Facebook sues alleged scammer over sex and Jennifer Lopez ads

A Brooklyn man is accused of scamming the social network out of $340,000 in advertising, and Facebook wants him banned for life

A forum posting, reproduced in a Facebook lawsuit, advertises a Facebook advertising account for sale

A forum posting, reproduced in a Facebook lawsuit, advertises a Facebook advertising account for sale

Facebook is suing a former advertiser on its site, claiming he ran multiple ad accounts to promote sexual content and used a simple trick to scam the social network out of US$340,000.

The lawsuit, filed this week, asks a federal court in San Francisco to ban Martin Grunin of Brooklyn, New York, from Facebook for life and to force him to pay back the money he allegedly owes.

According to the lawsuit, Grunin started placing ads on Facebook in early 2011 that "purported to offer casual dating services and included a picture of a woman with a sexually explicit and profane caption."

Grunin couldn't be reached for comment Friday.

The ads, which linked to sites that paid Grunin for the traffic he sent them, resulted in Facebook issuing a cease-and-desist letter that Grunin accepted, according to the complaint. But he continued to open new accounts and kept advertising.

A year later, in 2012, Grunin sold access to Facebook advertising accounts with large credit lines to which he had "procured access through unauthorized means," the complaint alleges.

In an online forum posting allegedly written by Grunin and reproduced in the lawsuit, he offers an account with a $30,000 daily spending limit affiliated with an animal charity fan page.

Later that year, the suit alleges, he began contacting Facebook's ad sales team from accounts that appeared to belong to legitimate advertising agencies in order to create new accounts.

One email used a domain name that appeared similar to a legitimate one -- a common tactic of scammers -- and Facebook was apparently duped by it. By the time it discovered the fraud, the accounts had run $40,000 of deceptive ads supposedly endorsed by celebrities Jennifer Lopez and Dr. Oz, Facebook says.

A similar scam began in February 2013 and opened accounts that ran $300,000 worth of ads before it was noticed.

The defendant appears to be the same Martin Grunin who attended St. Francis College in Brooklyn Heights. Last year, he was interviewed by the student newspaper and talked about trading more than $100,000 on financial markets in between doing school work, and chided other students for lacking ambition.

"I want to be a billionaire one day," he told the newspaper.

The article, which appears to have been taken offline but is still available through Google's cache, is accompanied by a picture of Grunin in a sports car.

He is also a prolific poster to YouTube, where he talks about stock trading schemes, and on the StockTwits message board.

On Thursday, in reply to a message on StockTwits that offers him support for "that FB thing," Grunin replied: "It's all baseless allegations."

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

Tags advertisingInternet-based applications and serviceslegalCivil lawsuitsinternetsocial mediaFacebook

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Martyn Williams

IDG News Service

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