Why You Can Trust CNET Four brothers targeted Amazon in alleged $19 million fraud scheme
The New York brothers were arrested and charged Wednesday.
Four brothers from New York state were arrested and charged by federal authorities Wednesday in an alleged scheme to overcharge Amazon for wholesale orders and pocket $19 million in the process.
From 2017 to 2019, the brothers allegedly ran a wholesale business that exploited Amazon's vendor systems to send the e-commerce giant significantly more stuff than it agreed to buy and then charge the company a lot more money. For instance, in August 2018 Amazon agreed to buy from the brothers 12 canisters of a disinfectant spray for $94.03 per pack. Instead, they manipulated the vendor system to send 7,000 toothbrushes for $94.03 each and invoiced the company about $658,210.
They repeated this process over and over again, and attempted to defraud Amazon to the tune of about $32 million, according to the Department of Justice, which announced the arrests Wednesday. They netted $19 million.
According to the indictment, the brothers also allegedly gloated about their scheme in messages to each other on WhatsApp. At one point, one defendant wrote to his brothers, "I'm so in the mood to fuck Amazon" and asked, "Did anyone try to overship and make a million profit in a week?"
The arrests are part of Amazon's stepped-up efforts to fight against scammers who try to defraud its businesses and customers. The company in June started its Counterfeit Crimes Unit to sue alleged counterfeiters, and it's spent the past few years suing other alleged scammers who have targeted its e-book business and its Alexa customers.
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The four brothers are Yoel Abraham, 28, of Suffern; Heshl Abraham, 32, of Spring Valley; Zishe Abraham, 30, of Spring Valley; and Shmuel Abraham, 24, of Airmont. They were each charged with conspiracy to commit wire fraud, wire fraud and money laundering. Wire fraud and wire fraud conspiracy carry a maximum sentence of 20 years in prison, and money laundering carries a maximum sentence of 10 years.
"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," Cristina Posa, associate general counsel and director of the Amazon Counterfeit Crimes Unit, said in a statement Wednesday night, "and we look forward to working with law enforcement agencies to hold these bad actors accountable for their illegal activities."
