CLICKING FOR CONTRABAND

The law can't catch up to the Internet, where any desire can be satisfied
for a price

The black market has never been more accessible.

Anyone with a computer and an Internet account can find all sorts of
contraband for sale on the Web: machine guns, marijuana, prescription
drugs, switchblade knives, endangered species, Cuban cigars and much more.

Although these goods are highly regulated or outright illegal in the United
States, they are available to Americans 24 hours a day on the Internet.

Of course, most of these goods are also available on street corners, and
some are even advertised in newspapers and magazines. But the Internet
makes it so much easier for everyone, even children. There is no need for
clandestine meetings with shady characters in dark alleys. All that's
needed is a PC, a credit card and a little patience.

It is also easy for Internet criminals to stay one step ahead of the law.
Their underworld is anonymous, borderless, fast-moving and nearly
impossible to track. Web outlaws move from site to site, change e-mail
addresses or switch online identities.

Most federal agencies say they lack the money, manpower or expertise to
pursue these black marketeers. When they do go after online criminals, they
target child pornographers or software pirates, not yuppies buying Cuban
cigars.

``We have neither the time nor the resources to surf the Internet,'' said
George Grotz, special agent for the Federal Bureau of Investigation in San
Francisco. ``The Internet is growing so rapidly and . . . the laws to
control technology lag behind that technology.''

Some online merchants sell their illegal wares on popular sites such as
Yahoo Auctions, Excite Classifieds or eBay, the nation's No. 1 online
auction house.

Others, more discreet, advertise on message boards or on their own Web sites.

Thomas Bellas Jr., a Chicago gun merchant, used the Internet to sell a 9mm
semiautomatic handgun and 50 rounds of ammunition for $460 to

a 17-year-old Alabama boy, who had posed as an adult by using his father's
driver's license number.

In what is believed to be the first arrest for an online gun sale, Bellas,
57, was charged last year with selling a handgun directly to an
out-of-state customer instead of transporting it to a registered gun
dealer, as required by law. He was also charged with selling a gun to a minor.

In court papers, Bellas said he sold at least 30 handguns over the Net
illegally, according to Jerry Singer, a spokesman in the Chicago office of
the U.S. Bureau of Alcohol, Tobacco and Firearms.

Bellas had indicated that he would plead guilty, Singer said. But in
January, before he entered a plea, Bellas died of a heart attack while
shoveling snow.

A Chronicle search turned up hundreds of illegal sites or sellers. Although
this story does not list Web site addresses, most of them can be found
using a search engine. Here is what we found:

GUNS

LOTS OF Them, on auctions, in online classifieds and on gun-sale Web sites.
Most of the gun trade is probably legal, but it often is hard to tell. The
laws are complicated and difficult to enforce on the Web.

Federal law requires a gun shipped across state lines to be sent to a
licensed firearms dealer. The law requires buyers of some types of
firearms, such as machine guns and sawed-off shotguns, to register the gun
and pay a tax.

Gun laws for Internet sales are the same as those for sales in stores or
through the mail. But enforcing them on the Web can be a long shot, because
buyers and sellers generally don't know each other and don't know if basic
facts such as age and address are correct. Making things more complicated,
California and several other states have special restrictions on gun sales,
such as a ban on machine guns and stiff regulations regarding assault weapons.

The ATF is investigating several trafficking cases, sources said, including
a ``significant'' operation with links to the West Coast that could break
this spring.

SWITCHBLADE KNIVES

U.S. Customs law prohibits anyone from bringing a switchblade knife into
this country. But they are advertised widely on the Web.

Switch Blade Knife Makers offers six different knives priced between $31
and $35. For would-be customers worried about the law and other
technicalities, there is a handy `Help'' section on the site, which reads
like this:

Q: My customs don't allow switchblades import. Can you ship to me anyway?

A: Yes we can ;-)

Until a few days ago, the sale of switchblades was so loosely policed on
eBay that a seller named ``Bladeguy'' advertised: ``Secret Agent Covert
Autoknives -- Banned by Feds!''

Bladeguy and his knives no longer show up on eBay. The San Jose online
auctioneer relies heavily on users to watch out for illegal goods. When
they are notified of illegal auctions, eBay shuts them down.

eBay also hired a team of former police officers to search for and remove
ads for contraband, said Steve Westly, vice president of marketing for the
company. He also noted that eBay recently decided to remove auctions for
guns and ammunition.

Many online knife merchants are based outside the United States and may not
be violating their own country's laws.

At the U.S. border, banned goods are the responsibility of Customs, one of
the few federal agencies that has an active cyber-crime unit. But the
agency's Cyber Smuggling Investigations Center concentrates less on
switchblades and more on high-profile crimes such as the import and export
of child pornography, pirated software and music, and illegal trade in U.S.
technology and munitions, said spokesman Claude Davenport.

MARIJUANA

IT Doesn't come cheaply, but pot and pot seeds, which are illegal to sell
or possess in this country, are openly for sale on Web.

``I see the Internet as a large medium that can help many people get their
Cannabis, even if it is forbidden in your own country,'' Leo Pafort, a
merchant based in Amsterdam, says on his Web site. Pot is legal in the
Netherlands.

Pafort's prices range from $10 to $15 a gram. He did not return e- mails
requesting information or an interview.

For those willing to grow their own, at least a half-dozen Web
entrepreneurs can supply seeds. One offers more than 100 varieties with
such names as ``Bazooka'' and ``Hypno'' and prices from $25 to $175 for
packets of 10 or 12 seeds.

None of the seed sellers contacted would discuss their businesses.

The makings of more-dangerous drugs are also available. Poppy seeds that
produce the narcotic opium and can be used to make heroin were openly
advertised on nearly 20 eBay auctions recently. Bids opened as low as $2
for packets of 1,000 seeds.

The Internet ``is something we're monitoring, and we're learning more and
more about it,'' said Terry Parham, a spokesman for the U.S. Drug
Enforcement Administration. ``It's unrealistic for us to take the time to
surf the Web just looking for certain (illegal) things.''

PRESCRIPTION DRUGS

Who needs a prescription? Not the intrepid Internet shopper. Sites are
selling the anti-anxiety drug Valium, antidepressant Prozac, impotence drug
Viagra and other controlled substances that cannot legally be dispensed
without a doctor's prescription.

``Never any prescription needed,'' says the Web site for one merchant,
Pharmacy International, which advertises itself as a U.S.-based exporter of
``lifestyle drugs.''

``Our company does not do any business in the USA,'' said Michael Beckers,
a Pharmacy International official responding to an e-mail from The Chronicle.

Yet the Florida company's Web site provides instructions for ordering
within the United States and details U.S. shipping and handling charges.

The U.S. Food and Drug Administration is ``concerned about the potential
for selling illegal, unapproved or counterfeit drugs on the Internet,''
said Dr. Randy Wykoff, associate commissioner for operations.

GAMBLING

ONLINe gaming is illegal under a 1961 federal law that bars interstate
gambling over telephone lines. Although that has deterred U.S. operators,
it has not stopped offshore companies from setting up global online casinos
in places like the Caribbean and Central America.

Law enforcement agencies, including the California attorney general's
office, concede that enforcement of the 1961 law is nearly impossible. Most
of the sites are offshore, where gambling is legal, and domestic bettors
would be difficult to pinpoint.

ENDANGERED SPECIES

U.S. law prohibits the sale or transfer of endangered species across state
lines. An international agreement signed by 146 countries bars the import
or export of hundreds of types of animals. Separate laws cover the sale of
eagles and migratory birds.

Even so, they are for sale on the Web. On one online bulletin board, a
Canadian advertises the sale of ``a small collection of Black Rhino
horns,'' which are prized for their medicinal properties.

Federal officials say that is against the law. Many nations including
Canada and the United States also ban the import or export of endangered
black rhinos, said Paul Chang, a senior special agent for the U.S.
Department of Fish and Wildlife. According to Chang, the horns could sell
for $40,000 apiece.

The seller, Calvin Kania, disagrees. ``We would not jeopardize our family
name or business in dealing in illegal items,'' he said in an e-mail.

He said he has the necessary permits to sell them. Chang said no such
permits exist.

Bob Snow, a federal Fish and Wildlife special agent in Northern California,
has been investigating illegal wildlife traffic on the Web and particularly
on auction giant eBay. Snow said he has found protected migratory birds and
endangered wildlife for sale on eBay. The auction site will soon include in
its guidelines a ban on selling endangered wildlife.

CUBAN CIGARS

On the Web, a good smoke is easy to find. Dozens of sellers advertise Cuban
cigars, which are illegal to import into the United States, but legal in
many other countries.

At least two Web sites devoted to the cigar trade offer Cuban varieties.
They also show up on Yahoo Auctions, Excite classifieds and eBay, where 17
Cuban cigar auctions were advertised recently.

``Legal concerns are not really present,'' said an eBay customer named
Randy, who has bought the cigars on the Net for some time.

Many sellers ship Cuban stogies via U.S. mail, disguising their return
address and the origin of the cigars.

``I ship them through the mail. Customs cannot open every box,'' said one
eBay seller.

One Midwestern cigar merchant has a roving Web site intended to keep him
safe from law enforcement. Every time he changes his Web address, he must
e-mail his customers. Why bother? Online profit margins are fatter than
what he can get on the street.

Davenport, the Customs agent, said his agency was not aware of illegal
cigar trade on the Web.

Even when law enforcers are aware of black market activity, it is not easy
to take action.

``This new world of Internet access presents problems that federal and
state investigators have not faced before,'' said Hilary McLean,
spokeswoman for California Attorney General Bill Lockyer. ``It's difficult
to track, because of the relative anonymity of online users. These sellers
can be anywhere in the world, and that requires a significant investment to
investigate.''

Resources are not the only issue. The government is also torn between
fighting crime on the Internet and letting it grow unfettered into a robust
free market.

``The Internet is a tremendous enabler. But with all the good, there comes
some bad activities, unfortunately,'' America Online CEO Steve Case said.

``It is the responsibility of the industry to self-police its behavior,''
Case said. ``The worst possible thing that could happen to the Net is too
much government regulation. That would derail growth and innovation.''

Politicians are largely unaware of the problem, and have proposed no
legislation to specifically curtail sales of illegal goods online.

When told that AK-47 rifles are for sale on the Web, U.S. Representative
Tom Campbell was taken aback. ``My first reaction is, `Where are the
law-enforcement agencies? It's terrible that existing laws can be bypassed
in such a widespread manner. I'm especially concerned about the sale of
automatic weapons.''

Although Campbell, R-Campbell, said he is hesitant to impose laws on the
Internet, ``we need to redirect resources for authorities to enforce
(existing) laws.''

Another problem with enforcement is that there is no single agency in
charge of online crime.

``We're aware there are all kinds of illegal things out there, but the
jurisdiction for particular items falls under the ATF (guns), DEA (drugs)
and others,'' said Paul Luehr, the Federal Trade Commission's assistant
director.

``A lot of cases are dropping to the ground because no one is in charge,''
said Norm Willox, CEO of the National Fraud Center in Horsham, Pa.
``Someone needs to centralize the (reporting) process.''

The government is taking a step in that direction.

Several federal agencies, including the FBI, are creating a national call
center for Internet crime, sources said. The center would field consumer
complaints, conduct a preliminary investigation and then notify the
appropriate state or national agency.

Until that is set up, consumers who want to report any type of illegal
activity online can contact the FTC at 202-FTC-HELP or fill out an online
complaint at www.ftc.gov.