Amazon's major loophole fraud case! The fraud amount is as high as 19 million US dollars!

Strange things happen every year, but this year there are especially many.

Recently, the FBI uncovered a large-scale fraud case involving a total amount of up to 19 million US dollars.

This is an incredibly simple yet unbelievable scam. A small family business took advantage of a loophole in the platform's procurement system and defrauded $19 million from the US e-commerce giant, which is the Amazon platform that only abuses you, but you can't abuse it.

According to federal officials, the suspects in the scam are four brothers from New York named Yule, Hessl, Zisher and Schmier Abraham.

The four suspects had experience in money laundering and telecommunications fraud before. When they learned about the loophole in Amazon's system, the four brothers even boasted in the WhatsApp family group. The eldest of the four brothers wrote in 2018 that he was "enjoying killing Amazon. Who else can make $500,000 in profit in a week?" It can be said to be extremely arrogant. What's more horrifying is that this criminal process lasted for three years from 2017 to 2019.

So how did such a major crime go undetected and escape Amazon's heavy investigation, stealing at least $19 million?

It is understood that the four brothers opened a wholesale company in their home and charged Amazon for excess payments by "over-shipping" and stealing product identification codes. Specifically, each product on Amazon has a unique identification code, also known as the Amazon Standard Identification Number (ASIN), and suppliers have the right to change the products on the shelves to ensure that the products sold meet the description on the webpage.

There are two main channels for third-party sellers to sell goods on Amazon. The first channel is called Sell Central, where suppliers can sell goods directly to consumers. The second channel is called Vendor Central, where sellers first sell goods to Amazon, and then Amazon adds a price before selling them to consumers. These four brothers discovered a system loophole in the second channel and desperately tried to fleece Amazon.

For example, in a fraudulent transaction in 2018, Amazon purchased 12 bottles of disinfectant spray from the four brothers, agreeing to a price of $94.03 per package. However, they used the ASIN of the disinfectant spray to send 7,000 toothbrushes to Amazon, each priced at $94.03, and exclaimed "What a sky-high price for a toothbrush."

The four brothers then used the disinfectant spray ASIN code provided by Amazon to issue an invoice for $650,000 to Amazon.

On July 18 this year, they agreed to ship a designer perfume, each priced at $289.78. But according to court documents, they allegedly manipulated Amazon's system and "shipped 927 plastic beard trimming tools" at a price of $289.78 each. This order defrauded Amazon of nearly $270,000.

How could Amazon not have noticed such a low-level substitution?

In fact, there are tens of thousands of products on the Amazon platform, which cannot be managed manually, so most supplier channels are fully automated. This leaves loopholes for fraud and counterfeiting.

When Amazon discovered the loophole, it randomly closed the company accounts of the four brothers. They then opened new accounts with fake identities and used VPNs to disguise their IP addresses in order to deceive Amazon.

Any illegal behavior will eventually end badly, and the US federal law enforcement authorities finally arrested the Abraham family in Rockland County, New York on Wednesday. However, it is certain that these four brothers are not the only ones who took advantage of system loopholes to fleece Amazon.

Therefore, in order to prevent such cases from happening again, Amazon created the Counterfeit Crimes Unit at the beginning of this year, which absorbed many former federal law enforcement officers and prosecutors to identify and eliminate fraudulent sellers and fraudulent activities on the Amazon platform.

Amazon declined to be interviewed by the media for this type of case, but expressed gratitude to federal law enforcement officers. As for the four brothers, they face charges of conspiracy to commit fraud, fraud, and money laundering. The maximum sentence for the first two charges is 20 years each, and the maximum sentence for money laundering is 10 years. This means that they are likely to spend decades in prison.

This year's epidemic has seriously affected the interests of many sellers. In order to protect their own interests, many sellers have done many things that violated the rules of the Amazon platform. As a result, they were severely hit and punished by Amazon. We advise all sellers not to cross the red line. So how to break this deadlock?