6 indicted in multi-million dollar scheme to bribe Amazon employees and contractors

6 indicted in multi-million dollar scheme to bribe Amazon employees and contractors

SEATTLE — U.S. Attorney Brian T. Moran on Friday announced that six people have been indicted by a Grand Jury in the Western District of Washington with conspiring to pay more than $100,000 in commercial bribes to Amazon employees and contractors in exchange for an “unfair advantage” on the Amazon Marketplace worth more than $100 million.

The following people have been charged with conspiracy to use a communication facility to commit commercial bribery, conspiracy to access a protected computer without authorization, conspiracy to commit wire fraud, and wire fraud:

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  • Ephraim Rosenberg, 45, of Brooklyn, New York
  • Joseph Nilsen, 31, of New York City
  • Kristen Leccese, 32, of New York City
  • Hadis Nuhanovic, 30, of Acworth, Georgia
  • Rohit Kadimisetty, 27, of Northridge, California
  • Nishad Kunju, 31, of Hyderabad, India

They are all expected to make their initial appearances in U.S. District Court in Seattle on October 15.

“As the world moves increasingly to online commerce, we must ensure that the marketplace is not corrupted with unfair advantages obtained by bribes and kick backs,” Moran said in a news release. “The ultimate victim from this criminal conduct is the buying public who get inferior or even dangerous goods that should have been removed from the marketplace. I commend the investigators and cybersecurity experts who have worked to identify and indict those engaged in these illegal schemes.”

According to the indictment, the defendants served as consultants to “third-party” sellers on the Amazon Marketplace. The third-party sellers were made up of people and groups who sold household goods, consumer electronics and dietary supplements, officials said.

“Realizing they could not compete on a level playing field, the subjects turned to bribery and fraud in order to gain the upper hand,” special agent in charge Raymond Duda said in a news release. “What’s equally concerning, not only did they attempt to increase sales of their own products, but sought to damage and discredit their competitors. This indictment should send a message that the FBI will not sit on the sidelines while criminals try to cheat their way to the top.”

The indictment says the bribery and fraud tactics have been used by the defendants since at least 2017. In addition to providing consulting services to the third-party sellers, officials said Nilsen, Leccese and Nuhanovic made their own sales on Amazon through third-party accounts they operated.

According to the indictment, the defendants paid bribes to at least 10 different Amazon employees and contractors, including Kunju, who is accused of accepting bribes as a seller-support associate in India, before becoming an outside consultant who recruited and paid bribes to his former colleagues.

In exchange for those bribes, officials said the corrupted employees and contractors did the following:

"Reinstating suspended merchant accounts and product listings on the Amazon Marketplace: The corrupted employees and contractors helped reinstate products and merchant accounts that Amazon had suspended or blocked entirely from doing business on the Amazon Marketplace. The fraudulently reinstated products included dietary supplements that had been suspended because of customer-safety complaints, household electronics that had been flagged as flammable, consumer goods that had been flagged for intellectual-property violations, and other goods. The fraudulently reinstated accounts included accounts that Amazon had suspended for manipulating product reviews to deceive consumers, making improper contact with consumers, and other violations of Amazon’s seller policies and codes of conduct. The Indictment describes a variety of ways in which corrupted employees and contractors misused their positions to reinstate these accounts, including by manually reinstating product listings, and approving baseless and fraudulent merchant appeals that they themselves helped draft.  In total, after their fraudulent reinstatement, the products and merchants earned in excess of $100 million in sales revenue.

"Facilitating attacks against competitors: The corrupted employees and contractors facilitated attacks against competitors' 3P accounts and product listings, by (a) sharing competitive intelligence about competitors' revenues, customers, advertising campaigns, and suppliers; (b) using their inside access to Amazon’s network to suspend competitors' 3P accounts; and (c) providing consultants with information about Amazon’s internal algorithms, which allowed the consultants to flood competitors' product listings with fictitious negative product reviews.

"Misappropriating Amazon’s highly confidential business information: The corrupted employees and contractors also provided consultants and 3P sellers with unauthorized access to Amazon’s highly confidential standard operating procedures and algorithms. These materials provided an obvious, unfair, competitive benefit to 3P sellers, by giving them coveted insight into the systems that power Amazon’s search engine, Amazon’s product reviews, and Amazon’s enforcement processes. The misappropriated data also included the contact information for Amazon employees and consumers, which the members of the conspiracy misused and shared widely.

“Circumventing Amazon’s internal limits on 3P accounts: The corrupted employees and contractors conveyed exclusive benefits that circumvented Amazon’s rules and regulations. In exchange for bribes, they increased 3P sellers' storage limits in Amazon’s warehouses, facilitated 3P sellers' otherwise meritless requests to sell products in restricted categories, and provided 3P sellers with inside knowledge about the most successful advertising campaigns and most profitable product listings.”

Conspiracy to use a communication facility in furtherance of commercial bribery, and to gain unauthorized access to a protected computer are punishable by up to five years in prison and a $250,000 fine.

Conspiracy to commit wire fraud, and wire fraud, are punishable by up to 20 years in prison and a $250,000 fine.

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