A federal lawsuit was filed against Craigslist today. Cooks County (Illinois) Sheriff Tom Dart is claiming that the hugely popular online classifieds site promotes and facilitates prostitution on a massive scale.

He is looking to get the site to eliminate it’s “erotic services” section, claiming that the sections ads are blatant solicitations for prostitution.

“Missing children, runaways, abused women and women trafficked in from foreign countries are routinely forced to have sex with strangers because they’re being pimped on Craigslist,” Dart said.”

The San Francisco based company did not return e-mail and telephone messages seeking comment.

The company allows users to post classified ad’s and generally does not check erotic postings or remove them until somebody complains. Federal law offers grant immunity to service providers for the content that is posted by users, as long as the company responds to specific complaints.

The lawsuit in U.S. District Court in Chicago follows repeated requests for Craigslist to shut down their “Erotic Services” section.

The “Erotic Services” section of Craigslist has made nationwide news resulting from numerous prostitution arrests in the past few months.

“Federal prosecutors charged a New York man in November with being a violent pimp who forced young girls and women into prostitution, alleging he advertised the services of women between the ages of 15 and 20. And in January, two Wisconsin women were charged with misdemeanor prostitution after allegedly offering sex for money in Craigslist ads.”

Jim Buckmaster, Craigslist’s CEO, said at the time that the agreement would allow legitimate escort services to continue advertising, while discouraging illegal activity by requiring anyone posting “erotic services” ads to provide a working phone number and pay a fee with a valid credit card.

Craigslist also agreed to provide that information to law enforcement if subpoenaed.

To view the original article, click here.

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A few weeks ago, I posted a piece regarding a great job listing my sister encountered. With the desire to step out of the busy business world where she has always worked, she figured a tutoring position is just what she needed. However, unfortunately, things went astray and when my sister received a big check in the mail before she even began her “position,” we began to wonder what exactly was going on. Please see Craigslist: A Scam or Not a Scam? That is the Question for full details on this story.

Shortly after the check was deposited, my sister began receiving emails from her new “boss” asking her to…well, I’ll let you see it for yourselves. Here’s the original email pasted below: 

Immediately, my sister stopped all communication with the con man who is STILL emailing (and may be dangerous), asking for the money. The moral of this story is if something seems too good to be true, it is! Hopefully, next time this guy finds another trustworthy “victim” on Craigslist, they will have stumbled across this article and will not fall for such a crazy scam.

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Craigslist.com is used worldwide and is becoming everyone’s number one source in finding employment, a place to live, and even love of various sorts. Giving traditional jobsites like Monster.com, Rental sites and even Match.com a run for their money, sometimes with the good comes the bad, or at least, the shady. While Craigslist is completely free for visitors to explore hundreds upon hundreds of listings, the popular site doesn’t do the greatest job at preventing not-so-legitimate people from posting ads.

For example, I recently received a call from my sister who was ecstatic over a job offer she got from a man who claims to be overseas. She told me that he emailed saying he liked her resume (she’s an MBA who wants to step away from the daily grind and work freelance), and would like to offer her a too good to be true sounding, HIGH-paying position, tutoring his son in English. ENGLISH!!

Sidenote: Any of you who are math-savvy and business oriented know that grammar isn’t necessarily your strong point. There are always exceptions but…you know what I mean.

Now, the only details my sister could gather from this man’s poorly written emails was that his son was coming with a nanny to Florida (where she lives) to begin his tutoring sessions in September. However, before then, he informed my sister that he would be sending an advanced “cheque” for her future services.

Giving a CHECK to a complete stranger?

I smell a scam. After my sister forwarded me their back-and-forth emails, I noticed she asked specific questions in which he answered vaguely. What school will your son attend? No answer. Where is he going to live? “Cheque man” replies, “Where do YOU live?”

After she answered, he wrote, “My son will live close to you for tutoring purposes.”

Uh, OK.

Being the trusting person that she is, my sister sent him her address for the “cheque” and he replied that although he was having trouble sending it, she’d get it shortly. Sure! I informed my sweet, naïve sister (who would kill me if she knew I just called her that, by the way) that this was probably a new and improved scam after those lengthy b.s. emails promising a better-than-ever job position, which entailed assisting in the transfer of millions and keeping 80% failed miserably. You know the ones…we get a large cut after coughing up a few minor details such as our account number, social security number, and mother’s maiden name.

Down and out over the fact that this fantastic “tutoring position” may be a fraud, when he finally emailed saying the cheque was in the mail, my sister ignored it. Yeah, his cheque’s in the mail just like my tax refund check is in the mail. Please.

Well, guess what?

Today, in the mail, she received his cheque for 3,500.00. It CAME, which is why I’m writing this post. Without any type of employment agreement, this man paid my sister in advance for her tutoring skills without ever having met her.

What’s going on here?

My sister deposited the check into her account today. And that’s all I know so far. Stay tuned for an ongoing report on this story and lawyers, please, keep reading. I may need you down the road.

Could it be that some completely unbelievable fairy-tales DO come true? Or, is my sister in some kind of danger?

Any comments are much appreciated.

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A while back I wrote about a lawsuit, possibly with unethical motives, that was filed by Ebay against Craigslist. In the suit, Ebay claims that the people in charge of Craigslist, a popular internet classifieds site, have actively tried to reduce Ebay’s influence as a minority shareholder in the company.

WSJ’s Marketwatch had this to say about the suit:
The countersuit escalates an ongoing struggle between one of Silicon Valley’s biggest Internet players and a smaller, but strategically important partner that’s been reluctant to both embrace eBay and cash in on its own popularity.

Craigslist is one of the most popular websites in the united states, mainly due to it’s ease of use, and the fact that most of it’s features are free to use except for a minimal charge for real-estate and job postings. The company still manages to profit in the several hundred million dollar range, without the large fees and massive overhead of some of the larger job listing websites.

WSJ:
In its own suit, Craigslist counters that eBay has “engaged in conduct designed to harm Craigslist, its users, and consumers.” That conduct includes “unfair competition” and attempts to “treat Craigslist as if it were one of eBay’s subsidiaries,” according to the suit.

This is a very revealing look into the corporate culture of Ebay, and Cragislist. It appears Craigslist feels threatened by Ebay, and is growing tired of their attempts to strong-arm them out of the market for online classifieds.

Personally I think that Ebay should just let craigslist go. As a Google exec said recently, (paraphrased) “we do well when the internet is healthy.” Ebay has nothing to gain by squashing Craigslist.

When I’m trying to sell something on the internet, I’ll usually try craigslist since it’s easy and free but doesn’t have any mechanism for bidding so I’ll usually have to high-ball the price and then negotiate, and even then it’s sometimes difficult to sell things because people have no obligation to complete the transaction and will often flake out.

So basically this results in a situation where I will use Craigslist to sell inexpensive things, or things in high demand, and Ebay for things I want a good price on that are likely to get bidded up and might be difficult to find a serious buyer for.

WSJ:
The company alleges that after eBay bought a Dutch classified listings site in 2005, eBay executive Garrett Price said, “We just purchased the largest classifieds site in the Netherlands for $290 million, what do you think we would pay for the largest classifieds site in the United States?”

But then I guess ebay sees things differently, since they have huge bank accounts ready to drop the hammer on companies which they think can benefit their brand.

The one problem here though, is that if one day I logged onto Craigslist and it had a huge Ebay logo at the top and had all of the bulky features of Ebay I’d probably delete the bookmark and never go back there again as would many of the people like me who use it solely for it’s simplicity and ease of use.

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This is sort of unexpected… It looks like Ebay is trying to sue Craigslist over some kind of dilution of share value. Ebay is a minority shareholder in Craigslist (not that minority though, owning 28%).

I’m sure the execs at Ebay have been fairly jealous of Craigslist, in that they have an equal market share in the selling of aftermarket goods online with almost none of the overhead that Ebay has, while still managing to make a respectable profit with hardly any cost to the users.

Ebay tried to copy Craigslist a while back by creating a similar site called kijiji.com, besides being nearly impossible to remember, has failed almost entirely. I think they fail to realize the reason why Craigslist is so popular, being that it is part of west coast culture and has been for many years. Posting classified adds online isn’t a revolutionary concept, and there really isn’t much need for anything more complicated than Craigslist for most things.

Some people on Slashdot had some insightful comments on this.

Luyseyal wrote:
Hostile takeover. Ebay files the lawsuit to devalue the shares. Then, Ebay buys up more and more shares to have greater control over an eventual vote. Ebay tenders an offer for Craigslist. Since it owns more, it can influence the shareholder vote more significantly. Ebay wins the auction (ha) and cancels the lawsuit.

This is an interesting strategy… but kind of unethical though don’t you think?

Drhamad wrote:

1) Craigslist is a closely held company not traded on the open market
2) This is a dilution suit. This means that basically, in a closely held company, it’s easy for a majority shareholder to screw a minority shareholder, since the minority shareholder can’t outvote them and can’t get other shareholders to support it. Therefore, we have a lot of laws protecting minority shareholders. In this case, it seems that eBay has issued extra stock, which means that eBay no longer really has 28%, but rather less, effectively. This CAN be legal, but there has to be a solid, nonpredatory reason for it.
3) eBay managed to get its share because craigslist had issued some shares to close employees, on the assumption that it didn’t matter and was just to feel nice. One of those employees decided to sell his stake publicly, and eBay bought it. Normally, no one would have been able to get access to Craigslist stock.

Looks like trouble in paradise.

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