eBay Fined $3 Million for Sending Live Cockroaches and Spiders to Critics

After a group of eBay employees behaved like trashy John Waters characters — mailing people live spiders and cockroaches — the company is paying the price.

The Justice Department is charging eBay $3 million as a criminal penalty for carrying out a harassment and intimidation campaign against a Massachusetts couple, which involved mailing them creepy-crawlies and other stomach-churning packages. Other items included a bloody pig mask, a fetal pig, a funeral wreath, and a book about grieving the loss of a spouse. The employees also threatened to visit them at their home, and they published a Craigslist ad inviting people to the couple’s home for sex. The incident, according to a filing published on Thursday, took place in 2019, and the Justice Department says the undesirable mail was in retaliation for the couple writing negatively about eBay in an e-newsletter.

Between Aug. 5 and Aug. 23., 2019, eBay’s former Senior Director of Safety and Security, Jim Baugh, and six members of eBay’s security team targeted David and Ina Steiner for publishing a newsletter called EcommerceBytes that criticized the auction site, according to the filing. One of the stories that Baugh objected to focused on a lawsuit eBay filed against Amazon, accusing it of stealing sellers. The harassment campaign began after Baugh and the Steiners began communication with one another.

The Steiners eventually contacted local police to complain of harassment. Baugh initially denied his and his employees’ actions and they deleted messages they sent to each other, per the filing.

The company, which has since admitted to the wrongdoing, was charged with several counts of stalking, one count of witness tampering, and another of obstructing justice. The $3 million fine is the statutory maximum for these offenses. eBay must also hire an independent compliance monitor for the next three years. The company has entered into a deferred prosecution agreement, which may find the charges dismissed if they stick with the agreement.

“eBay engaged in absolutely horrific, criminal conduct,” acting United States Attorney Joshua S. Levy said in a statement. “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. We left no stone unturned in our mission to hold accountable every individual who turned the victims’ world upside-down through a never-ending nightmare of menacing and criminal acts. The investigation led to felony convictions for seven individuals, all former eBay employees or contractors, and the ringleader was sentenced to 57 months in federal prison.”

“The company’s conduct in 2019 was wrong and reprehensible,” Jamie Iannone, eBay’s Chief Executive Officer, said in a statement. “From the moment eBay first learned of the 2019 events, eBay cooperated fully and extensively with law enforcement authorities. We continue to extend our deepest apologies to the Steiners for what they endured. Since these events occurred, new leaders have joined the company and eBay has strengthened its policies, procedures, controls and training. eBay remains committed to upholding high standards of conduct and ethics and to making things right with the Steiners.”

In a witness statement published on Thursday, the Steiners wrote about the crimes they endured, and the journey here. “In 2022, we were crushed when we learned the government had not interviewed the top executives at eBay as part of its criminal investigation,” it read, in part. “As victims of despicable crimes meant to destroy our lives and our livelihood, we felt it was vital to do everything in our power to make sure such a thing never happened to anyone else. eBay’s actions against us had a damaging and permanent impact on us — emotionally, psychologically, physically, reputationally, and financially — and we strongly pushed federal prosecutors for further indictments to deter corporate executives and board members from creating a culture where stalking and harassment is tolerated or encouraged.”

Baugh was sentenced to 57 months in prison on charges of stalking and witness tampering, among other offenses, in a plea deal in September 2022. Other former eBay employees received sentences of between 12 and 24 months in either prison or home confinement, and in some cases both. One of the employees, Brian Gilbert, is still awaiting sentencing.

eBay’s CEO at the time of the harassment, Devin Wenig, stepped down from his role in 2019. He was not criminally charged in connection to this case.

The Steiners have also filed a civil suit against eBay and the former employees, including Wenig, in federal court. A trial is scheduled for March 2025.

In 2019, Veronica Zea, an intelligence analyst contractor at the time of the incident, expressed remorse for her actions in a New York Times feature. “It’s easy to say, ‘Why didn’t I leave?’” she said. “But in the moment, I was terrified and stuck. I am so sorry. I regret playing even a small role here. If I could go back in time and prevent the Steiners from experiencing this in any way, I would do so in a heartbeat.” She was sentenced to a year of home confinement.