Connect with Fast Company

Jay Nelson parked his wife's white Jeep Cherokee in a garage near Hartford's Bradley International Airport and dashed toward the terminal. It was Valentine's Day 2001, and he was worried he'd miss his flight.

This was Nelson's first day as a fugitive.

The following day, Nelson was expected to appear in federal court in Concord, New Hampshire to face arraignment for fraud related to his ingenious home-based business: running auctions for computer equipment on Yahoo and eBay and rarely delivering the merchandise. It was a business, Nelson now says, built on a "100% profit margin."

Before leaving home early that morning, Nelson had written a note to his wife, Krista, who was pregnant with their first child. In the note, he explained that he was leaving because he didn't want to cause problems for the family.

When Nelson stopped to check his luggage with a redcap outside the terminal, the redcap told Nelson that he'd have to go inside -- his name had been flagged because he'd bought his ticket the day before. "I was worried that they would catch me before I got onto the plane," Nelson says. He was traveling with $10,000 in cash and about $4,000 in gold and platinum coins.

But if he was on any computerized watch lists, the agent at the US Airways counter didn't notice. Nor did the agent balk when Nelson handed over his New Hampshire driver's license, even though it didn't match the name he had used to buy the ticket on the Web, Jay Elson. Nelson boarded the plane just before the cabin door closed, and a few minutes later, he watched with relief as the airport began blurring past the window.

Eventually, however, Nelson's real name would feature prominently on another list: the most-wanted roster of the U.S. Postal Inspection Service, which is responsible for investigating most online-auction scams. He'd be charged with conducting more than $200,000 in illicit auctions, using 15 different screen names and ripping off 1,700 victims. "He found a method that worked," says Tom Higgins, the postal inspector who was the sole investigator who built the case against Nelson -- and who tracked him down after he fled. Nelson could produce new online identities almost at will, and "he could commit Internet fraud faster than we could investigate," Higgins says.

Though Nelson never wielded a gun, Higgins started thinking of him as the John Dillinger of the Web -- someone who excelled at a particular kind of crime and was brilliant when it came to eluding capture. In contemporary terms, Nelson's case was the Internet version of Catch Me If You Can.

Nelson is just one of the individuals who have decided to make a living by swindling bidders on eBay and Yahoo -- albeit one of the most successful. Auction fraud has been the biggest source of consumer complaint to the Internet Fraud Complaint Center, run by the FBI and the National White Collar Crime Center, every year since the center was created in 2000. Fraud is also a sticky problem for eBay, the Web's biggest auction site. (Although Nelson operated on both Yahoo and eBay, eBay's business is far more dependent on auctions than Yahoo's is.) EBay's virtual auction house hosted nearly $15 billion in sales of merchandise last year, generating $1.2 billion in revenue for the company. EBay says that only an infinitesimal fraction of its auctions are fraudulent, but ensuring that its marketplace is a safe arena for buying and selling merchandise is crucial to the company's continued growth. And catching serial scammers like Nelson is a good place to start.