Internet Sales: Undercover Purchases on eBay and Craigslist Reveal a Market for Sensitive and Stolen U.S. Military Items
Published: 2008-04-10T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Unauthorized individuals, companies, terrorist organizations, and other countries continue their attempts to obtain sensitive items related to the defense of the United States. The Internet is one place that defense-related items can be purchased, raising the possibility that some sensitive items are available to those who can afford them. In addition to the risk that sensitive defense-related items could be used to directly harm U.S. service members or allies on the battlefield, these items could be disassembled and analyzed (i.e., reverse engineered) to develop countermeasures or equivalent technology. Given the risks posed by the sale of sensitive defense-related items to the public, and the Internet's international reach and high volume of commerce, the Subcommittee asked GAO to conduct undercover testing to determine whether the general public can easily purchase these items on the Internet, including on the Web sites eBay and Craigslist. To perform this work, GAO investigators used undercover identities to pose as members of the general public, meaning that they conducted their work with names, credit cards, and contact information that could not be traced to GAO. Investigators interviewed sellers where possible and referred cases to the appropriate law enforcement entities for further investigation.
section_title: What GAO Found
paragraphs: GAO found numerous defense-related items for sale to the highest bidder on eBay and Craigslist. A review of policies and procedures for these Web sites determined that there are few safeguards to prevent the sale of sensitive and stolen defense-related items using the sites. During the period of investigation, GAO undercover investigators purchased a dozen sensitive items on eBay and Craigslist to demonstrate how easy it was to obtain them. Many of these items were stolen from the U.S. military. According to the Department of Defense (DOD), it considers the sensitive items GAO purchased to be on the U.S. Munitions List, meaning that there are restrictions on their overseas sales. However, if investigators had been members of the general public, there is a risk that they could have illegally resold these items to an international broker or transferred them overseas. GAO investigators also identified examples of U.S. government property that was stolen and sold for a profit rather than being utilized by DOD. For example, GAO found two civilian store owners who acted as conduits for defense-related property that was likely stolen from the military. The store owners told GAO they purchased gear from service members--including Kevlar vests, flak jackets, and gas masks--and sold it through eBay to the general public. GAO also purchased stolen military meals, ready-to-eat (MRE) and found a robust market for stolen military MREs on eBay and Craigslist. Advertisements for the sensitive defense-related items GAO purchased were not removed by Web site administrators, allowing investigators to buy the items. Both Web sites maintain lists of items that are prohibited from sale, including stolen items, but only eBay contains warnings related to overseas sales and the improper sale of sensitive defense-related items.

section_title: Letter
paragraphs: Unauthorized individuals, companies, organizations, and other countries  continue their attempts to obtain sensitive items related to the defense of  the United States. For example, a 2003 undercover investigation by  Immigrations and Customs Enforcement (ICE) revealed that an individual  in Florida attempted to purchase and illegally export roughly $750,000  worth of U.S. F-14 fighter jet components to the Iranian military.  According to the indictment, the individual planned to ship these  components through other countries, including Italy, to conceal Iran as the  ultimate destination. As we have reported before, Iran’s acquisition of F-14  components could threaten national security. In another example, ICE  agents arrested a Columbian national in 2005 for attempting to illegally  export 80 AK-47 assault rifles, an M-60 machine gun, and an M-16 machine  gun to the Autodefensas Unidas de Colombia, a U.S.-designated terrorist  organization.
Although it is not illegal to buy and sell some defense-related items  domestically, many sensitive items are manufactured strictly for military  purposes and were never meant to be a part of everyday American life.  The Department of Defense (DOD) assigns demilitarization codes (demil  codes) to some items so that, when they are no longer needed by the  military, the items can be recognized and rendered useless for their  intended purpose prior to leaving government control. We are defining  sensitive defense-related items as those items that, if acquired by DOD,  would have to be demilitarized before disposal—a process that could  involve everything from removing a sensitive component to destroying the  item entirely. Our prior reports found that control breakdowns at DOD  allowed members of the general public to acquire sensitive defense-related  items, including F-14 components, from the Government Liquidation Web  site; these items had not been demilitarized properly. Although DOD has  made improvements in the management of its excess property system,  saving millions of dollars and reducing the likelihood that sensitive items  are improperly sold, concerns remain that members of the general public  can acquire sensitive defense-related items through additional weaknesses  involving the government’s acquisition, use, storage, and sale of these  items.
The Internet is one place that defense-related items can be purchased,  raising the possibility that some sensitive items are available to those who  can afford them. In addition to the Government Liquidation Web site,  many military surplus stores across the United States have Web pages with  online ordering capability. Furthermore, Web sites such as eBay and  Craigslist are popular because they allow sellers to advertise individual  items and appear to provide some element of anonymity. For the most  part, these Web sites have an international reach—meaning that it is  possible for sellers to identify buyers in foreign countries and quickly  export purchased items. Sellers use eBay to auction goods or services,  receive bids from prospective buyers, and finalize a sale. eBay also  features “store fronts” in which property is listed and bought without  going through a bidding process. In contrast, Craigslist functions as an  automated version of the newspaper classifieds, listing jobs, housing,  goods, services, personals, activities, advice, and just about anything users  wish to sell, advertise, or promote. The service is community-based and  moderated, operating in 450 cities worldwide, and is largely free of charge.
While potential buyers for some sensitive items certainly include  hobbyists, military enthusiasts, and emergency response or law  enforcement units, the ICE cases clearly show the real risk that illegal  weapons brokers, terrorists, and unauthorized agents of foreign  governments also number among potential buyers. In addition to the risk  that sensitive defense-related items could be used directly against U.S.  interests, some items could be disassembled and analyzed to determine  how they work. This technique, known as reverse engineering, could allow  the creation of (1) countermeasures to defeat or minimize the military  significance of the item or (2) the development of an equivalent item that  could be used against U.S. interests.
Given the risks posed by the sale of sensitive defense-related items to the  public, and the Internet’s international reach and high volume of  commerce, you asked us to conduct undercover testing to determine  whether the general public can easily purchase these items on the Internet,  including on the Web sites eBay and Craigslist.
To perform this investigation, we searched for certain target items on eBay  and Craigslist. When these items were identified, investigators attempted  to purchase them—either through bidding or a direct purchase (eBay) or  by contacting the seller and arranging an in-person meeting or sale via U.S.  mail (Craigslist). Investigators used undercover identities to pose as  members of the general public when purchasing these items, meaning that  they conducted their work with names, credit cards, and contact  information that could not be traced back to GAO. In the case of eBay  purchases, investigators worked with eBay’s Fraud Investigations Team to  obtain information regarding the identity and account history of the  sellers. We also searched the DOD Employee Interactive Data System  (DEIDS) database to determine whether sellers were active members of  the U.S. military. Where applicable and feasible, investigators interviewed  the sellers and performed additional follow-up investigative work or, in  some instances, made immediate referrals of the cases to field agents of  the appropriate law enforcement entities.
After purchasing a questionable item, our investigators matched the  National Stock Number (NSN) on the item to those listed in DOD’s Federal  Logistics System (FedLog) to validate that it met our definition of a  sensitive defense-related item. We also spoke with officials from the  Defense Criminal Investigative Service (DCIS), Demilitarization Coding  Management Office (DCMO), the Air Force Office of Special Investigations  (Air Force OSI), and the Army Criminal Investigation Division (Army CID)  regarding the sale of U.S. military property. We referred pertinent  information to DCIS, Army CID, and Air Force OSI for further  investigation. We also spoke with officials from eBay and Craigslist about  the policies and procedures governing commerce on their Web sites and  performed legal research.
We conducted our investigation from January 2007 through March 2008 in  accordance with quality standards for investigations as set forth by the  President’s Council on Integrity and Efficiency. It is important to note that  our investigation does not represent a comprehensive assessment of all  sensitive defense-related items sold through these Web sites during this  period. Rather, our report provides only a “snapshot” of some items that  investigators identified and purchased. Further, we did not attempt to  perform a comprehensive audit or analysis to determine whether systemic  property-management problems at DOD ultimately resulted in the sale of  these items on the Internet during this period. As a result, our investigation  of sellers was limited, in most cases, to their claims regarding how they  obtained the items. We also did not test the government’s enforcement of  export controls by attempting to transfer what we purchased overseas, or  validate whether eBay and Craigslist sellers we identified actually  exported items to other countries.
subsections: section_title: Background
paragraphs: DOD assigns demil codes to all military property to identify their required  disposition when no longer needed. Demil codes are contained in the  Defense Demilitarization Manual, which implements DOD policy to apply  appropriate controls and prevent improper use or release of these items  outside of DOD. Demil codes indicate whether property is available for  public use without restriction or whether specific restrictions apply, such  as removal of classified components, destruction, or trade security  controls. For example, if an item is designated as demil D, DOD requires  this item to be totally destroyed “so as to preclude restoration or repair to  a usable condition” rather than allowing a member of the general public to  purchase the item.
According to DOD’s Defense Logistics Information Service, it considers  sensitive defense-related items to be U.S. Munitions List items. This list,  which is maintained by the State Department, identifies defense-related  items that require government approval prior to export or temporary  import. There are 20 categories of items on the U.S. Munitions List,  including firearms and ammunition; aircraft and associated components;  protective personnel equipment (such as body armor); nuclear weapons  and related items; and directed energy weapons. Some of these items are  also defined as significant military equipment, which are items for which  special export controls are warranted because of their capacity for  substantial military utility or capability. Any person or company in the  United States that engages in either manufacturing or exporting U.S.  Munitions List items must register with the State Department. Prior to  exporting these items, a State Department-issued license is generally  required.
The table below defines the DOD demil codes, their associated designation  as U.S. Munitions List items or Significant Military equipment, and DOD’s  approach to disposing of the item under each code.
Despite the use of demil codes and other safeguards, our prior reports  show that DOD faces significant challenges in properly disposing of  sensitive military property. For example, in our May 2005 report on excess  property, we found that some sensitive defense-related items in the DOD  excess property system were lost, stolen, or damaged before DOD could  decide what to do with them. Losses included nearly 150 chemical and  biological protective suits, over 70 units of body armor, and 5 guided  missile warheads. Because 43 percent of the reported losses involved  military and commercial technology requiring demilitarization, we  reported that these losses posed a security risk. In follow-up work  reported in July 2006, we found that the Government Liquidation Web site  sold over 2,500 sensitive-defense related items to nearly 80 individuals  between November 2005 and June 2006. We also reported that our  undercover investigators purchased items from the Government  Liquidation Web site that should not have been sold to the public,  including SAPIs (which were in demand by U.S. service members in Iraq  and Afghanistan); a time-selector unit used to ensure the accuracy of  computer-based equipment, such as global positioning systems and  system-level clocks; digital microcircuits used in F-14 fighter aircraft; and  numerous other items. In our most recent July 2007 report, we found that  DOD has made significant improvements in preventing the sale of sensitive  defense-related items through the Government Liquidation Web site.  Throughout our investigation, we detected items that were potentially  sensitive, but DOD or Web site employees regularly identified the same  property items and removed them from the site before they were sold.
In addition to the improper sale of sensitive defense-related items, we have  also reported that the sale of demil code A and other nonsensitive military  items can result in waste and reduces the efficiency of DOD operations.  For example, in our May 2005 report, we found that DOD sold new and  unused items to the general public for pennies on the dollar through the  Government Liquidation Web site at the same time other DOD agencies  requested these items. Rather than allocate its resources effectively, DOD  simply paid the full acquisition cost again to purchase the same new and  unused items. We determined that, from fiscal years 2002 through 2004,  $3.5 billion in new, unused, and excellent condition items were being  transferred or donated outside of DOD, sold on the Internet for pennies on  the dollar, or destroyed rather than being reutilized. DOD has made  progress in this area, with improved utilization of property resulting in  millions of dollars in recent savings. Another area involving waste where  we have performed investigative work involves the sale of military MREs.  Although military MREs are nonsensitive items and are not on the U.S.  Munitions List, we have identified civilians and service members selling  military MREs on eBay for commercial gain. We concluded that military  MREs are procured by government entities using taxpayer dollars, and  consequently, if they are sold to the general public on eBay, they are  clearly not reaching their intended recipients.
section_title: Sensitive and Stolen Defense-Related Items Available on the Internet to the Highest Bidder
paragraphs: We found numerous defense-related items for sale to the highest bidder on  eBay and Craigslist from January 2007 through March 2008. Undercover  investigators purchased a dozen sensitive items to demonstrate how easy  it was to obtain them. The items were shipped to us “no questions asked.”  Many of these items were stolen from the U.S. military. According to DOD,  it considers the sensitive items we purchased to be on the U.S. Munitions  List, meaning that there are restrictions on their overseas sales. However,  if investigators had been members of the general public, there is a risk that  they could have illegally resold these items to an international broker or  transferred them overseas. Some items we purchased were assigned demil  code D, meaning that, if the items were in DOD’s possession, the item  should be destroyed rather than made available to members of the general  public. Our investigators also identified examples of U.S. government  property—both sensitive and nonsensitive items—being stolen and sold  for personal profit rather than being utilized by DOD (i.e., conversion of  government property). In addition to being cases of probable theft, these  examples represent a waste of resources because DOD is effectively  purchasing items that are subsequently not used for their intended  purpose.
While some sellers were active-duty members of the military, other sellers  included retired or reserve status military members and civilians. Our  investigation of the sellers found that they obtained the sensitive defense- related items in various ways, though in many cases theft from DOD was  involved. According to DOD officials, U.S. military personnel are not  authorized to sell certain items that have been issued to them, such as  body armor; doing so is considered theft of government property.  Moreover, if a civilian (such a surplus store owner) receives military  property that they know has been stolen from the government, they are in  violation of the law. See figure 1 for a photograph of the defense-related  items we purchased from eBay and Craigslist sellers during our  investigation.
The sale of sensitive defense-related items over the Internet can have  serious consequences, both abroad and here in the United States. In  addition to the threat that sensitive items could be used directly against  U.S. troops or allies, criminals could take advantage of some sensitive  items to commit domestic crime. Sensitive defense-related items could  also be reverse-engineered to develop countermeasures or equivalent  technologies.
subsections: section_title: Sensitive and Stolen Defense-Related Items Purchased on the Internet
paragraphs: Our investigators purchased a dozen sensitive defense-related items from  Internet sellers during the period of our review. According to DOD, these  items are on the U.S. Munitions List, meaning that there are restrictions on  their overseas sales. Table 2 summarizes the majority of the items we  purchased, followed by detailed case-study narratives.
In addition to the items in the above table, we also purchased other items  including an F-14 radio receiver and a body armor vest with SAPI plate.  According to DOD, these are U.S. Munitions List items. We also purchased  nonsensitive defense-related items such as boots, berets, patches, and an  ACU chest rig.
subsections: section_title: Case 1: F-14 Antenna
paragraphs: On October 10, 2007, we purchased a new antenna for the F-14 Tomcat  from an eBay seller located in Loveland, Colorado. The seller lives about  60 miles from Buckley Air Force Base in Colorado. The antenna has a  demil code of D, which requires DOD to destroy it when no longer needed.  Our past work identified the control of excess F-14 components as a major  challenge for DOD. The only country with operational F-14s, Iran, is  known to be seeking such components. We interviewed the seller, who  told us that he sells industrial electronic surplus items. He said he  purchases these items from individuals, Internet sales sites, other eBay  sellers, manufacturers, and occasionally the Government Liquidation Web  site. The seller told us that he obtained this antenna from an individual  located in the Denver, Colorado, area, whose name and address he could  not remember. We were unable to determine how this part became  available to the general public. We referred the seller to DCIS for criminal  investigation. See figure 2 for a picture of the antenna.
On September 19, 2007, we purchased a used flush-mount antenna, which  is currently in use by the military in the Blackhawk, Apache, and Chinook  helicopters, from an eBay seller located in The Colony, Texas. This city is  located about 130 miles from Sheppard Air Force Base. The antenna is  assigned demil code D, which requires DOD to destroy it when no longer  needed. Chinook components are reportedly in demand by Iran, making  this a national security issue. We interviewed the seller, who told us that  he buys aircraft components from auctions and companies that are going  out of business (not from Government Liquidation). He explained that he  targets specific aircraft components that can be used in both military and  commercial aircraft because he can better market these items to  collectors. For example, he said that if he buys a Boeing 707 part he will  resell it and advertise the part as belonging to a KC-135 Stratotanker (a  midair refueling aircraft) because it would better pique the interest of a  collector. According to eBay records, winning eBay bidders for other  auctions held by this seller were located in Cyprus, the Czech Republic,  Malaysia, and Slovenia. The seller said he did not recall the sale of this  particular part, and it is unclear how it became available to the general  public. We referred the seller to DCIS for criminal investigation.
section_title: Cases 3 and 4: Night Vision Equipment
paragraphs: We obtained both milspec night vision goggles and IR tabs on the Internet.  Although night vision goggles are commercially available to the public, the  milspec tube in the goggles we purchased is a sensitive component that  allows U.S. service members on the battlefield to identify friendly fighters  wearing infrared (IR) tabs. These tabs are known as an IFF (identification  friend or foe) element and can be detected at night by both ground troops  and airborne combat pilots equipped with night vision equipment.  Obtaining either of these two items could give enemies an undue  advantage in night combat situations, either by using the night vision  goggles to detect U.S. troops or by posing as U.S. troops (or friendly  forces) with the IR tabs. We purchased these items directly from  distributors who could sell these products domestically without violating  any laws. However, officials representing the manufacturer of the night  vision goggles told us that the goggles should not be sold on eBay and that,  consequently, a violation of its distribution policies had occurred at some  point in the distribution process. Officials told us they would conduct an  investigation into where the violation of policy occurred and would  remove the offending distributor from its list of authorized distributors.
Case #3: Night Vision Goggles. On March 29, 2007, we purchased  new/unused milspec night vision goggles from an eBay seller located in  Tequesta, Florida. The fully operational goggles have a demilitarization  code of F, meaning that, if the goggles are part of DOD inventory, they  cannot be sold to the general public unless the milspec image intensifier  tube has been removed. The image intensifier tube was included in the  goggles we purchased. See figure 3 for a picture of the night vision  goggles.
Our investigators determined that the seller is a retired U.S. Marine Corps  Colonel. The seller is the manager of business development for a General  Services Administration scheduled business that distributes tactical,  surveillance, and force protection equipment. According to the retired  Colonel, he originally obtained 28 night vision goggles from an authorized  distributor and sold most of them to active-duty military units, the U.S.  Fish and Wildlife Service, U.S. Department of Homeland Security, U.S.  Bureau of Land Management, and a number of municipal and state law  enforcement agencies. The retired Colonel told us that, when he was  unable to sell all 28 goggles, he used his personal eBay account to sell the  remaining goggles to 10 individuals across the United States. He  represented to us that he asked all potential clients for the goggles  whether they were U.S. citizens as part of the eBay sales process.  However, he did not ask our undercover investigator this question. Based  on interviews with the goggle manufacturer and our legal research, we  determined that the seller did not violate the law by selling these goggles  domestically to members of the general public. However, it does appear  the sale and distribution of these goggles violated the manufacturer’s  policy. Officials representing the goggle manufacturer told us they would  conduct an investigation into where the violation of policy occurred and  would remove the offending distributor from its list of authorized  distributors. We referred this matter to DCIS for investigation.
Case #4: IR tabs. We purchased new/unused IR tabs from an Internet  store front (not eBay or Craigslist) maintained by a business owner in  Marlboro, New York. We were alerted to this seller through his eBay  advertisements and located the associated online store front. An enemy  fighter wearing these IR tabs could pass as a friendly service member  during a night combat situation, putting U.S. troops at risk. Prior to this  purchase, our investigators had visited the physical store location, which  is near the U.S. Military Academy at West Point. The physical store sells a  variety of military items ranging from parachute cords to military patches.  Our investigators identified themselves as GAO investigators and asked  the store owner, a former Army Captain, whether he sells IR tabs to the  general public. The store owner stated that he only sells the tabs to U.S.  military personnel and that he always obtains proof of employment before  completing an order. Several days after the interview, our investigator  ordered and received several tabs from the seller’s online store front. The  validity of the order was never questioned, and the owner did not attempt  to verify the employment of our investigator, as he stated during the  interview. According to the manufacturer, these tabs have the same  properties as the IR tabs affixed to ACUs and are a comparable product.  Our own in-house tests confirmed that the tabs had IR properties and  appeared to function the same way. We referred this matter to DCIS for  investigation.
section_title: Case 5: ACU and Accessories
paragraphs: During the course of this investigation, we purchased all the items  necessary to build a complete, current U.S. military uniform—from boots  to beret—using only the Internet Web sites eBay and Craigslist. Our intent  was to demonstrate that the general public can purchase, over the  Internet, all the gear necessary to dress and look like a U.S. service  member. DOD has recognized the security risk associated with a member  of the general public being able to acquire a full uniform. In January 2007,  Iraqi insurgents dressed in U.S. military uniforms were allowed to pass  through a police checkpoint in Karbala, Iraq. They subsequently broke into  a secure compound using percussion bombs and killed five U.S. service  members. After this incident, DOD issued a Demil Bulletin noting that  ACUs “…will only be released to Army, Navy, Air Force, Marines and their  Guard or Reserve components.”
On April 17, 2007—after the Demil Bulletin had been issued by DOD—we  purchased a new/unused ACU with IR tabs from an eBay seller located in  Fayetteville, North Carolina. As discussed above, IR tabs allow U.S.  service members to identify friendly fighters during night combat. In  addition to the risk that an enemy could pose as a U.S. service member in  this ACU, the readily available IR tabs would also allow an enemy fighter  to pose as a friendly fighter during night combat. The DOD-issued IR tabs  are demil code D, which requires DOD to destroy them when no longer  needed. According to the Defense Logistics Agency, the ACU that we  purchased from this seller is ineligible for resale or release to the general  public. The seller told us that he purchased the ACU at a flea market near  Fort Bragg, North Carolina, and added that, on many occasions, he has  observed flea market vendors purchasing military items from individuals  who arrive at the flea market. The vendors then sell the items to the  general public at the flea market. After concluding the interview, our  investigators visited the flea market and observed several vendors selling  used ACUs (none contained IR tabs). The flea market vendors told our  undercover investigators that they obtain the ACUs at yard sales in the  area and from soldiers. This ACU appears to have been stolen from DOD.  We referred this matter to DCIS for criminal investigation. See figure 4 for  a picture of the ACU.
On April 21, 2007, we purchased a used Kevlar helmet from a civilian eBay  seller located in Bloomingdale, Illinois. Even though the eBay seller’s ad  indicated that the helmet could not be exported, our investigation of his  eBay history indicated that buyers in countries such as Costa Rica, the  Czech Republic, Hungary, and Thailand had won eBay auctions for the  helmets. When we interviewed the seller, he told us that he had never  shipped Kevlar helmets overseas and he canceled sales when overseas  buyers won these auctions. He said he originally obtained the helmets  from the Government Liquidation Web site, which required him to sign an  end use certificate stating, among other things, that the helmets would not  be exported without a license from the State Department. Further review  of the seller’s eBay records reveals that he had completed auctions for  $21,000 worth of Kevlar helmets from February 2007 to July 2007. We  referred this matter to DCIS for criminal investigation.
section_title: Case 7: Nuclear Biological Chemical Gear
paragraphs: On August 23, 2007, we purchased a used Nuclear Biological Chemical  (NBC) protective suit, used gas mask, used gloves and boots, and unused  chemical-biological canister (containing the gas mask filter that is used to  protect against chemical and biological warfare agents) from a Craigslist  seller located in Oxnard, California. Although the NBC suit was removed  from packaging and therefore not usable to protect against an attack,  according to a DOD Product Specialist with whom we spoke, the NBC suit  is susceptible to reverse engineering and should not be sold to the public.  The Craigslist advertisement stated that the seller was a former member of  the military and that he was selling the gear because he needed money.  When we interviewed the seller, he claimed that, despite what he wrote in  the Craigslist advertisement, the gear was not his. He said that he left the  Marines in 2002 and that the suit was given to him by an acquaintance who  was also a Marine. Upon further questioning about the origin of the gear,  the seller stated that (1) he did not remember his acquaintance’s first  name; (2) his acquaintance had not been issued the gear either, obtaining  it at what he called a “swap meet” and; (3) his acquaintance had recently  died in a motorcycle accident. This property was likely stolen from DOD.  We referred this matter to DCIS for criminal investigation. See figure 5 for  a picture of the NBC gear (worn by a GAO investigator).
Our May 2005 and July 2006 work identified two types of body armor that  DOD’s excess property system did not manage adequately—body armor  vests and SAPIs. SAPIs are ceramic plates designed to slide into pockets  sewn into the front and back of body armor vests in order to protect the  warfighter’s chest and back from small arms fire. They are currently used  by service members in Iraq and Afghanistan. According to DCIS, service  members are not authorized to sell body armor vests or SAPIs, and selling  these items is considered theft of government property. Moreover, body  armor vests and SAPIs are designated demil code D, meaning that DOD  should destroy them when no longer needed. We purchased three body  armor vests and seven SAPIs, including two current-issue E-SAPIs, on  eBay and Craigslist. Because service members are not authorized to sell  these items, we concluded that they were stolen from the military. See  figure 6 for a picture of some of the stolen SAPIs and body armor vests we  purchased.
The availability of body armor and SAPIs to the general public has both  national security and domestic safety implications. Regarding national  security, reverse engineering could allow the creation of equivalent  technology or the discovery of countermeasures based on potential  weaknesses in the armor. On the domestic front, it is prohibited for violent  felons to purchase, own, or possess body armor. Although sellers do not  have a responsibility to determine whether they are selling body armor to  a violent felon, and it is not illegal to do so, the wide availability of body  armor online makes it easier for violent felons to break the law by  obtaining body armor. The following case studies describe three of the  four investigations we conducted into body armor we purchased online.
Case #8: E-SAPI. On September 13, 2007, we purchased two new/unused  body armor inserts identified as E-SAPIs from an eBay seller located in  Arlington, Texas. This city is about 120 miles from Sheppard Air Force  Base. The E-SAPI plates were manufactured in June 2007 and are currently  used by U.S. service members in Iraq and Afghanistan. We determined  that, from September 2006 to February 2008, the seller, who did not appear  to be affiliated with the U.S. military, had completed eBay auctions of over  600 body-armor-related items totaling approximately $60,000. Much of the  body armor appears to have been stolen from the military. In addition to  domestic sales in the United States, the seller’s eBay history indicates that  the highest bidders on auctions for other body armor items were located  overseas in such countries as China (Hong Kong), Poland, Taiwan, and  Thailand. We referred this matter to DCIS for criminal investigation  Case #9: Body Armor and SAPIs. On September 22, 2007, we purchased  a used body armor vest and two SAPIs from a Craigslist seller located in  Fayetteville, North Carolina. Our investigation determined that the seller is  an active-duty Staff Sergeant in the U.S. Army stationed at Fort Bragg. We  interviewed the Staff Sergeant about the purchase. He claimed that he  purchased the body armor at a garage sale while he was stationed at Fort  Stewart, Georgia. He could not recall the specific location of the sale or  the name of the seller and said that he paid cash. He stated that he thought  it was “OK” to sell body armor on Craigslist because he had seen other  advertisements for it. This is another case of theft of government property,  which we referred to DCIS for criminal investigation.
Case #10: Body Armor and SAPIs. On March 30, 2007, we purchased a  used body armor vest and two SAPIs from an eBay seller located in Minot,  North Dakota. The seller lives near Minot Air Force Base. Our  investigation determined that the seller was a Senior Airman with the Air  Force Reserve. Further, we determined that the individual had completed  eBay auctions for 18 body armor vests and SAPIs from June 2006 to April  2007 for a total of over $3,300. According to eBay records, an individual in  Japan was the highest bidder in one of the auction rounds. After we  referred this matter to Air Force OSI, we learned that the Minot Air Force  Base security police and the county sheriff’s office had investigated the  matter and determined that the body armor was stolen from the base.  According to Air Force OSI, this individual knew that the items were  government property when he sold them on eBay.
section_title: Other Defense-Related Items
paragraphs: Our investigators also identified examples of U.S. government property— both sensitive and nonsensitive—that was likely stolen and sold for  personal profit rather than being utilized by DOD (i.e., conversion of  government property). In addition to being cases of probable theft, these  examples represent a waste of resources because DOD is effectively  purchasing items that are subsequently not used for their intended  purpose.
subsections: section_title: Civilian Sellers of Stolen Property
paragraphs: We identified two civilian sellers with eBay store fronts who bought  defense-related items from service members and sold these items to the  general public on eBay. These items could have been stolen from the  military. If these sellers knew the property they bought from the service  members was stolen, they too would be violating the law.
Gun-Store Owner. This eBay seller owns a gun store in Barstow,  California. He lists U.S. military items on his eBay store front, including  sensitive defense-related items such as Kevlar helmets and NBC gear.  When we asked the seller to identify the source of the items listed on his  eBay store front, he told us that military personnel frequently arrive at his  shop with the items for sale. He gave us a record of the military items he  had purchased from military personnel. For each sale, the gun-store owner  obtained the signature of the seller and photocopied their identification  card—in some cases, sellers provided him with their military IDs. We  cross-matched the names of the individuals who sold items to the gun- store owner with the DEIDS database to determine whether any of the  sellers were currently serving in the military. Table 5 contains details  about selected service members who sold items to the gun-store owner  and the nature of the items.
We investigated this seller in 2005 in our report related to stolen MREs  sold over eBay and referred him to the DOD Inspector General (IG) for  review and criminal investigation. We have not received specific  information from the DOD IG regarding their actions on this referral. We  continue to believe this matter requires investigation and have made an  additional referral to Army CID for criminal investigation.
Military Surplus Store Owner. This eBay seller owns a military surplus  store in Abilene, Texas. Our investigators visited the physical store  location associated with the eBay store and observed a number of new  ACUs with IR tabs affixed to them. As discussed above, IR tabs are an IFF  element that can be detected at night by both ground troops and airborne  combat pilots equipped with night vision equipment and represent one  part of the military’s night-fighting system. IR tabs on ACUs are demil code  D. When our investigators pointed this out to the store owner, he said he  was unaware of the restriction and removed the ACUs from the sales rack.  The store owner said he purchased the ACUs from service members. He  added that many of the items in his store were acquired from local military  personnel who arrive, unannounced, at his shop with items for sale. He  said that he maintains a record of transactions and provided a copy to our  investigators. We cross-matched information on these individuals with the  DEIDS database to determine whether any of the sellers were currently  serving in the military. Table 4 contains details about selected service  members who sold items to the store owner and the nature of the items.
We referred this matter to Air Force OSI for criminal investigation.
Military MREs are designed to sustain an individual engaged in strenuous  activity, such as military training or actual military operations, when  normal food service facilities are not available. In general, military MREs  are boxed in cases of 12. Each MRE contains a full meal packet in a  flexible bag. The cases and bags for military MREs are marked with the  words “U.S. Government Property, Commercial Resale Is Unlawful.”  Although we do not consider MREs to be sensitive property, military  MREs are procured by government entities using taxpayer dollars and are  intended to be consumed by individuals from authorized organizations and  activities. Consequently, if military MREs are sold to the general public on  the Internet, they are clearly not reaching their intended recipients and  represent a waste of taxpayer dollars. Since service members are not  authorized to take MREs and sell them for personal gain, the vast majority  of the military MREs for sale on the Internet represent stolen military  property.
During our investigation, we purchased numerous cases of MREs from  eBay and Craigslist sellers. The sellers were mostly civilians. Three  examples of our investigative work related to military MREs follows:    One civilian seller in Louisiana indicated that she has been selling  military MREs on eBay for a number of years. She said that she  acquires the MREs from service members assigned to a nearby military  base, and that they arrive at her home unannounced. She added that  most of the service members have 2 or 3 MRE cases but that others  have had as many as 10 to 12 cases. She told us that she does not know  any of the service members or where they get the MREs, but suggested  they are “left over” from field exercises. She said that she usually pays  service members about $20 per case in cash and that she can sell the  cases on eBay for about $55 per case. We reviewed eBay records and  learned that, from September 2006 through February 2008, she  completed eBay auctions totaling about $55,000 for MREs. These MREs  were likely stolen from the nearby military base. We referred this case  to Army CID for criminal investigation.
A second seller living in Phenix City, Alabama, is employed as a civilian  aircraft mechanic at Fort Benning, Georgia. She told us that she obtains  military MREs from dumpsters at Fort Benning. She stated that she  visits the dumpsters several times a week, removing unopened MREs  from the dumpsters and cleaning, packaging, and mailing them to her  eBay customers. According to sales data provided by eBay, from July  30, 2006, to February 6, 2008, this individual had completed  approximately $54,000 in MRE auctions. Because of the volume of sales  activity we referred this case to Army CID for criminal investigation.
A third seller was a Private First Class in the U.S. Army stationed in  Camp Casey, South Korea. Based on our referral, Army CID executed a  search warrant at the seller’s residence and discovered a substantial  amount of stolen U.S. military property, as well as nearly $2,000 in  cash. According to Army officials, the seller was charged with drug  possession and use in the summer of 2006. He was demoted and placed  in a supply clerk position in charge of MRE inventories while awaiting  discharge from the military, which gave him the opportunity to steal  MREs and sell them over eBay. Army CID linked the seller to a series of  unsolved larcenies on base. The seller was sentenced to over 3 years in  prison.
section_title: eBay and Craigslist Have Few Safeguards to Prevent the Sale of Stolen and Sensitive U.S. Military Items
paragraphs: Advertisements for the sensitive defense-related items we purchased were  not removed by eBay and Craigslist Web site administrators, allowing us to  complete the transactions. Both Web sites maintain published lists of  items that are prohibited from sale, including stolen items, but only eBay  contains warnings related to sensitive defense-related or export-controlled  items even though both Web sites have an international reach. eBay  employs administrative staff and investigative teams intended to deter  fraud and prohibited sales from occurring on the site. Meanwhile,  Craigslist has a smaller staff and largely relies on its user community for  identifying inappropriate advertisements or postings. Officials with both  Web sites told us they cooperate with law enforcement agencies to stop  the sale of illegal, counterfeit, or stolen items, and identify and deter  individuals from using these Internet services for a fraudulent or improper  purpose. Generally, neither eBay nor Craigslist can incur criminal liability  for being the conduit through which stolen or export-controlled items are  sold, even if the items are sold overseas. Because the Web sites never take  possession of the goods, do not set the price of transactions, and do not  actually deliver the items, no relevant federal criminal statute applies to  their activities. Table 5 summarizes the policies, proactive enforcement  efforts, and penalties that each of these Internet companies maintain to  deter the sale of prohibited items.
Advertisements for the sensitive defense-related items we purchased were  not removed by eBay administrators, allowing us to complete the  transactions. According to its prohibited items list, eBay prohibits stolen  property from being sold. eBay also provides extensive information about  international trading on its prohibited items list, including a link to a  government Web site on export controls. There are no explicit references  to the sale of military MREs and other stolen military property on the  prohibited items list. However, eBay does discuss a prohibition on  defense-related items that have not been disposed in accordance with  DOD demilitarization policies. According to an eBay official with whom  we spoke, his company has created two teams that inspect user sales—the  Fraud Investigations Team and the Prohibited Items Team. The Fraud  Investigations Team deals directly with law enforcement organizations and  provides information on sales or seller activity. We received invaluable  assistance from the Fraud Investigations Team during our investigation.  The official stated that the Fraud Investigations Team also proactively  refers cases to relevant law enforcement agencies for further investigation  and prosecution. Meanwhile, the Prohibited Items Team has an automatic  filtering system to identify potentially prohibited sales and responds to  reports on prohibited activity. If the Prohibited Items Team discovers a  prohibited item, its mandate is to remove the advertisement for the item,  educate the seller, and suspend the seller’s account if the activity  continues. When we asked the eBay official about the sale of military body  armor on eBay, he admitted that it was a difficult issue for eBay because  some body armor can be sold legally. He said that the Fraud Investigations  Team does not scan eBay sales to try to identify what body armor is illegal  to sell, e.g., body armor that has been stolen from the military. Regarding  the sale of military MREs, the official stated that “nobody has indicated to  us that it’s illegal to sell MREs.” To penalize users who violate eBay  policies, eBay officials can cancel listings, limit account privileges,  eliminate users’ “Power Seller” status, and suspend accounts.
subsections: section_title: Craigslist
paragraphs: Advertisements for the sensitive defense-related items we purchased were  not removed by Craigslist administrators, allowing us to complete the  transactions. Craigslist policies and procedures prohibit the sale of stolen  property. However, its prohibited items list does not mention sensitive  defense-related items, export controls, or international trading despite the  fact that the Web site serves cities around the world. Further, there are no  explicit references to the sale of military MREs and other stolen military  property on the prohibited items list. Because these items are not included  on the list, Craigslist officials and users are unlikely to prohibit these sales.  Craigslist maintains a much smaller staff than eBay (25 people according  to its Web site). When we asked a Craigslist manager about whether his  company had a Fraud Investigations Team (FIT), he said, “I am the FIT for  Craigslist.” This official added that Craigslist relies primarily on its user  community to identify suspicious advertisements and report prohibited  item sales. We observed this in several cases during our investigation,  when questionable advertisements for weapons and other obviously  prohibited sales we identified were also apparently noticed by Craigslist  users, leading to removal of the items from the Web site. The Craigslist  official with whom we spoke indicated that Craigslist works with law  enforcement agencies but does not proactively call issues to their  attention. The official said that Craigslist deletes advertisements for  questionable items, such as body armor and night vision goggles, when  contacted by law enforcement. However, unlike eBay, Craigslist will not  provide seller information to a law enforcement agency without a  subpoena. To penalize users who do not comply with Craigslist policies,  company officials can delete the user’s account or otherwise attempt to  prevent the user from accessing the site.
section_title: Contacts and Staff Acknowledgments
paragraphs: For further information about this testimony, please contact Gregory D.  Kutz at (202) 512-6722 or kutzg@gao.gov. Major contributors to this  testimony include Mario Artesiano, Johana Ayers, Nabajyoti Barkakati,  Norman Burrell, Shafee Carnegie, Bruce Causseaux, Thomas Denomme,  Dennis Fauber, Richard Guthrie, Kenneth Hill, Jason Kelly, Barbara Lewis,  Andrew McIntosh, James Murphy, Gertrude Moreland, and Richard  Newbold.
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