An American jewellery firm EMH Group was fined $400,000 by the New York state attorney general’s office for allegedly bidding in its own auctions on eBay.com to increase the prices by some 20 per cent, according to media reports.

The company boss Ezra Dweck and his employees have been accused of placing some 232,000 such bids worth around $5 million using fictitious names over the past year.

The fraudulent activity was detected by eBay’s own internal research team, which brought it to the state attorney general’s attention.

EMH Group has been banned from the online auction industry for four years.