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