included spiders, a funeral wreath and a book on surviving the loss of a spouse, prosecutors said.
In August 2019, Baugh and others traveled from California to Natick to surveil the Steiners and try to install a GPS tracking device on their car. The Steiners spotted them and contacted police, prompting the federal investigation.
Baugh was sentenced in September 2022 to 57 months in prison. Others in the case have received punishments ranging from home confinement to two years in prison.
The Steiners' lawsuit remains pending and is set for trial in March 2025. In a statement, they said they are determined to "do whatever we possibly can to ensure that no corporation ever feels that the option exists for them to squash a person's First Amendment rights."