A jewelry company selling on eBay that allegedly bid on its own auctions to illegally drive up prices by as much as 20 percent agreed to pay $400,000 in restitution and penalties, the New York state attorney general’s office said on Saturday. EMH Group LLC, has agreed to pay $400,000 to settle charges that it inflated prices by bidding in its own auctions.

EMH, which did business under the name Jewelry by Ezra, and also operated its own site, www.auctionriot.com, will also be banned from the online auction business for four years.

The jeweler was accused of manipulating Internet auctions by instructing its employees to secretly bid on the items the company was selling, thereby driving up the price.

People trying to buy jewelry never realized that they were locked in a bidding war with competitors who didn’t exist.

State officials said more than 232,000 of these shill bids were made over the course of a year, inflating prices by about 20 percent.

Posted: 06|10|07 at 9:29 am. Filed under: US News.