In a case where the virtual world crashes headlong into the real world’s legal system, a Pennsylvania man has pled guilty to felony in Indiana court stemming from a fraudulent land investment in Second Life.
This story of a virtual fraud leading to real arrest and prosecution in Indiana caught my eye because I am familiar with the Hoosier state.
Josh Bills was convicted of scamming a Morgan County woman out of more than 50-thousand dollars. The woman gave Bills over $50,000 for the purpose of expanding his real virtual real estate business. After Bills spent $3,256.10 with Second Life and then put the rest of the money into his E*Trade investment account, the Indiana woman contacted the office of Indiana Secretary of State Connie Lawson. Lawson went to work and Bills was arrested.
In a first-of-its kind case, Bills pleaded guilty in July to a charge of theft, a class D felony, and was sentenced to three years of probation and ordered to pay full restitution of $53,500 to the victim. In what could be a precedent setting move, Lawson prosecuted Bills for not being a registered business in Indiana.
“Real estate schemes are some of the most common forms of investment fraud that come across my desk, but this is the first time we’ve seen a virtual land scam,” said Secretary Lawson.
Obviously there was no “land” being sold here. The “land” in question was similar to all land in Second Life. It is nothing more than server space …or is it? Lawson gave the case enough value to prosecute Bills because neither he nor the product he offered were licensed in Indiana.
When you consider that Bills was in Pa, and the victim was in Indiana, and the land to be purchased was essentially storage space sitting in a server in California, you have to kind of admire Lawson’s office for even investigating Bills attempt at fraud, much less making an actual arrest and prosecuting the case. Since it appears to have ended with Bills agreeing to plead guilty, I don’t think an appeal is likely, or even possible. That could have been interesting. I think that, as virtual reality develops, it will be interesting to see real world governing bodies try to apply existing laws as more and more people step back and forth from the real world into the virtual one.