DOJ Charges Six Over Amazon Employee Bribery Project

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A worker assembles a box for delivery to the Amazon fulfillment center in Baltimore, Maryland, the United States, April 30, 2019.Clodagh Kilcoyne | Reuters

The US Department of Justice on Friday charged six people with participating in a scheme to bribe Amazon employees and contractors to gain “an unfair advantage” in the company’s online marketplace. .Federal prosecutors allege that, since at least 2017, individuals have used bribery and fraud to benefit third-party merchants selling goods on the Amazon Marketplace. In some cases, people have worked with Amazon employees to reinstate suspended products that had been flagged as unsafe, according to the indictment.

The indictment describes a complex and coordinated effort by external consultants to bribe Amazon employees to gain valuable data on competitors from third-party sellers, as well as privileged access to information about Amazon’s internal algorithms and benefits violating Amazon’s own rules, such as selling products in categories.

The people were said to have served as consultants to third-party vendors who sold a range of products, including household items, consumer electronics and dietary supplements. Several of the people not only served as consultants, but also sold products as third-party sellers on Amazon.

As a result of the alleged conspiracy, the individuals were given unfair competitive advantages for third-party seller accounts worth over $ 100 million, according to the DOJ.

Amazon’s sprawling marketplace, home to millions of third-party sellers, now accounts for around 60% of the company’s online sales. While the Marketplace has helped Amazon generate record revenue, it is also home to counterfeit, dangerous, and even outdated products. The company said it invests hundreds of millions of dollars a year to ensure product safety and compliance.

Amazon told CNBC in a statement that “there is no room for fraud at Amazon.” The company added that it has systems in place to detect suspicious behavior from salespeople or employees, and teams that investigate and shut down prohibited activities.

It is not known whether Amazon fired the employees allegedly involved in the bribery scheme.

“We are particularly disappointed with the actions of this limited group of former employees, and appreciate the collaboration and support of law enforcement to bring them to justice, as well as the bad actors with whom they were linked,” added Amazon.

The six people indicted by the DOJ are Ephraim Rosenberg, 45, a resident of Brooklyn, New York; Joseph Nilsen, 31, and Kristen Leccese, 32, of New York, New York; Hadis Nuhanovic, 30, from Acworth, Georgia; Rohit Kadimessty, 27, of Northridge, Calif .; and Nishad Kunju, 31, from Hyderabad, India.

They are all charged with conspiracy to use a means of communication to commit commercial bribes, conspiracy to gain access to a protected computer without authorization, conspiracy to commit electronic fraud and electronic fraud.

Conspiracy to use a means of communication to commit commercial bribes and gain access to a protected computer carries a maximum penalty of five years in prison, while conspiracy to commit fraud electronic and electronic fraud carries a maximum penalty of 20 years in prison.

Bribes to bring back suspended accounts, products

The individuals have reportedly paid bribes to at least 10 different Amazon employees and contractors, including Kunju, who worked as a seller support associate in Hyderabad, where Amazon has a large campus of business. After allegedly accepting bribes while employed at Amazon, Kunju became an outside consultant for third-party sellers, during which he “recruited and paid bribes to his former colleagues.” , the DOJ said.

In return for the bribes, “corrupt” employees and contractors allegedly helped restore suspended third-party seller accounts and product listings in the Amazon Marketplace, including dietary supplements suspended due to consumer safety complaints, home electronics identified as flammable and consumer goods reported for intellectual property infringement.

Amazon employees have manually reinstated suspended accounts and product listings, and approved “baseless and fraudulent” appeals submitted by merchants and, in some cases, written by employees themselves, according to the deed. of accusation.

Employees also “facilitated attacks” on third-party vendor competitors by suspending their accounts and sharing information about their revenues, vendor customers, and advertising campaigns. They also provided insight into Amazon’s internal algorithms, allowing consultants to “flood competitor’s product listings with fictitious negative product reviews,” the DOJ said.

The individuals allegedly bribed Amazon employees to gain access to the benefits, breaking the rules of Amazon’s third-party sellers. Employees increased third-party sellers’ storage limits in Amazon warehouses, allowed them to offer products in restricted categories, and provided sellers with “basics” on the most successful ad campaigns and profitable products, says the DOJ.

Amazon has already faced internal corruption issues among employees. In 2018, the Wall Street Journal reported that Amazon was investigating data breaches and alleged bribes from Amazon employees, who offered inside data to third-party merchants to help them compete in the market. .

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