I feel like I am writing the forward to a novel…

Shawn Hogan is a friend of mine and I have known him for over 10 years. Shawn is a very humble guy who does not like the spot light at all. If Shawn’s name rings a bell its because you probably saw his huge layout in Wired magazine a few years ago where they declared him a “Hero” for fighting and winning against the RIAA.

Now, 2 years later, Shawn finds himself in another huge legal fight. This time though a lot more is on the line.

Last week he was Indicted by the FBI on 15 counts of wire fraud and criminal forfeiture. This is all coming from how he made money with the eBay affiliate program. Shawn was eBays top affiliate for many years. Shawn is facing up to 20 years in prison and and $250,000 fine per count if convicted.

What you are about to read was posted by Shawn Hogan yesterday at noon on his blog. Its the first time he has ever publicly addressed the investigation and its an amazing read.

Taken from Shawn’s blog:

I haven’t said much about it to date about the dealings between myself and eBay, because well… I didn’t see a point. But now with people’s imaginations running wild about what did (and didn’t) happen, I suppose I’ll talk about it. The story itself is far more interesting than you would think possible within an affiliate program.

The Beginning

I started doing things with the eBay affiliate program in the fall of 2004. On October 20, 2004, I decided I would see if I could rank well for one of the “holy grail” SEO keywords… “eBay”. On November 9, 2004, I was in the top 10 in Google for “ebay”… specifically I was #9 (at the time, the top 50 results were just the various official eBay sites for various countries). On December 10, 2004, I held the #4 *and* #5 position in Google for the keyword “eBay” and this was a position I held in Google until April, 2006 (when Google updated their algorithm, and I no longer cared about the ranking). I also held the #1 spot for other things like, “eBay Registration” (even higher than ebay.com’s registration page). The rankings were partially done with the Co-op Ad Network. People saw me outranking eBay’s own domain for the keyword “eBay” and in December of 2004 the Ad Network exploded in popularity. All of a sudden we had hundreds of millions of pages on the Internet serving billions of Ad Network ads every day.

I got the attention of eBay because my affiliate income was going crazy and they assigned someone to be my “go to” person for anything I needed within the eBay program. This person was assigned to me in early 2005.

Personally I was more than happy with the income I was getting as an eBay affiliate, but eBay was not and helped me come up with new/innovative ideas for driving more traffic to eBay.

Spring 2005
Due to the overwhelming popularity and reach of the Ad Network, eBay came up with the idea in the spring of 2005 that we should use our ad network for more than just helping people rank well in search engines. The logic was that were serving billions of ads every day, so why not use it as a traditional advertising delivery system? It made sense, so we tried it out by using a small percentage of the Ad Network ad space to serve up tens of millions of eBay ads every day that ultimately were affiliate links. Affiliate income jumped another 300% around that time (as expected).

The Promise Made

At this time, the eBay contact that was assigned to me was constantly complaining about how they need to get a new car because their car was crappy. I finally got tired of continuously hearing about their crappy car and promised that I would buy them a new car if I ever made over $1M/month, but they could never talk about their car again starting now. I honestly never thought I would make anywhere remotely close to $1M/month at this point, so it was an easy way just to get them to shut up about their car.

Summer 2005
eBay was pleased… they were getting massive amounts of traffic and it sure made their affiliate program look good. In the summer of 2005, eBay decided it needed more traffic from me. I told eBay I couldn’t drive any more traffic. They responded that I should “experiment” with what they deemed “grey area” things (this is what eBay called anything that violated their terms of service).

At this point, things started to seem strange to me. eBay was paying affiliates millions per month, when they had no competition… for the most part it was traffic they would receive anyway. And why was eBay *happy* (and they were) that I was outranking them for their own company name and paying me for it? Someone searched Google for “eBay”, came to my site and I would send them to ebay.com to get affiliate revenue. Finally I confronted eBay about it all. I told them numerous times that I didn’t understand even why they HAD an affiliate program, and that I would gladly do what I do for them for 1% of what they were paying me. The response I was met with with ultimately was (and I quote), “Well don’t tell anyone that. Why do you not like ‘Free money’?”

When I asked them why they would knowingly allow affiliates to violate their terms of service, they were very good at avoiding answering my actual question. Finally after pestering them with the same question for weeks, they broke down and informed me that their terms of service (and even the entire affiliate program to some degree) was a bit of a facade. It allowed eBay to do things they wanted to do (like spam search engines, deploy in countries where they had no actual presence, etc.), while also giving them a way to wash their hands of any wrong-doing when any of their large partners (like Google) would question them about it (like why there are so many spam sites directing people to eBay). They could simply say, “It’s our affiliates, and they are violating the terms of service we set forth.” To me, I suppose it sort of made sense and I stopped questioning them about it. BTW, one of the times this was explained to me was at PubCon in Las Vegas, *while* an eBay employee was going around to each public access computer with a USB dongle he developed that would automatically install something that would redirect any user to eBay when they tried to access Yahoo Auctions.

I was informed by eBay that they understood that in order to keep the interest of their large affiliates and keep them creative/innovative they allowed them to experiment with doing pretty much anything as long as the affiliate let them know if they put something into large-scale deployment and it violated their terms of service. So in the summer of 2005 I played around with all sorts of things (most things did not violate their terms of service, and most things were ultimately bad ideas for driving a decent amount of traffic). One of the things that was toyed with was a mechanism to force the end user to click through to a site that they didn’t actually click on.

I first heard the name Ben Edelman towards the end of the summer. Apparently eBay contracts with Ben to do random compliance checking on their affiliates and issues a monthly compliance report to them. I showed up on his compliance report because this was the time they gave me the go ahead to play with non-compliant things. eBay then proceeded to amend what they told me prior. I was free to do experiment with whatever I wanted, as long as I didn’t show up on any outside compliance reports. They said outside compliance was something they had to do as a publicly traded company, but wasn’t something they paid much attention to internally. When I first showed up on Ben’s compliance report eBay told me it would be best if I just blanket filter (via geo-targeting) the area were Ben worked as well as locations Ben Edelman might be. This included the bay area, Santa Barbara (CJ was located there), Boston, Washington DC as well as an area in upstate New York. eBay even sent me a copy of the “secret monthly compliance report that no one was supposed to know about”. The fact that I showed up on his compliance report was a bit irrelevant anyway since I wasn’t experimenting with any grey area stuff any longer by the time the report was given so in the end there wasn’t anything I needed to change.

Geo Visitors
eBay knew how widely used our Geo Visitors tool was (installed on millions of web pages, MySpace profiles, etc.). So they asked me to direct traffic to eBay when someone clicked on the Geo Visitors button that was widely installed, which looked like this:

hogan geovisitors

Instead of sending the user to the map they were expecting, they would end up on eBay (this was done sometimes, not all the time). I actually brought up the point to eBay that this violates their own terms of service… specifically the part of their terms of service that state you can’t mislead the end user or trick them into clicking something. After further discussion my eBay rep came back, saying they talked to their legal department and I was in fact correct. Their solution wasn’t to stop the traffic though, but instead make the Geo Visitors button display as a small eBay ad instead. Specifically, the Geo Visitors button would sometimes show as:

hogan eBay

Personally, I was not okay with this, as it really seemed like a bait and switch… The whole reason I brought up the original implementation as a violation of their terms of service was because I didn’t want to do it anymore and was hoping they would stop applying pressure for me to do it. In the end, the pressure eBay put to leave it as a “sometimes” eBay ad won out. And affiliate revenue again nearly doubled.

The Promise Kept

This was also the time that my affiliate revenue from eBay broke over $1M in a single month, which is significant because now I had to make good on the “promise” that I never thought I would have to follow through on. My eBay contact called me immediately after I broke $1M in a month and said, “Okay, you broke $1M… buy me a car.” Sadly, I’m a man of my word and I did try to buy them a car… unfortunately the car they wanted was backordered everywhere, so instead of buying them an actual car I told them I would give them the money needed for the car and they could go find one themselves. It wasn’t extortion or anything since I was the one that offered, but it sure felt like it to me in the end. That was a promise I made that ultimately cost me $50,000.

On top of that, I was coerced into buying my eBay contact a plasma TV, a really nice laptop (while I had a crappy TV and crappy laptop of my own… hah), etc. I kept asking if this was “normal”, and was only told, “Yes, all the affiliates buy their contacts stuff like this.”

Spring 2006
My life started to get very strange. People were finding out how much money I was making by being an eBay affiliate, which made people go a little crazy I think. My servers were getting around 100,000 hack attempts per day, people were showing up on my doorstep from Europe (literally) threatening me with crap if I didn’t tell them what I was doing for eBay. My car got stolen from a “secure” parking structure. More than one person found where I was building a house, broke into the development to take pictures and post on their blog, etc.

I didn’t like the attention and this was not the life I wanted.

I proceeded to inform eBay that I no longer wanted to participate in the eBay affiliate program… but every time I brought this up with them (which was every time I talked to them at this point), I was guilted into staying, with them asking me to stay “one more month” or “can you just wait until the end of the quarter so it doesn’t wreck our numbers?”. Finally I REALLY wanted to be done and not strung along anymore and again was guilted into staying with them telling me how many hours they spent getting me a “special rate”, etc, etc. and now it would all be for nothing if I was going to quit.

eBay Live! – June 2006

The top affiliates get invited to an eBay affiliate conference that takes place during eBay Live! each year. The conference was in Las Vegas this year and eBay affiliate program managers (along with some other eBay executives) invited me to a “secret meeting/dinner” where I was the only non-eBay employee invited. We had dinner at Mix, a swanky restaurant at THE Hotel.

Who cares, about a private dinner, right? Normally yes, until you get into what the topic of discussion at this dinner was. This dinner meeting had two main topics… 1. How can I drive more traffic to eBay (always the topic with eBay) as well as something far more interesting.

The Black Budget

One topic thing that was discussed was eBay secret “black budget”. This was described as a large allotment of money that eBay was free to do what they wanted with, without it being reported on accounting sheets (and in turn shareholders). eBay wanted me to REALLY ramp up spamming the web with eBay ads. I told them I wasn’t interested at ALL and in fact still wanted to quit the program completely, not “ramp it up”. I explained to them that Google was pretty good to me as far as sending me traffic and that I had no interest in spamming Google search results. Then they offered to buy any hardware I wanted with their black budget and get it co-located offshore if I wanted so that no one could trace the spamming back to me or digitalpoint.com. I still told them I wasn’t interested.

Then they made it very clear that they have no love for Google at all and would actually pay me whatever I wanted from their black budget to “hurt Google in any way I can”. I didn’t really understood what they were asking or even why they would want to “hurt Google”. I pointed out that Google is not their competitor and hurting Google ultimately would only hurt them in the end since they get traffic FROM Google. Finally they came out and said they were angry at Google because eBay was one of the largest AdWords advertisers and Google recently changed their AdWords pricing to take into account “ad quality” (more on that here) and it was costing eBay exponentially more in advertising dollars. I still wasn’t clear exactly what they meant by “hurt Google”, and pressed them to be a little more specific. Their answer was, “You are creative… think of anything you can think of and just name your price. Maybe you could figure out a way to take down Google datacenters somehow?” eBay even flew down an executive from their pay per click advertising division to talk about this.

Yeah, no. eBay asking me to engage in cyber-terrorism against Google… thanks, but no thanks. I’m not going down that road.

After I made it blatantly clear that I was not interested in “hurting Google” for any price the topic turned back to how I could drive more traffic to the affiliate program. I told them that I really didn’t think there was a way I could drive more traffic. They questioned me about any of the “grey area” stuff I experimented with in the previous summer and if there anything in there that could drive traffic. I told them that it was *possible* to add additional traffic, but the only traffic they could get from that would be non-compliant. Their response was, “As long as you don’t show up on compliance reports, it’s compliant as far as we are concerned.”

Carmen Electra & The Super Bowl

In 2006, I had a new idea for driving traffic to the eBay affiliate program that started as a joke. I had the idea to “Win A Date With Carmen Electra” (or some other person along those lines that would agree to it). The idea entailed running a Super Bowl ad that directed you to a site that passed traffic through to eBay via an affiliate link. My joke became serious when eBay actually wanted me to run the Super Bowl ad. They even went so far as to get special approval from their legal department after I expressed my concern about spending the money to run the ad when they could decide they didn’t want to do it (or pay the commissions on it) after I already foot the bill. There wasn’t enough time to get it ready for the Super Bowl that winter (and eBay was rather annoyed I couldn’t do it that year).

Fall 2006

I don’t recall the exact time, but I believe it was in the fall of 2006. I showed up on Ben Edelman’s monthly compliance report again, and this time he was absolutely furious with eBay employees about it. What *I* heard is that during the conference call with the eBay affiliate managers, he did a lot of yelling and screaming about why I was still participating in the eBay affiliate program when I should have been terminated last time I showed up on his report.

eBay’s response to him? “We’ll take care of it.”

eBay’s response to me? “Ben can only cross reference affiliates by PID. Please change your PID in case you show up on Ben’s report in the future.” Yep, that’s right… eBay only wanted me to change my tracking ID so Ben Edelman couldn’t see it was an affiliate that was on his report in the past.

Private Jets

eBay knew I was not driven by the money (clearly since I told them constantly I didn’t want to participate in the program any longer and that I would do what I did for eBay for 1% of what they were paying). They ended up getting creative to keep me interested in the program for the last year. Going so far as to trying to get clearance so I earned hours on Jettly, a private jet instead of commissions (even if those commissions were worth more, it was more interesting to me).


In the fall of 2006 eBay was switching over to their in-house rover links and I was very slow to switch my links to rover. I didn’t see a point in it really… the old links were working just fine. They were oddly insistant that I move my links to rover, but would never actually tell me why. Their refusal to tell me why made me not want to do it, so we went around and around for months with this. I told them I would switch my links to rover as soon as they told me why it’s so important. Finally they said it was important to them because traffic going through rover links had no compliance checking.

The End

In June of 2007, my affiliation with eBay ended. And truthfully, I was very happy about it (in the previous year, nearly every communication I had with eBay, I would bring up the fact I didn’t want to participate in the eBay affiliate program any longer), so it was an easy way out without them begging/pleading that I stay in the program “just a little longer”.

eBay’s Numbers

eBay was clearly driven somehow by the overall commissions paid out to affiliates. There were months where their numbers would be “low”, so they would give retroactive bonuses out to all (or at least the top) affiliates for the previous month, and were constantly upping the payout rate to affiliates (which is odd only because they had no real competition).

I suspect eBay’s management staff within the affiliate program were probably getting quarterly bonuses based on how much commissions were paid out to affiliates.

Non-Compliant Traffic

eBay’s “favorite” traffic source back then was also technically violating their own terms of service. Cloaking search engines via server-side redirects was the thing they loved the most. But again… they stated their terms of service acted more like a scapegoat they could point to when their partners (notably Google) would question them about it.

So What Happened?

This part is purely speculation, but the feeling I get is that someone higher up in eBay got wind of what their affiliate program managers were doing and encouraging affiliates to do and “cleaned house”. I heard a rumor that the majority of the top 100 eBay affiliates were axed at the same time I was. I also heard a rumor that the eBay affiliate program managers inside the company were also “let go” (or at the very least relocated to different departments) at the same time. Did it have something to do with Meg Whitman’s (eBay’s CEO at the time) departure from eBay? Who knows, but I can only assume eBay knew of Meg Whitman’s departure at least a few months before it was official and started to bring in the new management team. It would all coincide with a timeline of someone from the new management team looking deep into how things were run.

So if someone higher up wanted to “clean up the department”, what do you do after you get rid of most of your top affiliates and replace the internal employees running the department? You take your previous top affiliate (me) and attempt to make an example out of them. In the course of this lawsuit, eBay has even said it’s not about the money.

Okay, So Why The District Attorney Then?

Off the record, one FBI agent told me that they (personally) thought this whole thing was a waste of their resources, and was a civil matter between eBay and myself. Politics is politics, eBay is eBay and when one of eBay’s civil lawyers used to work in the district attorney’s office, you can call in a favor I guess.

By Jeremy Schoemaker

Jeremy "ShoeMoney" Schoemaker is the founder & CEO of ShoeMoney Media Group, and to date has sold 6 companies and done over 10 million in affiliate revenue. In 2013 Jeremy released his #1 International Best selling Autobiography titled "Nothing's Changed But My Change" - The ShoeMoney Story. You can read more about Jeremy on his wikipedia page here.

149 thoughts on “Shawn Hogan Speaks Out On FBI Charges”
  1. There is always two sides of a story and these two sides are pretty good huh?

    This should be interesting and I’d love to see how they (FBI) prove their case.

  2. Wow that shits deep, I always assumed Shawn was actually duping them, this is one hell of a story if its not true!

    1. Indeed, that’s what I thought as well. This story however puts all the blame on eBay. If it’s indeed true, we should all stop supporting eBay.

  3. If everything he says is the truth, eBay is a horrible company and I never want to do business with them again. We all know this type of stuff goes on in big companies, but what he wrote is beyond shady.

    On the other hand, not matter how you look at it, he could have stopped and blown the whistle at any time. Instead, he decided to continue with them for years and let them persuade him to stay. Participating in the shady activity.

    1. Agree on the fact that ebay is totally shady, but if I were him I would have pulled out way before he actually did. Using the guilt factor isn’t enough in my eyes. Still an interesting story though.

  4. This is most interesting to hear. Thanks for this and good luck to Shawn.

    One point I don’t quite understand is this: “….I told them constantly I didn’t want to participate in the program any longer”

    Why stay in the program then? I don’t understand how eBay can hold anyone in a program unless other choose to do that. Just curious.

    1. That is a very good point. A reoccurring theme throughout the blog post was Shawn claimed he was begged by ebay to stay on even though, it was in Ebay’s best interest to let Shawn go, because affiliate revenue is an add expense to a business.

      Shawn’s explanation was Ebay wants to take Google down? A little far fetched if you ask me.

      1. Affiliate revenue is not an added expense…

        eBay needs traffic. And allegedly they were willing to have their top affiliates drive traffic to them in any way possible as long as the affiliates didn’t show up on external compliance reports.

        In this sense it is no different than a company hiring a firm to use cloaking and other techniques to drive traffic to them by “any means possible”

        ebay allegedly was willing to pay for the traffic by using their affiliate commissions.

        Also, the part about “hurt Google” can ring true as well. It is also not uncommon for a company to hire a firm to linkbomb and engage in negative advertising and grey/black seo campaigns for competitor keywords driving traffic to themselves.

        You are especially seeing this on a smaller scale with the local small business market (SEO firms in Australia come to mind asn an example pepople have talked about)

        1. What I meant Dave is what Ebay has to pay out to their affiliate partners is an added expense to their business.

          Shawn said he seen no reason why Ebay had an affiliate program in the first place because Ebay already dominates most of that traffic anyways. So in all reality it would have been in Ebays best interest to let go the top affiliate earners. Something is not jiving in the whole story is what I am getting at.

          The court of law will sort this all out. No matter what I think. So wish him well.

          I guess the moral of the story is don’t give into the pressure of big companies. I don’t know which would have been better not giving in and having to deal with the long reach of a powerful company or dealing with what is on his plate now. I don’t envy him.

          1. Hi Scot! (Nice name!)

            If you fully comprehend the story you’ll realize this was a (necessary) added expense in how eBay was doing business.

            Had they cut him out to “reduce expenses” they couldn’t partake in the traffic he was delivering them and use him as a scapegoat when the hammer swung.

            Who knows if it’s true, but the whole point of the story is they had a budget to spend on affiliates doing things the “grey way.”

    2. Thats easy – He was making millions. Its easy to stay when people are throwing millions at you

      And for those here who say that would get out I say BS –

      I am doubting anyone here including me would have taken the high road – specially since he was not doing anything wrong

  5. This is a very interesting read but there are a few things I don’t really believe. Like how he gave his contact money for a car, tv, laptop, etc. What it really seems like is he gave them those things to allow him to keep doing shady stuff….If he wanted to drop the program for so long then what was keeping him going? Just because your contact begs you to stay a bit longer and you apparently have moral issues with it that’s no excuse to keep it going. Seems like greed took over.

    Either way a well written blog post to say the least.

  6. OK…I’m missing something here. It jumps from him going back and forth with eBay to getting terminated to the FBI going after him.

    Seems eBay is looking for someone to kick but I would like to know more about the details of the charges…why he was Indicted by the FBI on 15 counts of wire fraud and criminal forfeiture.

    What are they claiming he actually did…where’s the 15 counts wire fraud in this story. I don’t see it.

      1. OK…so maybe he stuffed some cookies or something….how does that get into 15 counts of wire fraud?

        Would really like to know the entire story on this!

        1. When the FBI gets involved along with the US Attorney, the US Attorney moves to freeze any assets and funds they believe are the result of the alleged ill gotten gains.

          Ebay says it’s not about the money. Maybe. But it is about taking away the money Shawn needs to defend himself. Ebay wants to win, plain and simple. Their former biggest affiliate has the resources to defend himself. Well, he did…

  7. I always knew eBay had a dark-side.
    Not to mention how paypal was run back then. What a nightmare.

  8. You must not like your friend too much, if you are going to be spreading his admissions of guilt around.

    1. I am guessing you are joking, but Shawn posted this on his blog at digitalpoint.

  9. This type of stuff has gone on for a long time.

    One company actually offered me big commissions (like 2k) per website that I could get to change from other companies affiliate links, to theres.

    Doesn’t sound too bad, apart from the fact they would specifically say it didn’t matter which way I did it, even if it meant trying to hack there servers.

    To say i got worried about the industry and ran a mile would be an understatement.

  10. Interesting stuff. It will be interesting to see how you being an unwilling partner will hold up.

  11. Being fairly new to the affiliate networking process, I think my number one fear would have to be the “grey area”. Just like with any other laws on the books from traffic violations to drug trafficing, the small little details always seem to the breaking point.

    My advice to my clients has always been err on the side of caution. Don’t leave it up to fate (or a jury in this case).

  12. Just to clarify, it’s 10 counts of wire fraud, not 15 (like it matters… heh).

    Wire fraud is more or less the catch-all “crime” that 99% of any advertiser/Internet marketer is guilty of.

    Wire fraud means you used a physical wire that crossed state lines (the Internet for example) to trick the end user for monetary gain.

    In fact if you want to get technical, Rickrolling someone, cloaking, etc. would all be in fact wire fraud. Clicking a link that the user that redirected someone to a different site than the one they thought they were clicking to would be wire fraud.


    1. Well Shawn, you should’ve stopped when you had the chance it takes 2 hands to clap. Greed is good only to certain extent…
      But don’t worry you’ll climb out of this it’s just gonna cost you a little and some sleepless nights…. 🙂

      On the other side i’m happy eBay cleaned up its house… It doesn’t surprise me this whole $hit was going on under that old woman…

  13. thats some crazy stuff. How wounder how much he made tottal? I bet its in the millions

  14. Crazy story… just crazy. The question is whether or not he has proof of the eBay employee’s asking him to do the things that he did.

    If he does then legally I bet he’ll be ok.

  15. Reading Shawn´s article made me think about your previous post, about the Robber barons …

  16. If his version of the story is remotely accurate it seems like he’ll have a pretty strong defense. I mean how can you really violate someone’s TOS if they are telling you to violate them? It seems like a lot of the stuff he says will be verifiable. For instance his affiliate manager should be happy to testify for him and corroborate his story. If eBay really did just tell him to switch his PID it seems like something that would be easy to prove and certainly eBay can’t claim that they didn’t know their top affiliate switched their PID.

  17. Sounds like a BS lawsuit. Having said that, seems strange to me that some hack ebay affiliate manager (who can’t even afford a car) was able to so easily swap Hogan into doing things that were clearly grey.

    I don’t know man. No matter how you explain stuff like this, it sounds strange. A self-made millionaire is getting “coerced” into doing shady stuff by a $50K/year affiliate manager? Including buying him a car. I trust Shoe that Hogan is a good guy, but some juror would probably think the affiliate manager is getting bribed for letting him get away with this stuff.

    1. Good point. That said, if I would make 1 million a month … I´d by him (the affiliate manager) a car AND a laptop EVERY month. No problem at all 🙂

  18. So…

    Now the inhouse changes have been made at eBay — is it now safe to use the Affiliate Program there — or is it not worth the
    effort… I’ve never used it… was planning to…
    Feedback from those STILL using it – Appreciated…


  19. He’s guilty by his own admission. I guess we all know that karma is a b!@#h. I have learned to hate ebay over 5 years ago. I will only buy from amazon.

  20. Shawn’s story sounds a little fishy to me. “Oh, I didn’t want to make $1MM per month, but eBay forced me to do it.” He makes it sound like eBay forced him to trick the system by putting a gun to his head.

    Who wouldn’t be happy as hell to be making $1MM per month, even if you knew you were bending the rules and eBay knowingly looked the other way? Something just doesn’t sound right to me. His entire, I’m the victim story, is BS!

    1. Rules weren’t meant to be bent, twisted, massaged, stretched or broken – and I would feel similarly uncomfortable if a company was suggesting I break their rules because it was making loads of cash. I can understand Shawn’s side and it is quite conceivable that they could ‘guilt’ him into staying. What would you do if a company the size of eBay was telling you ‘please don’t leave us’?

      Money isn’t everything you know – and it certainly isn’t a reason to ‘bend’ rules.

  21. “That’s my story and I’m sticking to it” should be the byline. There were 365 days x 3 years = 900+ days to really leave the eBay program, not just threaten.

    Now how can eBay claim they were defrauded out of 15M by none other than their top affiliate without admitting they SUCKED at whatever they were supposed to be doing to prevent the fraud in the first place. I don’t think they can, and I can’t be convinced they played the victim role exclusively – not with this size of a matter and not with the #1 affiliate – all eyeballs were likely on him.

    If nobody is innocent, then what I see is a hungry company using money to manipulate a weak-willed affiliate into doing their dirty work, then turning around and crying foul.

  22. This is totally crazy. I dealt with legal issues with the postal inspectors.. thousands of dollars in legal fees later, the case was dropped. Now i’m dealing with a legal issue over content on one of my blogs, the local D.A. is calling as harassment. And of course, my lawyers and I call it freedom of speech. It’s just a sign that the legal community has no idea how to handle internet based businesses.

    From my experience with the Feds.. you have to watch the level of proof they have to show in court because it is much much less than what is needed to convict in state court. It sucks that they can attach such general charges to convict. Such as conspiracy & wire fraud.

  23. Just WOW.

    The only thing I don’t understand is…why Shoe doesn’t have any affiliate links to eBay in this post. lol

  24. wow…..great post, I really do hope this works out for him! He can spend lots of time in jail of it dont!!! Wish him the best of luck!!

  25. This whole story stinks. It’s dripping with “they made me do it”. It’s so easy to blame others then to accept responsibility. This Car was sold out everywhere? What car was this? The bat mobile???

    Seriously. A very weak setup and delivery as to why he sent someone $50,000…..umm…..i said i’d buy him a car…ya a car…..but it was sold out….ya….umm so i just gave him cash…ya ya….write that down!!!!

  26. This is so interesting.

    The area of internet law is so new that I imagine any judge, jury or prosecution will have a hard to navigating it all. I think it is going to be a massive area of law soon.

    Hope it all works out for everyone.

    The Tyrant

  27. Most interesting blog wrapped in the makings of good conspiracy stories but the fact that someone has been charged makes it more real.

    eBay certainly have upset many affiliates over the recent years, ever since going in-house and nothing in that area seems to make the users happy.

    Now I can follow this with even more interest

  28. It was interesting and useful. The internet is the place where everything is possible and laws are quite friendly for hackers.
    It should really start new change of laws and the virtual space to be equal to real one.

  29. LOL. He’s in the middle of legal proceedings and he’s publishing stories like this? BS with extra capital letters.

  30. I’m sorry, but I have a difficult time Shawn was somehow coerced into continuing on and that his buying “gifts” was just a mistake on his part.

    I also find it really, really hard to believe that anyone wants to quit making $1M/mo.

    Though, if all he says is true, I’m sure he kept all the emails that will prove he was an unwilling pawn in this ebay conspiracy – and don’t get me wrong. I think eBay can be a scumbag operation. However, with everything said here, I’d think eBay (or those individuals involved) would be facing charges of their own to answer.

  31. I always say KEEP IT LEGAL, or as legal as you can. I can’t help to be envious of those numbers! Number 5 Google ranking…..over 1M per month. DANG!

    But it’s all for nothing if you are sharing a jail cell, and Bubba is smearing cherry Kool-aid on your lips for lipstick and braiding your hair. KEEP IT LEGAL & PAY YOUR TAXES.

    Great story Shoe-meister and another great Post.
    Thanks for sharing.

  32. Wow… that some crazy stuff…

    Thanks for posting – I seriously hope this guy has his ducks in a row and has access to all of the emails.

    Someone may have asked this already but how exactly did he make?

    Just curious..

  33. There is a progam for people like Shawn who spent three years doing something he did not want to do. Its called codependants anonymous. Good job the money was so good or he would have been miserable.

  34. I’m also having a very difficult time believing Shawn was coerced. He made a point to keep stating that he wanted out at each stage of this activity and making it seem it was the Ebay associates fault for pressuring him to keep sending traffic against their TOS. Sounds like he needs to grow a pair and think for himself or face the consequences.

  35. I can see it now:

    E-Bay sent a few goons over to make him a offer he couldn’t refuse.

  36. Shoe, tell your man to stop making blog post about a open case. You never speak out like this. I bet his lawyers drop his ass. Long live DP.

  37. Wow….someone would question the cashflow and beg for it to stop…yeah right…I smell some serious BS

  38. Hi,

    The dark side of ebay finally caught with them. Let stop guessing. Shawn, tell me, are you innocent?

  39. I made some good money as ebay affiliate (co-registration program) through Google AdWords during those times too. This continued for about 6 months. Strangely my affiliate manager was not too happy and brought down the price that was paid to me. I assume from $1.5 or something to $0.50. Point to be noted is that the actual site STILL showed the price paid to affiliate for a signup was $1.5 – it means they deliberately paid me less for absolutely legal stuff I was doing. As I was doing PPC this was clearly not affordable and I had to stop the program.

    Strange that eBay asked Shawn to continue as an affiliate and even asked him to go against their terms – and a small affiliate like me who was doing a legitimate business was offered less so that I quit their affiliate program.

    eBay is a strange company. True!

  40. So you knew Shawn since 2000, but DP did not start until 2003 ?

    Did you meet him at a software convention or are you making shit up now ?

  41. We all learned something here. Everybody hates Google. Especially Ebay. Ebay is evil. Shawn hates money. Money corrupts. Google is a monopolist.

    Ok seriously I think it went like this:
    -Shawn: wow im making 50k a month in affiliate, its a dream!!!
    -Ebay: You can make more blackhat
    -Shawn: wait isnt that unfair
    -Ebay: no, just try it, nothing to worry about
    -Shawn: tries it, now makes 1 million a month
    -Shawn: OMGFG 1 million!!! after a while he thinks hmmm can this continue, its blackhat right. What if Ebay tries to f* me over??? I need to collect proof they are in on the blackhat scheme.
    -Shawn: I use reverse psychology. hmm Ebay maybe I should quit doing blackhat?? Shawn wants the money but also wants reassurance
    -Ebay: yeah, here an email where we explain it
    -Shawn: great, now to collect more proof!
    – SHawn: if i do this every month ill have proof every month!
    a year passes. great i have alot of proof nothing can happen now.
    suddenly ebay cleans house, shawn is worried and stops blackhat. Shawn is sued months later.

    The rest is history..seriously, as if shawn didn’t do it for the money? Everybody would have done the same in his place, but him trying to say he didnt meant to make money doing blackhat is just trying to win the public over. Anyway im taking Shawn side anyway, because i know I would have done the same thing.

    1. There is a difference between making money because you need it and making money for no reason other than to make more money. And in the last year, the money crossed that threshold for me. In the last year, the money was to the point it wasn’t making my life any better, only worse. Until my last day with eBay I was living in the same apartment I always lived in and certainly wasn’t trying to save up for a $100M private jet or anything like that… So yes, there is a point where more money becomes pointless, especially when it’s causing other problems.

      1. Yes, I understand.

        There is a point where the stress and everything that goes with the amount being earned vs the actions it takes to earn it makes it not worth it anymore.

        Best of luck


      2. Sounds like he was bribed by ebay staff to do things that were against policy in order for them to gain personal benefits.

        Unfortunately this is a big issue…

  42. What puzzles me is how a guy as smart as you want us to believe that story is the real deal. Come on, what’s the trick?!

    Need to prove you’re a innocent victim? Of course you’re not, but you’ve learned the hard way! Take note: having inside men to lobby can only be done by the real sharks on Congress and Wall Street, not by YOU, or me.

    So, doing $0,9M/m was ok, but $1M/m was not ok? How about 9,999?

    One think you convinced me: you were too naive. You learned how to make $1M/month but missed learning how to play on the big sharks pool.

    You played the wrong cards on the wrong timing. Take my advice: contract you know who (no, NOT lawyers) and take that letter offline at once.

  43. Hi Shawn,

    I heard both side of story and I’m with you. Everyday, the stories getting wilder AND WILDER. It’s like the world against you. Do you think you going to win this battle. I mean a billion company wants to bring you down.

    Do you stand any chance?

    Shawn, hope god bless you. I do.

  44. Strange that eBay asked Shawn to continue as an affiliate and even asked him to go against their terms – and a small affiliate like me who was doing a legitimate business was offered less so that I quit their affiliate program.

  45. Nice but twisting story. Should I envy the car, the plasma tv, and the nice laptop? That was crazy. I hope everything will be just fine and fair to everyone.

  46. Well, there’s a lot more to dig into, but so far a LOT of Shawn’s story definitely sounds believable. There’s so much shady stuff going on in places where the average person wouldn’t expect it.

  47. The question shouldn’t be why Shawn Hogan was involved, but instead should be “Why it took eBay so long to come clean?” Sounds to me that eBay is also involved with wire fraud, not to mention PayPal which btw is NOT FDIC insured. All it takes is one close up shop and all your money is trapped inside!

  48. I wonder how long it will take for us to get some updates on what is going to happen with the trial!!! Wish him the best of luck!!

  49. Scares the heck out of me. How can affiliates trust the companies we drive traffic to.

  50. This was some whacked out stuff going on. What I can’t understand is why didn’t they just offer to buy out your domain that was ranking for “eBay” or was it from blog post?

  51. Reminds me of my myspace days when i was pushing crazy amounts of traffic per day. Not saying no names but networks like True, Fling would have me change my PID’s and forward me complaints directly from Fox Network legal team.

    They all want the easy traffic no matter how u get it.. Once the hammer hits their quick to sell you out.


    Jay Styles

  52. this is a very good read. hard to believe, but if you think about the larger corporate greed, etc., it might not be far off the truth about what happened.

    the only issue I have is the discussion of the case. Is it settled or ongoing?

  53. Seems like you have a enough money, now please change DP back to the way it used to be, all Free and 4 sig links allowed!

  54. Sounds like a Big Company way of doing business…this is our legal document to “prove” we are on the up and up, and you can for the most part completely ignore it, just don’t get caught…because if you do get caught, we might just have to throw you under the bus for breaking our terms of service contract (which we told you to break in the first place).

    Hopefully it works out for you Shawn, and if in the worst case scenario you are required to do jail time, let it be for about a year at one of the Florida country clubs.

  55. The problem here is that Ebay will probably base their defense on the classic, “he said she said” argument, unless there are real records of these conversations. It seems like Shawn is really trying to show himself as being an honest person, swindled by the big bad corporation but his defense falls short.
    If you are intelligent enough that Ebay wants you so bad even to the point where they’re willing to break their own rules, then the “guilt trip” is a very weak defense for helping them out in the littlest way.

    Money obviously matters or else you would’ve gotten out of it a long time ago, and could’ve moved onto some other money making venture. Ebay is not innocent however but as one commenter already pointed out..you better know the game if you want to play with sharks..

    Besides, I think with all the readers of these sites who look for ways to make a fifth of the money you made, you won’t find sympathy when you want to go the foul route..

  56. interesting story, but I am not sure that he should be so open about everything, let him deny everything and ask the FB~I to prove everything.

    This case is a nonsense case, I suggests he takes charge of his defense. In reality in the us courts system, no court case has to end. But lawyers can agree to shorten the case.

    There is a book this man has to read, it is called ” the Rape of Justice” by Eustace Mullins who fought many cases without a lawyer. Some of his lectures are on youtube.

    This case is a bit hard to find but well worth fighting.

    Shame to the the people who thought life will get easier when the courts and the fbi got involved in internet marketing.

    But making that sort of money was always going to lead to problems, people are always talking about how good superaffiliates have it.

    “Wire trap” charge shows you how weak the case is.

    They are maybe going for him because he is a big name and he has money. But that is what happens with the courts system.

  57. he was stuffing cookies. get it? where in his drivel filled post that sounds like it was written by a ten year old does it mention that’s what he is charged with. if you visited one of his sites, you got an ebay cookie laid down on your machine and he got 7 days of commissions. cookie stuffing is not only TOS but also theft by deceit esp. when it rises to the level that he took it. the whole post sounds like a load of crap to me. cookie stuffing adds no value to the transaction, it just steals half the commission from a transaction that ebay would already get, or steals half from the guy that legitimately laid down a cookie that he overwrote. and all that half wit conspiracy stuff sounds just freakin kooky……..

  58. Well, you could used the “additional” money to invest that in more projects (or giving it away to charities?).

    A part from that I can see the problem is the top exec at eBay didn’t know about this kind of job going between the aff. managers and the affiliates.

    If it is this the point, well, Shawn, you can kiss the baby!

  59. Just out of curiosity, could you take a plane and go out of the country or will you be pushed back at the airport?

  60. I think that you are always innocent until proven guilty. That said on this level it is had to say what is right and what is wrong.

  61. H O L Y Crap! Is this true? Why did you constantly want to quit? If you pay your taxes and are not breaking laws, why quit?

    You don’t screw with the IRS or Google!

  62. Though it’s pretty hard to believe his part of the story but I think it might be true. Would be great to read how the whole process evolves.

  63. he was breaking laws and he knew it. even if the nutty conspiracy stuff is true, it was the CJ manager’s looking the other way. they may have been compensated by the total affiliate revenue, and have an incentive to cheat. but that’s like saying “this guy handed me a gun outside the bank, and encouraged me to rob it” so it wasn’t my fault. ebay was a victim, and they didn’t approve of it, trust me. they were being stolen blind by cookie stuffers.

    the revenue that he and CJ took was rightly ebay’s no matter how you look at it. if he hadn’t laid that cookie down either another legit affiliate or most likely ebay itself would have gotten the revenue. he intervened and that’s fraud.

    all his this whiny crap is just a bunch of fluff. theft by deceit, fraud etc. whatever you call it, it’s against the law. when you do it to that level, it’s a BIG crime.

    that being said i applaud the dude. i hate ebay like most everyone else. he should have taken his money offshore and when he got wind of the trouble grab your bag and passport and sayonnara. he could be in costa rica with little brown sex machines all around him. now he’s just gonna be somebody’s brown hole bitch, lol.

  64. Good luck Shawn , ive said it previously at DP i know , however the more i read this and the comments that come out of it are truly astounding.

    I suppose the term “in alot of shit” is a reality at the moment 😉 Hope it gets sorted in your favour.

  65. I cannot program it takes me a morning just to do a spreadsheet.

    What I don’t understand is that why Mr. Hogan, who must be talented, did not develop a Facebook,Farmville,Betfair etc or some other legal lucrative business.

    For the benefit of Meg Whitmans’ lawyers who are reading this thread


    again back to Mr. Hogan, sound like he needed guidance.

    My advicenow is to keep a low profile .

    Wasted talent.

  66. Hey Shawn, please make sure DP will run smoothly while you are gone, if you need a partner on it give me a bell!

  67. i love to learn about the inner workings and backroom deals at big companies

  68. In all honesty, this has been very one sided in the media, and has given the general public the wrong end of the stick. The media instantly jumps on the band wagon, sticking up for the big companies like eBay, and belittling entrepreneurs like Shawn, who they hate due to him being successful!

    In all honesty, I think the FBI and eBay have better things to be doing with their time! Plus, eBay sucks, they have no customer care at all so its about time they got a kick in the teeth

  69. Jeremy you’ve got to follow this post up with one about eBay’s current EPN situation, namely how they are scamming affiliates hardcore with their new mystery algo. Look at eBay motors vehicle sellers, the March 30th fee changes saw all of their earnings drop to 1 cent epc.

    Front loading fees so that affiliate clicks can earn nothing is par for the course on eBay motors, 90% + pf the sellers are dealers who pay no closing costs (after the 4th sale in a calandar year).

    Check out their ABANDONED affiliate forum where no questions get answers, eBay is the scammer, bigtime!

    1. I agree with John, we need to get a follow-up about a story as such as this one which people will keep telling for years. After I finished reading the whole story I felt it’s like a very interesting movie that lacking “The End”

  70. If they are using you as an example I hope you kick their ASS!

    If your story is all above board then you know “what goes around comes around”

    Good luck


  71. First and foremost, Ilike to state that fraud is fraud, whether perpetrated by ebay or by Shawn. Offcourse, hindsight is always 20/20 vision. But if Shawn ever knew that the hand of the law will catch up with all these perpetrations either under duress from ebay or done by himslef willingly and gainfully so, then the story will have been different.
    I do not know the whole story (I have not heard about the counts, or ebay’s side of the story), but I can come up with several variations of what could have happened and one of them does not favor Shawn – and that is that he was paying his affiliate contact money to keep quiet about all that was going on or help him get out of the mess whenever he shows up on the compliance list, which they did until ebay found out about this and terminated them (this variation will be confirmed if Shawn’s affiliate contact has been filed with allegations too). I am writing about this possibe variation based on the fact that Shawn was running an affilaite program where he was raking in commissions of over $1million/month,this is a solid company with serious income and if such companies are going to buy a car for their business contacts, they better have a way to have that on paper and make sure it is legal, the only reason anybody will give a huge sum of money, buy expensive gifts and not having it on paper is if there is a shady deal behinf it all.
    I am not concluding that Shawn’s dealing was dubious at all, you have to consider all possible variation or find out the truth about what exactly transpired to be able to conclude anything(the law will do that), I am just stating that Shawn may have made some mistakes along the line that makes him look more like the culprit.

    1. what the #?&%$ are you talking about fraud? If anyone could’ve been frauded it’s ebay… Only because someone sets a cookie on a users computer doesn’t make it fraud really, nor wirefraud! The whole story sounds as if some guys working for ebay were indeed involved, but not ebay as a whole… So, in the end no users have been frauded, only ebay in a certain way. But since he had the allowance of the ebay employees who were responsible for him, and gave him green light it’s no fraud at all. point. that’s it.

      And I def. believe that ebay employees, same as affiliate managers etc etc. told him to do it, since they got their piece of the pie.

      No fraud, nothing, Shawn Hogan is a smart mofo in my opinion! And nothing will happen to him.

  72. This story has blown my mind, as in the UK, or maybe just myself, haven’t heard about this.

    I hope the truth comes out in the end and it’s a real shame that this has happened. As an eBay seller this tarnishes my impression of eBay…..Then again eBay’s image in my mind has been tarnished for well over a year.

    Good Luck Shaun, and thanks to Jeremy for posting this.

  73. Very impressive story indeed! But there’s something that I must point out: even if it was EBAY to tell you to do the “bad” things you actually DID it (whatever you did in your experiments) and you’re both guilty on this… Most of it isn’t your fault because you were some kind of “obliged” to do it you still have a part of the guilt.

    And btw do you have any proof for what you’ve said or is it just your word against eBay (in this case we all know the not-happy end).

    After all you might end up losing a big % of the money you won from eBay to win the case against them 🙂

  74. Ok he stayed in it after he knew he should’ve left but for real….. The FBI doesn’t have anything better to do but to go after bloggers and affiliates. I am sure there are some drug dealers and king pins and terrorist that they could be looking for.

  75. Wow does not say good things about Ebay if that is true. However Shawn should have gotten out long before he did. He knew they were asking him to do stuff that was not right. Let it be a lesson to all of us to stay clear of similar situations.

  76. Excellent article. I seldom read an article and all of the comments but his one captivated me.

    I would really like a follow up on this if there is one. Any news about the other people involved and terminated by eBay?

    If some of the other former affiliates would comment it would be great, but then they may want to remain invisible until all of this settles and the court proceedings run their course.

    I wish Shawn all the luck and strength to get through this. His story is plausible considering the amount of money he was making from eBay, but convincing a court will be a challenge if he does not have substantial evidence to back up his story.

    In the end I am sure that someone will want some retribution and at the least he will probably get a slap and a fine, unless his story is an entire wash.

    The court costs and legal defense fees should be more than enough to satisfy anyone, but that never is the case. It seems that when prosecutors and businesses smell blood and money they only want more.

  77. Do you know of the content reminds me of one other similar a bed that Someone said in other places?

  78. It’s amazing to me that ebay would think of affiliate marketing in that way. As this loophole for them to get away with doing “grey hat” stuff. I’ve always thought of there program as being extremely white hat and they’ve always had a “stellar” reputation.

    I also was a little shocked at the people coming to his doorstep. Nobody walks up to Warren Buffet and demands to know “how he makes all this money” (not that I would want anyone to do that).

    I remember I had a family member ask me what I was doing and then say to me “make me a website, too”. As If I could just flip a switch and make money. I just can’t believe how many people think like that. They look at internet marketing as a scam or a way of getting out of doing real work with a “get rich quick scheme”.

  79. I certainly hope you sue them for defamation of character. What a story! The duress you suffered though years of coercion must have been very stressful. Definitely speak w an attorney.

  80. WOW!!! It’s scary that you could have charges brought against you simply for being a top affiliate and doing things that the company tells you is okay to do.

    But Shawn was definitely on to something when he was questioning, why Ebay would want to pay so much in affiliate commissions when they don’t have any real competition –

    This is all very interesting. I will be curious to see how it all turns out. But I think Shawns assumptions are right on.

    Shoemoney – In all your years of being a top affiliate, have you ever felt like you were a part of something shady? (Without your knowledge of coarse)

    Take it easy.

    PS – Let me know if you need a good wingman for the next time you hit the Playboy Mansion!

  81. eBay (under meg whitman) was one of the shadiest companies I have ever dealt with (and that’s really saying something). this goes all the way up the c-level chain of command. they made more money playing (halfway legal / totally illegal) games with stock options than in actually operating their big ugly online yard sale. thank god she didn’t win the election here in cali.

  82. The Guy was doing ” Cookie Stuffing ” which is 100% illegal and same as stealing money from bank…

    He was making 1M dollar per month from ebay and they were investigating about his traffic… ebay smelled some thing…

    Then Shawn decide to stop because the Snow ball was getting bigger and bigger
    finally he stopped his affiliation with Ebay.

    Ebay expected to see a decrease in number of sales in next month… But guess what…
    Nothing happened.. because shawn was not sending any customers to ebay he was just dropping cookies on computers and stealing ebay own customers

    Thats why ebay makes sure that is 100% cookie stuffing and they tried to sue him.

  83. That’s the problem of people making use of other people. When a giant company do things they are quick to cover their ass. Good luck to you on the FBI thing

  84. Hi, I am really happy I’ve found this information. Nowadays bloggers publish just about gossip and internet stuff and this is actually irritating. A good site with exciting content, that’s what I need. Thanks for making this website, and I will be visiting again.

  85. Over and over in this story shawn is telling us he tells ebay he does not want to be in their program anymore. He also says he is not driven by money(he’s already rich).

    Something missing here. He’s a grown man who can make his decisions. He has lawyers. He could stop anytime he wanted.

    Something is missing here.

  86. Getting glimpses into the back side of the web like this is absolutely frightening. Considering the virtual world will be our new home, it doesn’t look like we will achieve any greater measure of peace or security.

  87. Fantastic read, totally captivating and a real eye opener. Would love to say I believe Shawn’s side of the story 100%, but unfortunately there’s always two sides to a story and does have good reason to try and swing things his way in this article. Not being judgemental either way, I really don’t know what to think about it all?

  88. Well I learned a long time ago there are three sides to every story.

    The first side, the second side and the truth.

    Hopefully the truth is sorted out soon.

  89. haha yeah…oh eBay, stop sending me so much money every month. Oh you’ve sent me too much money, if you don’t stop sending me so much money i’m going to stop sending you the traffics!!!! Guy is a con.

  90. Very interesting read. I know this story is old (2010), have there been any updates since?

  91. Shawn, you are a scum bag. Look what you have done to innocent people’s lives? Stollen millions and think you have the right to fight this case? You are going down, and going down hard… Tell bubba what’s up… You fool

  92. Great info. Lucky me I discovered your blog by accident (stumbleupon). I have bookmarked it for later!

  93. This is absolute craziness. I had no idea that this kind of stuff happened, nor could I ever even imagine it. This is like the stuff you see on movies like “Boiler Room.”

    The update looks like Shawn could go to jail for cookie stuffing.

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