Catch Me If You Can

Higgins was overjoyed to hear from Fettig that Nelson was a regular visitor to her shop. He started putting together a plan for Nelson's arrest. And immediately found out that his managers wouldn't let him go to Orlando to do it himself.

"We were at the end of our fiscal year and under a budget directive. I was obviously a little disappointed," he says, with typical understatement. Higgins had to contact the postal inspectors in Florida and ask them to handle the arrest. He filled out the requisite paperwork, and the Orlando office put two inspectors on the case. The U.S. Marshals arranged to post an agent inside Fettig's shop to wait for Nelson to appear.

Nelson had last been to the shop on June 29. Fettig took a vacation in early July, and when she reopened the shop on July 10, deputy marshal Sam Maddox kept her company. Nelson showed up the next morning, before the shop was open, and waited outside. Fettig and Maddox were already inside, and Fettig was worried that Nelson had seen Maddox and been scared off, since she always ran the shop alone.

"Something didn't feel right," Nelson says. "I didn't go in. I lit a cigarette and walked away from the shop." Maddox came flying toward Nelson with his gun drawn. A second later, Nelson was spread-eagled on the sidewalk. Maddox put plastic handcuffs on him. Nelson wasn't armed. "He just had the coin he was trying to sell me," Fettig says.

"I was glad to be done with it," Nelson says. "I was tired of running." But he was surprised. "I knew I wasn't big enough to be on America's Most Wanted. But I never thought I'd be on the radio in Orlando." Nelson asked to be taken directly to jail; he didn't want to face his girlfriend back at the motel.

Gunnison and Higgins spent the next few months assembling the case against Nelson. (They investigated Krista as well, but ultimately decided not to file charges.) Last summer, Nelson pled guilty to mail fraud, wire fraud, identity fraud, and money laundering. It was one of the first times that PayPal transactions had been defined as money laundering, Gunnison says, although that definition wasn't tested in a trial.

Nelson told the judge at the U.S. district court in Concord that he was very sorry. "We said that his comments needed to be taken with a cargo container full of salt," Gunnison says. The judge brushed off Nelson's pleas for leniency and handed down the maximum term. This past March, Nelson was sentenced to spend six and a half years in federal prison.

Higgins was pleased to hear that Nelson would serve serious time, given that Nelson was a white-collar criminal. "This was someone who was ingenious at devising new ways to beat the system," he says. "He did it for a living."

Doing serious time in jail

Today, Higgins still works as a postal inspector in the Boston office, and Gunnison has been promoted to chief of the criminal division at the U.S. Attorney's office in Concord. Nelson earns 17 cents an hour working on construction projects inside the medium-security federal prison at Otisville, New York. His face looks more worn than in his mug shot. He has lost most of his hair and buzzed the rest down. He is separated from Krista, who gave birth to their son while he was in Florida. She has filed divorce proceedings. He is pursuing a degree in business administration by taking courses offered at the prison.

"Until the day I got caught, I thought that no one had lost money," Nelson insists, explaining that he had thought that his buyers would be able to get their money back from PayPal or their credit-card companies. But he also says, in a prison interview, "I could've taken 20 times more than I did. I could go and create a fake identity on eBay the day I get out." A moment later, he says that of course he would not do that.

Nelson, now 35, will be at Otisville until 2007 -- although it's possible that he could earn an early release. While there, he's not allowed to use the computers.

Don't miss this article's sidebar: How eBay Fights Fraud

Contributing editor Scott Kirsner (skirsner@fastcompany.com) writes from Boston's North End.