The U.S. Department of Justice (DOJ) is suing a California broker over an alleged $1.3 billion ticket scalping scheme involving 18.5 million tickets, including 7,600 for a single Beyonce concert.
San Diego-based REPS & Company, which bills itself as a “data and technology centric company in the entertainment industry,” was sued by the DOJ and the Federal Trade Commission (FTC) on Thursday.
The company was sued for alleged violations of the FTC Act and the Better Online Ticket Sales (BOTS) Act, which prohibits circumventing the measures Internet ticket sellers use to ensure equitable consumer access to event tickets.
In other words, they allegedly created thousands of accounts on ticket-selling platforms such as Ticketmaster and AXS to get around purchase restrictions. They also allegedly used addresses or phone numbers belonging to someone other than the actual person purchasing the tickets.
The company allegedly went to great lengths to buy thousands of tickets
In order to circumvent security measures, the prosecution alleges that REPS employed personnel in the Philippines, used virtual credit cards and concealed IP addresses. The complaint also claims that REPS made minor modifications to an account holder’s name or address when issuers prohibited or canceled purchases. According to the FTC, internal company records revealed that REPS officials specifically addressed methods to prevent the accounts from being blocked.
“The complaint, filed in the U.S. District Court for the Southern District of California, alleges that since 2022, the defendants have routinely circumvented ticket issuers’ controls to purchase tickets in excess of purchase limits for thousands of events,” the DOJ said in a press release announcing the lawsuit. “The defendants then resold tickets to these events on the secondary market. Defendants spent more than $1.3 billion to amass over 18.5 million tickets for these events and generated at least $120.8 million in profit.”
The complaint claims that the business made $833,323 from a single performance of Beyonce’s Renaissance Tour on October 1, 2023 at Kansas City’s Arrowhead Stadium by purchasing 7,624 seats. In another case, REPS & Co. allegedly made over $120,000 in profits by using 700 accounts to buy 5,430 tickets for a Pitbull show at Empower FCU Amphitheater near Syracuse.
“REPS’ entire business model is focused on trying to game the ticket-purchasing system in order to obtain as many tickets as possible to resell at inflated prices to consumers,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in a statement.