Secondary ticketing company StubHub has been very keen to stress this week that it identified and reported fraudulent activity undertaken by employees at one of its suppliers following the news that New York prosecutors have arrested and charged two people in relation to a ticketing scam.
Given StubHub is reportedly planning an IPO once again, it’s understandable that it wants its role in stopping the fraud to be fully understood.
Queens District Attorney Melinda Katz announced the arrests earlier this week, revealing that the accused made more than $600,000 by fraudulently taking and reselling tickets from StubHub’s systems, predominantly for Taylor Swift’s ‘The Eras Tour’.
Defendants Tyrone Rose and Shamara P Simmons, said Katz, “tried to use the popularity of Taylor Swift’s concert tour and other high-profile events to profit at the expense of others”.
They exploited a loophole on StubHub’s systems - accessible to Rose as an employee at the Jamaican offices of StubHub supplier Sutherland Global Services - in order to “steal tickets to the biggest concert tour of the last decade” and then resell “those seats for an extraordinary profit of more than $600,000”. Rose and Simmons have now been charged with computer tampering, conspiracy and grand larceny.
Mark Streams, Chief Legal Officer at StubHub - which operates StubHub in North America and Viagogo across the world - said in a statement, “upon discovering this criminal scheme, we immediately reported it to the third-party customer service vendor, Sutherland Global Services, as well as to the Queens District Attorney’s Office and Jamaican law enforcement”.
“The individuals involved, employees of SGS, exploited a system vulnerability to fraudulently resell tickets”, he added. “They were swiftly identified and terminated. We appreciate the efforts of District Attorney Melinda Katz and law enforcement in bringing these individuals to justice”.
Ticket resale - or ticket touting or ticket scalping if you prefer - remains controversial within the music community, of course, and the resale platforms like StubHub and Viagogo are regularly criticised by artists, promoters and consumer rights groups.
One key line of defence used by StubHub and Viagogo is that they safeguard against ticket fraud, the argument being that they will refund any purchase where the buyer doesn’t get access to a show, whereas any tickets resold via social media and online forums don’t come with that guarantee.
Ticket scams being conducted by people connected to StubHub - albeit as employees of a supplier - are therefore somewhat embarrassing. Especially as the secondary ticketing company is currently considering an initial public offering once again - according to a report in the New York Times - having abandoned previous IPO plans last year.
Hence why Streams is so keen to stress that it was StubHub itself that shut down the fraud, something Katz acknowledged in her statement. Streams added “at StubHub, ensuring a safe and secure platform for our fans is our highest priority”, and that “StubHub has since replaced or refunded all identified orders impacted and strengthened security measures to further protect our fans and sellers”.
Katz’s office provided some more information about how the scam allegedly instigated by Rose and Simmons worked.
Rose and an “unapprehended accomplice”, as employees at Sutherland in Jamaica, “allegedly used their access to StubHub’s computer system to find a backdoor into a secure area of the network where already sold tickets were given a URL and queued to be emailed to the purchaser to download”.
Rose and his co-conspirator then “re-directed the URLs to the emails of co-conspirators Shamara Simmons in Queens and a now deceased accomplice who lived in Queens”. The New York-based duo then “downloaded the tickets from the re-routed URL” and “posted the tickets to StubHub and resold them for profit. The overall illicit proceeds from this scheme are valued at $635,000”.
Although many of the tickets stolen and resold were for Swift’s shows, the scam also impacted on Adele and Ed Sheeran concerts as well as NBA games and the US Open Tennis Championships.