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Three Long Island-based ticket brokers agreed to pay around $3.7 million to settle alleged violations of the Better Online Ticket Sales (BOTS) Act, the Department of Justice and Federal Trade Commission announced on Friday. According to the announcements, these are the first enforcement actions that the department and the FTC have brought under the BOTS Act.

The companies — Just in Time Tickets, owned by Evan Kohanian; Concert Specials, owned by Steven Ebrani; and Cartisim Corp., owned by Simon Ebrani — were accused of violating the BOTS Act, enacted in 2016, which aims to prevent ticket brokers from buying large numbers of event tickets and reselling them to interested customers at inflated prices. The act prohibits individuals from circumventing access controls or measures used by online ticket sellers such as Ticketmaster to enforce ticket-purchasing limits. It also prevents the resale of tickets obtained by knowingly circumventing access controls.

As alleged in the three complaints filed by the United States, the three companies committed violations of the BOTS Act to purchase from Ticketmaster thousands of tickets that they subsequently resold for millions of dollars in revenues, often at significant markups.  The defendants are alleged to have circumvented Ticketmaster’s restrictions on users holding multiple accounts by creating accounts in the names of family members, friends, and fictitious individuals, and using hundreds of credit cards, according to the announcement; they also allegedly used ticket bots to trick tests designed to prevent nonhuman visitors, and the complaints claim that the defendants used programs to conceal the IP addresses of the computers they used to make purchases.

“These defendants are alleged to have cheated the system to the detriment of consumers,” said Acting Assistant Attorney General Brian Boynton of the Justice Department’s Civil Division.  “Today’s filing serves notice that the Department of Justice will enforce the Better Online Ticket Sales Act in appropriate cases.  We are pleased to work with our partners at the Federal Trade Commission on this and other matters important to consumers.”

“Those who violate the BOTS Act cheat fans by forcing them to pay inflated prices to attend concerts, theater performances and sporting events,” said Acting U.S. Attorney Seth D. DuCharme for the Eastern District of New York.  “This office will spare no effort in prohibiting deceptive practices that harm consumers.”

The three stipulated orders entered by the court assess civil penalties of $31 million — $11.2 million against Just in Time Tickets Inc. and Kohanian, $16 million against Concert Specials Inc. and Steven Ebrani, and $4.4 million against Cartisim Corp. and Simon Ebrani. However, owing to their inability to pay those amounts, the DOJ and FTC allowed suspension of a portion of such civil penalties if the defendants satisfy certain terms, the announcement states.

However, the companies were released from paying the full penalties if they agreed to pay amounts ranging from $1.64 million to $499,000 and to satisfy certain additional terms, including not using ticket bots or other computer programs to defeat access controls, from concealing the IP addresses of computers they use to make ticket purchases, and from purchasing tickets from any credit or debit account in the name of anyone other than the defendants or their corporate officers and employees. The defendants must also maintain records and provide compliance reports to the government.