Over the course of two years, four brothers in New York allegedly swindled Amazon out of at least $19 million using thousands of $94 toothbrushes and other expensive goods, according to a Department of Justice indictment unsealed Wednesday. Federal prosecutors accused Yoel Abraham, Heshl Abraham, Zishe Abraham, and Shmuel Abraham of invoicing Amazon for a large number of products the company never ordered. The defendants allegedly discussed their gimmick openly in a family WhatsApp group. In one message from May 2018, the indictment says, Yoel wrote that he was “so in the mood to fuck Amazon.”
All four brothers, who were arrested Wednesday, are accused of using wholesale businesses they opened to engage in a scam called “overshipping.” It works by intentionally sending a company more goods than it ordered and billing for it. On Amazon, every product is given a unique identifier, a string of numbers called an Amazon Standard Identification Number. They are part of an item’s listing in Amazon’s catalog. Vendors have the ability to change listings, to make sure things like product descriptions are accurate.
According to the indictment, the brothers swapped ASINs for items Amazon ordered to send large quantities of different goods instead. In one instance, Amazon ordered 12 canisters of disinfectant spray costing $94.03. The defendants allegedly shipped 7,000 toothbrushes costing $94.03 each, using the code for the disinfectant spray, and later billed Amazon for over $650,000.
In another instance, Amazon ordered a single bottle of designer perfume for $289.78. In response, according to the indictment, the defendants sent 927 plastic beard trimmers costing $289.79 each, using the ASIN for the perfume. Prosecutors say the brothers frequently shipped and charged Amazon for more than 10,000 units of an item when it had requested fewer than 100. Once Amazon detected the fraud and shut down their accounts, the brothers allegedly tried to open new ones using fake names, different email addresses, and VPNs to obscure their identity. “Open account under dummy names and they can go look for no one,” Yoel allegedly wrote on WhatsApp in the fall of 2018.
“The use of complex technology did not hide the simple fact that the defendants were bilking Amazon for goods they never provided. The more our economic life moves online, the more we must ensure the integrity of our digital markets, which my office is committed to doing,” Audrey Strauss, the acting US attorney for Manhattan, said in a press release. The defendants are each charged with conspiracy to commit wire fraud, wire fraud, and money laundering. Lawyers representing Yoel Abraham and Zishe Abraham did not immediately respond to requests for comment.
There are two ways that independent merchants can sell products on Amazon. The first is through Seller Central, a platform that allows suppliers to sell directly to Amazon customers. On Vendor Central, which is what the Abraham brothers allegedly used, merchants act as wholesalers: Amazon buys their products and then resells them to customers at a markup. The setup is similar to most traditional retailers, except that Amazon isn’t a normal store. It offers a nearly endless array of products from millions of sellers and vendors—a gigantic marketplace that can be difficult to manage.
Amazon has battled for years to rid its site of counterfeiters, scammers, and merchants peddling dangerous products. The ecommerce giant relies on a mix of human moderation and automated safeguards, but some things still fall through the cracks. “So much of Vendor Central is automated, I’m sure there are ways to trick the system,” says Juozas Kaziukėnas, founder of the ecommerce intelligence firm Marketplace Pulse. “Amazon’s vendor managers are not managing every vendor account. Small ones are on autopilot.” Kaziukėnas says accounts on Vendor Central are also sometimes bought and sold, a violation of Amazon’s policies. After an account has been approved to sell products, it becomes extremely valuable.
Amazon declined to answer questions about whether it made any changes to its platform as a result of the allegations behind Wednesday’s arrests. Cristina Posa, a lawyer at Amazon’s Counterfeit Crimes Unit, said in a statement that the company was grateful to have worked with law enforcement on the case. “While our proactive controls ensure the vast majority of sellers in our store are honest entrepreneurs, fraudsters attempt to violate our policies, victimize our customers, and damage our store, and we look forward to working with law enforcement agencies to hold these bad actors accountable for their illegal activities,” Posa said.
Amazon launched the Counterfeit Crimes Unit earlier this year. The group includes former investigators and federal prosecutors, who work to identify and root out bad actors on Amazon’s platform. In April, the Trump administration put five of Amazon’s foreign websites on a list of “notorious markets” believed to facilitate the sale of counterfeits. Amazon disagreed with the decision and argued it was politically motivated.
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