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How four crooks carried out $19m Amazon Vendor fraud

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How four crooks carried out $19m Amazon Vendor fraud

When you’ve been ripped off in a $19,000,000 fraud where a total of $32,000,000 was attempted to be stolen, you’re only to eager to assist the United States Attorney’s Office for the Southern District of New York in a lengthy investigation. That’s what happened with an Amazon Vendor fraud and last week four defendants were arrested.

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The Amazon Vendor fraud worked with the perpetrators alleged on multiple occasions to have shipped cheap goods with the ASIN for more expensive products and shipped and/or invoicing for quantities as high as 10,000 units when Amazon requested just 100.

It’s amazing that they got away with this mazon Vendor fraud to the tune of nineteen million dollars, let alone the 32 million they tried to swindle, but through nefarious fiddling of the system they sent in substitute goods at grossly inflated prices and excessive quantities.

WhatApp messages between the four showed no shame and instead shared tips of how to avoid detection. Messages included “I’m so in the mood to fuck Amazon. Did anyone try to overship and make a million profit in a week?” and “[j]ust make sure you have another account. But you can fuck them a lot. When it’s to [sic] big numbers fast they will lock you out.”

As an example, on one occasion Amazon placed an order for a case of 12 disinfection sprays at $94.03 per pack and the defendants sent in 7,000 toothbrushes marked up with the disinfection spray ASIN and invoiced them at $94.03 each – a total haul of $658,210.00 paid out in a single transaction!

Once Amazon detected the pattern of Amazon Vendor fraud, they suspended the vendor accounts identified; in response, the defendants tried to open other vendor accounts and disguise their identities by registering them in fake names, using different email addresses, and using virtual private servers to obfuscate their connection to previously suspended accounts and frustrate Amazon’s ability to detect and mitigate their fraudulent activity.

“The four charged today allegedly attempted to defraud Amazon out of tens of millions of dollars though a sophisticated and layered fraudulent invoicing scheme. Invoice fraud is not a victimless crime. Millions of dollars in lost revenue negatively impacts a company’s ability to provide cost effective services to legitimate customers who use the vendor’s platform. HSI works closely with our private partners to ensure that this type of fraud is mitigated, and those criminals are prosecuted for their actions.”
– Peter C. Fitzhugh, Special Agent-in-Charge, Homeland Security Investigations

As with most frauds of this type, it all unravels only too quickly when it’s done on the Internet. It’s impossible to hide your path once someone starts looking at the evidence and once they figure out what’s going on the whole plot is uncovered.

“Amazon is grateful to have worked with the United States Attorney’s Office for the Southern District of New York, the Department of Homeland Security, and Homeland Security Investigations on their vigorous prosecution of these individuals,“ said Cristina Posa, Associate General Counsel and Director of the Amazon Counterfeit Crimes Unit. “While our proactive controls ensure the vast majority of sellers in our store are honest entrepreneurs, fraudsters attempt to violate our policies, victimize our customers, and damage our store, and we look forward to working with law enforcement agencies to hold these bad actors accountable for their illegal activities.”
– Amazon

Property and assets will be seized along with probably length prison sentences for the four defendants if proved guilty.

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