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$100,000 in bribes helped fraudulent Amazon sellers earn $100 million, DOJ says

Amazon fraud —

DOJ: Bribes to Amazon workers also helped sellers get rivals’ accounts suspended.

Jon Brodkin

A pile of Amazon boxes in front of the door of a house.

Enlarge / Amazon boxes.

Six people were indicted on allegations of paying over $100,000 in bribes to Amazon employees and contractors as part of a scheme to give third-party sellers unfair advantages on the Amazon marketplace. Among other things, the indictment says that Amazon workers who accepted bribes reinstated sellers whose accounts had been suspended for offering dangerous products, and these workers suspended the seller accounts of fraudulent sellers’ competitors.

The US Department of Justice today announced the indictment handed down by a grand jury in the Western District of Washington. The “defendants paid bribes to at least ten different Amazon employees and contractors,” the DOJ said. In one case, a 31-year-old defendant named Nishad Kunju “accepted bribes as a seller-support associate in Hyderabad, India, before becoming an outside consultant who recruited and paid bribes to his former colleagues,” the DOJ said.

In exchange for bribes, Amazon workers “baselessly and fraudulently conferred tens of millions of dollars of competitive benefits upon hundreds of [third-party] seller accounts that the Defendants purported to represent,” the indictment said. The DOJ said that workers “helped reinstate products and merchant accounts that Amazon had suspended or blocked entirely from doing business on the Amazon Marketplace” and that “the fraudulently reinstated products included dietary supplements that had been suspended because of customer-safety complaints, household electronics that had been flagged as flammable, consumer goods that had been flagged for intellectual-property violations, and other goods.” These fraudulently reinstated seller accounts included ones Amazon had “suspended for manipulating product reviews to deceive consumers, making improper contact with consumers, and other violations of Amazon’s seller policies and codes of conduct,” the DOJ said.

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The previously suspended merchants made over $100 million from Amazon sales after their “baseless and fraudulent reinstatement,” the indictment said. The scheme started no later than July 2017 and continued until September 2020, the indictment said.

Besides Kunju, the indicted people were Ephraim Rosenberg, 45, of Brooklyn, New York; Joseph Nilsen, 31, and Kristen Leccese, 32, of New York City; Hadis Nuhanovic, 30, of Acworth, Georgia; and Rohit Kadimisetty, 27, of Northridge, California. The defendants who bribed Amazon workers acted as consultants to third-party sellers, the DOJ said. Three of the defendants—Nilsen, Leccese, and Nuhanovic—also allegedly “made their own sales on the Amazon Marketplace through [third-party] accounts they operated.”

Attacks on competitors alleged

To give sellers further advantage over rivals, the bribed employees and contractors “facilitated attacks against competitors’ [third-party] accounts and product listings, by (a) sharing competitive intelligence about competitors’ revenues, customers, advertising campaigns, and suppliers; (b) using their inside access to Amazon’s network to suspend competitors’ [third-party] accounts; and (c) providing consultants with information about Amazon’s internal algorithms, which allowed the consultants to flood competitors’ product listings with fictitious negative product reviews,” the DOJ said.

The bribes also helped third-party sellers and consultants gain “unauthorized access to Amazon’s highly confidential standard operating procedures and algorithms,” providing “coveted insight into the systems that power Amazon’s search engine, Amazon’s product reviews, and Amazon’s enforcement processes,” the DOJ said.

Bribed workers provided contact information for Amazon employees and consumers, “which the members of the conspiracy misused and shared widely,” the DOJ said. Bribed workers also circumvented Amazon rules when they “increased [third-party] sellers’ storage limits in Amazon’s warehouses, facilitated [third-party] sellers’ otherwise meritless requests to sell products in restricted categories, and provided [third-party] sellers with inside knowledge about the most successful advertising campaigns and most profitable product listings,” the DOJ said.

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The six defendants were charged with conspiracy to use a communication facility to commit commercial bribery, conspiracy to access a protected computer without authorization, conspiracy to commit wire fraud, and wire fraud. The wire-fraud charges alone “are punishable by up to 20 years in prison and a $250,000 fine,” while the other charges are “punishable by up to five years in prison and a $250,000 fine,” the DOJ said.

Amazon said it has fired the workers who accepted bribes and that it assisted federal investigators in the case. “Amazon has systems in place to detect suspicious behavior by sellers or employees, and teams in place to investigate and stop prohibited activity,” the company said when contacted by Ars today. “We are especially disappointed by the actions of this limited group of now-former employees, and appreciate the collaboration and support from law enforcement to bring them and the bad actors they were entwined with to justice. There is no place for fraud at Amazon and we will continue to pursue all measures to protect our store and hold bad actors accountable.”

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