Consultants charged for bribing Amazon Marketplace employees to game the platform

Updated: Prosecutors allege the group paid handsome bribes to give clients a competitive advantage.

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The US Department of Justice (DoJ) has indicted six individuals for allegedly issuing bribes to give Amazon Marketplace merchants competitive advantages. 

On Friday, US prosecutors named Ephraim Rosenberg, Joseph Nilsen, and Kristen Leccese, of New York; Georgia resident Hadis Nuhanovic, Rohit Kadimisetty, from California; and Nishad Kunji, based in Hyderabad, India, as suspects in the alleged fraud. 

According to the indictment, issued by a Grand Jury in the Western District of Washington, the six conspired to pay Amazon employees over $100,000 to secure an "unfair competitive advantage" on Amazon Marketplace. 

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The bribery bill is steep, but in return, the fraud carried a commercial worth and sales revenue of up to $100 million, the DoJ claims. 

Prosecutors allege that since at least 2017, the six acted as consultants to third-party sellers on Amazon, and two of the individuals also operated their own stores. At least 10 Amazon employees and contractors received kickbacks -- including Kunji, who apparently began as a seller and then was later roped into the scheme as a consultant -- to conduct fraudulent activities behind the scenes.

This included reinstating suspended merchant accounts and product listings, many of which had been removed due to safety complaints ranging from dietary supplements to faulty and flammable electronics.

"The fraudulently reinstated accounts included accounts that 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 added. 

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In addition, the "corrupt" employees facilitated attacks against competitors by sharing business intelligence, suspending other third-party consultant accounts, sharing confidential data relating to Amazon's algorithms and procedures, and paving the way for the consultants to flood rival products with fake reviews.  

The six are being charged with wire fraud, conspiracy to commit wire fraud, conspiracy to use a communication facility to commit commercial bribery, and conspiracy to access a protected computer without authorization. 

Conspiracy to commit wire fraud and conducting wire fraud carry up to 20 years behind bars and a fine of $250,000, whereas the following two charges could result in a prison sentence of up to five years and a further $250,000 penalty. 

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"As the world moves increasingly to online commerce, we must ensure that the marketplace is not corrupted with unfair advantages obtained by bribes and kickbacks," said US Attorney Brian Moran. "The ultimate victim from this criminal conduct is the buying public who get inferior or even dangerous goods that should have been removed from the marketplace."

The FBI, IRS, and the DoJ's Office of International Affairs are investigating the case. The defendants are due to appear in the US District Court in Seattle on October 15. 

Update 19.10 BST

"We work hard to build a great experience for our customers and sellers, and bad actors like those in this case detract from the flourishing community of honest entrepreneurs that make up the vast majority of our sellers," Amazon told ZDNet. "Amazon has systems in place to detect suspicious behavior by sellers or employees, and teams in place to investigate and stop prohibited activity. 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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