BizBuyBeware: How to Lose Your Life Savings Online
by William Battaglia
I worked my entire adult life to be able to buy my own business. Living frugally, I saved every penny I could to realize my dream of building something that was mine, and attaining true financial freedom. At least, that’s how I thought it would go. Instead it turned out to be a never-ending financial nightmare.
In July 2019, I visited www.bizbuysell.com to search for a business to purchase. Since this is a public company, and the largest and most popular online marketplace for buying and selling businesses, I assumed it was a safe and legitimate site. Sellers pay to post their businesses, which I saw as a guarantee of both their intent to sell and their authenticity, because their credit card information would have been verified by the company. Indeed, one business broker describes bizbuysell.com as, “like picking up a prosperous future at the corner market.” What could sound more wholesome and secure than that?
I found an e-commerce business listed for sale and contacted the seller to say I was interested. He sent me financial statements and other business documents reflecting a thriving enterprise with a website that had been up and running for nearly a year. I did my due diligence, searching his name and the name of the business for complaints or liens and found nothing suspicious. Like puzzle pieces snapping into place, every detail fit neatly into the picture he’d painted of an established business with a lot of potential. I made him an offer and wired a $160,000 down payment to his bank in Virginia.
It did not occur to me that the reason his story fit together so well was because he’d made the entire thing up. All of it, the financial statements, the website, his address, even the name on the credit card used to pay for the bizbuysell.com listing, was an elaborate fabrication. The documents were forged, the website made by free-lancers he’d hired, the phone a burner with a Google voice number. His true business was using bizbbuysell.com ads to scam people out of six-figure down payments before vanishing.
Red flags started to appear when he kept stalling about handing over the business, once we had signed the contract and I had wired him the money. But it was a few months later, when I visited bizbuysell.com and found the identical business listed for sale with a different name and owner but the same Google voice phone number, that I realized I’d been scammed. I confronted the fraudster about it in a text — he wouldn’t answer my calls any more — and he lied and denied and, when I told him I was not going to let him get away with robbing me, disconnected his phone.
I set out to unmask him. I was angry but I was not going to allow this criminal opportunist to victimize anyone else. I’d reported him and his ads to bizbuysell.com as soon as I’d realized what was going on, receiving only a form letter saying the firm would look into it. Now, with my only line of contact severed, I reached out to the firm again for help tracking him down. I was told there was nothing the firm could do. In fact, their surly customer service agent told me they did not even carry liability insurance for this type of issue. Despite my reports, the fraudulent listings stayed up for another month, and I later learned another person was scammed on bizbuysell.com by the same fraudster using the same listing.
I was shocked by the firm’s indifference — by leaving up the listing even after I had reported that it was a scam, weren’t they knowingly facilitating criminal behavior? Wasn’t that a crime? Later I learned, bizbuysell.com faced no liability because of Section 230 of the Communications Decency Act (CDA230), which insulates online platforms from responsibility for content posted by users. Social media companies say the law is necessary to preserve free speech and prevent censorship on-line. In the hands of companies like bizbuysell.com, however, the protections of CDA230 have become an excuse for lax oversight that turns the law on its head, letting fraudsters operate with impunity and shifting all the risk introduced by their criminal acts to people like me.
After trying unsuccessfully to get help from bizbuysell.com, I contacted the FBI’s Internet crime center about a half-dozen times and got no response. Unsure what to try next, I parted with another $10,000 and hired an attorney. Since the bank I’d wired the money to was in Virginia, I made a complaint to the Virginia Attorney General’s office and received a form email saying that there was nothing they could do to help. Meanwhile my lawyer filed subpoenas for all accounts related to the fraud that might help us learn the fraudster’s real identity: the bank accounts, Google phone, bizbuysell.com, Gmail, Shopify, etc. The bank made us jump through legal hoops for four months before agreeing to hand over any information — an eternity when dealing with slippery fraudsters.
The first subpoenas yielded little useful information because the fraudster always used aliases and fake addresses. That is how I found out that bizbuysell.com does not even conduct the bare minimum due diligence to verify the identity of those paying to post listings on their site. The names, phone numbers and addresses the fraudster provided on the listings bore no resemblance to those on the credit cards he used to pay for the listings. This kind of information is easy to detect and prevent, meaning if the platform had engaged in basic oversight, my losses could have been avoided. But even when I brought this evidence to bizbuysell.com, the firm did not remove the fraudulent listings. Incredibly, the listings were eventually removed at the fraudster’s request, because my investigation prompted him to take a lower profile.
At every turn, the system seemed designed to protect and aid the fraudster’s interests, not mine. I was getting nowhere. An inspector from the Virginia Attorney General’s office took an interest in my case but soon came back saying that what I needed was a criminal investigation, which required a federal agency and was therefore outside the scope of his authority. I had already reached out to the feds, I told him, and could not get anyone to listen, much less care. Please, I pleaded with him, do not abandon me.
The man was my saving grace. He put me in touch with a colleague at the United States Postal Service who agreed to look at the evidence I had gathered. As documents and pieces of information trickled in from the subpoenas my lawyer had filed, I forwarded them to him. Months after requesting it, the bank account information came through with the real name, address, and driver’s license photo of the man we were looking for. Armed with that, U.S. Postal Inspectors were able to follow the money trail and find not just the scammer but also his other victims.
Their investigation revealed that this same individual had defrauded five people for close to $1 million — with one third of that amount coming from the two of us he defrauded using bizbuysell.com. When they finally caught and charged him, it felt like a weight was lifted off my shoulders. But it was bittersweet: I had been driven by a desire for justice, but I was also hoping to have my life savings returned. The fraudster will likely serve time in prison for what he did, but there is almost no chance that any of his victims will get any money back. Turns out he spent every dime of our hard-earned savings on a fancy SUV, expensive travel and hotels, leaving nothing in the bank.
I am still trying to absorb the full impact of it. It’s life changing — or, really, life ruining. How does a working-class individual ever recover from losing $160,000 plus attorney fees? Another of his victims was scammed out of $400,000! We both lost our life savings, our security, our retirement. And while I am glad he has been charged, I remain angry. The U.S. Postal Service was the only federal agency willing to help me. That should be a sobering thought. Even more sobering: without my doggedness, this scam artist would still be stealing people’s fortunes and futures with no one to stop him. BizBuySell.com did nothing to respond to my reports, or my proof, because the firm did not have to.
BizBuySell.com is owned by a wildly profitable $1.6B public company called CoStar Group that claims to be on “a mission to create efficiency and transparency” and to provide “comprehensive, objective, reliable information” through its family of platforms. The firm has reported record breaking earnings during the period of my investigation. I can’t help but wonder what percentage of those earnings is derived from false ads for fake businesses paid for with stolen money. How much of their revenue comes at the expense of ordinary people like me?
I don’t think Congress intended for CDA230 to insulate firms like CoStar from liability in the event they operated negligently, and I believe CoStar should bear some responsibility for what happened to me. As long as the firm is collecting monthly listing fees from scammers posting false businesses for sale, CoStar and its investors are enabling fraud and profiting off it. What’s more, by knowingly ignoring fraud on bizbuysell.com, CoStar is also impeding its detection and resolution, thus actively causing material financial harm to users in the interests of profit. Such practices are as predatory as those of the fraudsters it supports, and should be as illegal.
Like other crime victims, I find revisiting what happened sad and depressing. After my experience I started policing the bizbuysell.com site personally and found another convicted fraudster who was listing businesses for sale on their site. A simple google search uncovered his identity — unlike the man who stole from me, this guy used his real name. I contacted bizbuysell.com and asked how they could allow a convicted fraudster to post businesses for sale on their site. After weeks of silence I received a generic email stating that they would look into it. Meanwhile the listings had remained up, an invitation to anyone to come get scammed.
The law may not be on our side — yet. I hope by telling my story it soon will be.
