Fraudster skeptic Brian Dunning's shell game

It’s been known for quite some time that Brian Dunning is dirty. From 2006 to 2007, he and his brother set up their joint venture Kessler’s Flying Circus as part of the eBay affiliates program wherein you get commission from every sale if someone purchased something after clicking on a banner ad on your site. Two of Dunning’s other websites, and were configured to “stuff cookies” for eBay — that is, to create persistent cookies in your web browser such that if you visited one of those sites, the next time you visited eBay it would imagine that you’d clicked on one of those banner ads. Basically, by going to the site, without knowing it, you were treated as though you’d clicked on the Dunning brothers’ ad campaign even if you’d never even seen that ad. And the cookie would persist such that all your purchases looked as though they came from that ad campaign.

He’d figured out to do this by reverse-engineering Shawn Hogan’s tools — Shawn Hogan being the top-most eBay affiliate, who had himself defrauded eBay of $30+ million USD.

In 2008, eBay filed a lawsuit alleging that Dunning and Dunning had defrauded them of $5,300,000 USD. Though not as big a fraud as Hogan’s case, the Dunnings were the number two affiliate, and this was not chump change. eBay was definitely not getting the advertising bang for their buck. In 2010, a federal grand jury indicted him on five counts of wire fraud in violation of Title 18, United States Code, Section 1343. The FBI issued a press release in April 2013 showing that Brian Dunning had pled guilty. He faces 20 years jail time for his crimes.

Given that his general defense to the FBI was that eBay had been “stupid” in the way they set up the program, it’s fairly self-evident he was not repentant of his crimes and thought he could fight the suits in a sort of characteristically Libertarian “if you can do it, then it’s okay to do” defense. Now that he’s pled guilty, it’s fairly evident that he could not fight this case with that method of thinking.

Dunning’s legacy, his skeptical podcast Skeptoid, has long been known to be a cash cow as well — with its own advertisements, and a kitsch store with huge markups on t-shirts and mugs and the likes. However, now that Dunning has pled guilty and is awaiting sentencing, Skeptoid’s fate is in question.

In May of 2012, Dunning filed to convert the Skeptoid Media, Inc into a 501(c)3 non-profit charity, removing the ads from the podcast and site. This is mere months after he’d been forced to publicly admit that the lawsuits were ongoing.


This is a screenshot of the filing for non-profit status from the Department of Justice website.

It’s an easy leap to believe that this was done to protect it from fallout from his fraud; it’s an easier leap to believe that all he has to do to protect the money he stole is to donate it all to Skeptoid as soon as the non-profit status comes through. I am under the impression that Dunning is presently setting up a board for this non-profit entity prior to the status actually changing. I don’t think it’s possible, at this point, to consider the brand anything but spent and destroyed — any efforts made by any members of our community toward rehabilitating its image and disassociating Skeptoid the brand from Brian Dunning the imprisoned felon are, in my mind, wasted and themselves tainted efforts.

I’m certain that the FBI will not allow this shell game to happen, especially not with the scrutiny that’s levelled at Brian Dunning presently. But on the off chance that it does happen, that Skeptoid is allowed to use funds from the eBay fraud, and that it doesn’t die on the vine thanks to the ongoing support I see from numerous big-name skeptics in our community, at least it won’t have happened because everyone stayed silent.

I do not consent to the skeptical “brand”, insofar as there is one, being represented by malicious con-men and other ne’er-do-wells. The skeptical way of thinking is a toolset that supplements a person’s identity. Not every person’s identity toolset is complete — many people lack empathy or a strong moral compass, among other numerous lacks. The skeptical toolset has too long been associated with amoral Libertarian con-artists that comprise the big-name skeptics, like Dunning, and I’d very much like that to end now. We have enough of an image problem with so-called “honest liars”; no need to prop up dishonest con-artists as part of a package deal.

Speak up. Repudiate any efforts to resurrect the Skeptoid brand. Dissociate yourselves from it if you have ties. Dunning is an unrepentant con-man and none of us need to go down with his ship.

I say that as someone who got into movement skepticism with Skeptoid being the first podcast I ever listened to.

Fraudster skeptic Brian Dunning's shell game

69 thoughts on “Fraudster skeptic Brian Dunning's shell game

  1. 51

    […] Fraudster skeptic Brian Dunning’s shell game–”Dunning’s legacy, his skeptical podcast Skeptoid, has long been known to be a cash cow as well — with its own advertisements, and a kitsch store with huge markups on t-shirts and mugs and the likes. However, now that Dunning has pled guilty and is awaiting sentencing, Skeptoid’s fate is in question.” […]

  2. DJK

    Color me completely unconcerned about Brian’s actions in this matter. Firstly, as far as I can tell, he didn’t even truly commit a crime. SCOTUS ruled (Skilling v. United States) that, to trigger the wire fraud statute (18 USC 1343 and a definitional section 18 USC 1346), an act had to involve bribery, blackmail, or a kickback. That doesn’t seem to be the case here. So, why did he plead guilty to wire fraud? Well, most prosecutors submit to the “ham sandwich” theory of indictment – indict on as many counts as you can (even ones that are a huge stretch). When faced with multiple felony counts (no matter how absurd), most people will accept a plea bargain that drops all but a few just to avoid the possibility that they’ll be convicted by a jury (which consists of 12 people who know very little about the law and who are only on the jury because they weren’t clever enough to think of a way to avoid the duty). Even if the person believes themselves to be completely innocent, it’s often much smarter to plead guilty and receive a small penalty than to risk being put away for life. They might also decide to plead guilty just to end the case and be done with the expenditure of time, energy, and legal costs (substantial in federal court) that it entails. This may be Brian’s motivation, as this case seems to have already been in the federal court system for more than 5 years. We can’t know why Brian decided to plead guilty, but both of these options are strongly possible.

    Given that his actions don’t even seem to be a crime, where does that leave us? It’s a question of whether or not he broke his contract with eBay (a civil matter). I have no idea what the terms of his agreement with eBay were (and I’m certainly not going to read what is undoubtedly an extremely long document just to find out). Maybe the terms covered this type of activity, in which case Brian was in breach and definitely should lose a civil case. Maybe they didn’t. If that’s the case, I have very little sympathy for eBay. It is a general principle of contract law that a lack of a provision in a contract goes against the party which wrote the contract. That is, eBay had plenty of time (and legal resources) to draw up an airtight contract (which surely cuts in their favor on innumerable other matters). If they failed to cover this, that’s just too bad for them. Lack of foresight is a cost of doing business and I have very little sympathy for a company with enormous legal and technical resources that failed to foresee Brian’s scheme.

  3. DJK

    On another note, the post about Brian’s talk with an FBI Agent reminded me of something that ANY lawyer will tell ANY client, no matter the circumstances: NEVER TALK TO THE POLICE! It cannot help you! One exception may be if someone’s life in danger. Even then, there’s a non-zero chance that you or they will be harassed, abused, shot, etc.

    Before I get flamed for this, I’d recommend that everyone watch this very well-researched video (it might even help you at some point):

  4. DJK

    As a last comment, I will note that eBay’s top affiliate marketer, who also pled guilty to mail fraud for essentially the same scheme, ended up serving 5 months in a rather swanky federal prison, has a few years of probation, and paid a $25,000 fine. I’d imagine that Brian’s penalty will be similar to this.

  5. 56

    From this scumbag’s podcast episode on Internet paranoia:

    “If Bob buys something, CNN or some third party may be entitled to a sales commission for referring the business, which Amazon is happy to pay since they’re happy to have Bob’s business. Amazon may even see where Bob came from and offer him the special CNN discount. The referrer code is great for Amazon. At best it’s great for Bob, at worst it’s no skin off Bob’s nose. Referrer codes are also used for many other useful things on the web.”

    No skin off Bob’s nose? Don’t think for one second that this wasn’t an intentional planting of a seed.

    I really hope he goes to jail.

  6. 57

    DJK, why do you think that presenting a legalistic, technical defense of Dunning serves to refute Jason’s point about Dunning being morally and ethically unacceptable as a “role model” in the atheist/skeptical movement?

    “It’s not a crime, therefor it’s not unethical” is not a legitimate argument.

  7. 59

    If you’re not North American you don’t exist, I’m really sick of it, come up with something better, your religion sucks, your politics suck, your gross capitalism sucks, creatures other than you exist get used to it and try to understand , if you’re capable that is, of understanding other creatures who know nothing about your narcissistic supremacist world view. You’re really not a good example try harder!

  8. 60

    I just have to say this, geography has everything to do with it, you’re snowbound and africans are heat bound that’s just the way it is, sinister people know how to exploit this, get a grip get a life! We all in it together.

  9. 61

    One thing people are missing here is that Dunning didn’t just still the money off eBay – in many cases he stole it off other affiliates who would have been credited for the sale if Dunning’s cookie stuffer overwrote theirs with his.

    As someone who makes money online and has more than once been damaged by fraudsters like this, you can count me as unsympathetic. Sentencing is today but I expect he’ll probably get off fairly lightly.

  10. 63

    I’m sure that you virgin-pure commentors have never so much as rolled through a stop sign, looked with appreciation on the works of Picasso or Degas, or enjoyed T. S. Eliot’s poetry, but let me remind you of one very important reality in life: it’s possible for bad people to do good things.

    If you’re going to claim to be a skeptic and a rational thinker, you don’t throw out years of Skeptoid episodes without some serious consideration of their individual objective value. Consideration which you apparently can’t fathom because you’re in such an emotionally-charged lather. Calm down, smooth your feathers, and use your critical thinking skills.

  11. 64

    @Dan Pratt: I’ve certainly never rolled through a stop sign and had five million dollars of other people’s money fall into my trunk as a result.

    Yes, it’s possible for bad people to do good things. I think you’ll find that most of us recognize that the world is more complicated than “bad people” and “good people.” I also suspect that you haven’t actually read the post here or the comments, or you’d find that it’s not people in “an emotionally charged lather,” but people speculating on whether or not Skeptoid’s new non-profit status would be used to further Dunning’s fraud.

    You might also have noticed that the post is five months old.

    We are quite capable of considering Skeptoid’s episodes individually. Individually, they are short, sometimes interesting bits about skeptical topics, with varying degrees of quality with regard to research, and varying degrees of obvious bias. For the last several years, most of them end with a plea for donations that, in hindsight, are gross.

    But as to Dunning himself, and any project to which he’s tied, the question of credibility is a reasonable and important one. Committing fraud has shot Dunning’s credibility and led anything he does to be tainted with questions of honesty and impropriety, as surely as it has for Kevin Trudeau.

  12. 67

    The hyperskepticism. Good gravy, it’s unbearable.

    “Well just because he lied and stole in the past doesn’t mean he’ll do so in the future!”

    No shit. And no doubt the same people lecturing the sensible people for putting a proven thief, fraudster, and liar on their “Do not trust” list would be the same ones chastising us years later if we were defrauded, because we should have known that there are frauds out there, and the world is a Big Mean Place, and why can’t we stop whining like little babies who Can’t Handle the Real World?

    Honestly, the worth of the entire skeptical movement has been called into doubt in my mind precisely because of the emergence of this hyperskepticism, the abuse of skeptical tools to avoid the truth by demanding a far higher standard of evidence than is warranted for the situation.

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