DoJ charges four brothers for defrauding Amazon in overshipping scheme

In one instance, the brothers allegedly sent 7,000 toothbrushes to Amazon despite the e-commerce giant requesting for one case of disinfectant spray.

The US Department of Justice (DoJ) has laid charges on four individuals over allegations that they fraudulently induced Amazon into providing millions of dollars in additional payments.

By executing the scheme, the charged individuals allegedly obtained $19 million and had attempted to fraudulently obtain around $32 million in total.   

The four individuals -- brothers Yoel Abraham, Heshl Abraham, Zishe Abraham, and Shmuel Abraham -- allegedly manipulated Amazon's invoicing systems and billing procedures through a practice known as overshipping in order to compel the e-commerce giant to pay more money than it had agreed to. 

Overshipping entails a wholesaler shipping, invoicing, and receiving payment for goods that a retailer -- such as Amazon -- had not agreed to purchase. 

According to the DoJ's complaint, the brothers frequently shipped and invoiced for more than 10,000 units of an item despite Amazon requesting -- and the brothers agreeing to ship -- fewer than 100 units. 

One of the overshipping examples in the complaint is that Amazon and the charged individuals allegedly agreed to a purchase order for one case of disinfectant spray worth $94. Rather than sending the disinfectant spray, the individuals sent 7,000 toothbrushes -- priced at around $94 each -- and invoiced Amazon for over $658,000. 

When Amazon detected a pattern of fraudulent overshipping, the company would suspend the vendor accounts. In response, however, the four brothers would allegedly open new vendor accounts and disguise their identities by registering them with fake names and email addresses. 

The brothers also allegedly used VPNs to obfuscate their connection to previously suspended accounts, the DoJ wrote in its complaint.

"The indictment alleges that Yoel, Heshl, Zishe, and Shmuel Abraham came up with a new twist on an old trick, but the use of complex technology did not hide the simple fact that the defendants were bilking Amazon for goods they never provided," acting Manhattan US attorney Audrey Strauss said.

The four accused individuals have each been charged with conspiracy to commit wire fraud, wire fraud, and money laundering. 

The trial will be conducted later this year at the District Court for the Southern District of New York.

Earlier this year, the DoJ raised its first action in federal court to combat against online fraud related to COVID-19

The action was taken against a website that DoJ said falsely claims to offer vaccine kits from the World Health Organization (WHO) in exchange for a $4.95 shipping charge. When unsuspecting victims order the fake vaccine kit, the website asks for the victim's credit card information. 

There are currently no legitimate COVID-19 vaccines and the WHO is not distributing any such vaccine

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