If you are considering using Amazon's returns policy for fraudulent purposes, you may want to think again due to the prosecution of a couple who have been charged based on a returns scheme.
A couple from Muncie, Indiana, pleaded guilty last year to stealing over $1.2 million from e-retailer Amazon in electronic devices.
Erin Joseph Finan and Leah Jeanette Finan admitted to judges at the US District Court in Indianapolis to operating a scheme based on Amazon's open-hand return policy.
Between 2014 and 2016, the 38-year-olds purchased over 2,700 electronics and gadgets including gaming consoles, smartwatches, laptops, and cameras through Amazon using hundreds of fake accounts.
After purchasing goods such as GoPro cameras, Microsoft Xboxes, and Apple MacBooks, the Finans would report that the items were damaged or stolen.
Amazon would then replace these items at no charge.
These products were then sold on to another defendant, 29-year-old Indianapolis resident Danijel Glumac, who sold them to an unnamed agent in New York.
US District Court Judge Tanya Walton Pratt sentenced the couple to 71 months and 68 months in prison respectively on charges of federal mail fraud and money laundering. Glumac pleaded guilty to money laundering and fencing -- the purchase and sale of stolen good across state lines -- and was issued with a 24-month prison sentence.
"Consumer fraud not only unjustly enriches the perpetrator, it causes all of us to pay higher retail prices," US Attorney Josh Minkler said in a statement."To those who seek to exploit the convenience of online shopping through fraud, remember this case. You will be caught. You will be prosecuted. And you will go to federal prison for a long time."
The US Department of Justice (DoJ) says that the Finans treated Amazon fraud as their "job." In just over two years, the pair made around $750,000, while Glumac made close to $500,000 by acting as a fence.
The New York entity which purchased goods from Glumac sold the stolen goods to the public, sometimes even selling them on Amazon.
"Their nearly six-year sentences reflected their willingness to commit other frauds too," US prosecutors said. "They bounced checks. They rented cars but never paid for them. They rented houses but never paid the rent. And they even committed another online fraud involving stealing high-end rental softball equipment and selling it on Facebook groups of parents of children who were serious about softball."
The three defendants have been ordered pay back $1,218,504 between them in restitution.
The case was investigated by the US Internal Revenue Service, the United States Postal Inspection Service and Indiana State Police.
It is unlikely the trio are the only ones conducting fraudulent schemes based on Amazon's return policies, but Amazon has to maintain a balance between fair policies for lost, damaged, or stolen goods and measures to tackle fraud.
In order to try and combat the emerging problem, the tech giant has begun banning customers that are returning items too frequently. It has been reported that "requesting too many refunds" or "sending back the wrong items or violating other rules" can result in account closures.