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Wed Apr 24 2024 21:23:20

Amazon Defrauded by Vendor to the Tune of $19 Million

By: Ina Steiner

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Here's a different kind of Amazon fraud: a vendor that sold inventory to Amazon at wholesale is accused of bilking the marketplace for $19 million by allegedly manipulating its vendor system. The US Attorney's Office for the Southern District of New York charged four brothers with conspiracy to commit wire fraud, wire fraud, and money laundering.

According to the indictment, the defendants opened vendor accounts with Amazon to sell the company small quantities of goods: "By accepting a purchase order, the defendants agreed to supply specific goods, at specific prices, in specific quantities. Instead, they manipulated Amazon's vendor system, and then, in the most egregious iteration of the scheme, invoiced the company for substitute goods at grossly inflated prices and excessive quantities."

The government press release announcing the arrests of the four defendants noted that "the charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty."

According to the allegations, the defendants frequently shipped and invoiced for over 10,000 units of an item when Amazon had requested fewer than 100. The government called the practice an "overshipping" scheme.

An excerpt of the indictment described one example of the alleged crime, where "Vendor-3" was one of the defendants and "Online Retailer-1" was Amazon:

"On or about July 17, 2018, Vendor-3 confirmed a purchase order and agreed to ship one unit of a particular designer perfume with a particular ASIN ("ASIN-2"), at a unit price of $289.78. Instead, Vendor-3 manipulated Online Retailer-1's vendor system and shipped 927 units of a plastic beard trimming tool, bearing ASIN-2, to Online Retailer-1, for $289.78 each, and invoiced Online Retailer-1 approximately $268,626."

The USAO press release stated: "As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations and every fact described should be treated as an allegation."

The press release links to the fulltext of the indictment. One thing that might jump out to online sellers is the following:

"By qualifying as a Vendor, Online Retailer-1's systems also permit Vendors, through their vendor accounts, to edit the product detail pages associated with particular ASINs to ensure they accurately describe the product."

We've seen many branded sellers complain that Amazon allows others to change product detail pages associated with their products.

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Perminate Link for Amazon Defrauded by Vendor to the Tune of $19 Million   Amazon Defrauded by Vendor to the Tune of $19 Million

by: ronk53 This user has validated their user name.

Thu Apr 25 06:33:36 2024

I don't feel sorry for Amazon! They have been cheating their 3rd party sellers for years!  

Perminate Link for Amazon Defrauded by Vendor to the Tune of $19 Million   Amazon Defrauded by Vendor to the Tune of $19 Million

by: I_Fix_Dolls This user has validated their user name.

Thu Apr 25 08:29:25 2024

Don't they have any real people comparing orders from Amazon to the invoices of the shipped products?

Perminate Link for Amazon Defrauded by Vendor to the Tune of $19 Million   Amazon Defrauded by Vendor to the Tune of $19 Million

by: Mae This user has validated their user name.

Thu Apr 25 10:50:28 2024

I just received an e-mail from an Amazon vendor with the reverse problem, Heather's Tummy Care has been a high-velocity ASIN for over 20 years and over Christmas Amazon just stopped fulfilling their customers' orders without any explanation. Having shipped most of their pallets to Amazon, they didn't have any product to fulfill their customers' orders themselves, and they've been sinking fast.

Perminate Link for Amazon Defrauded by Vendor to the Tune of $19 Million   Amazon Defrauded by Vendor to the Tune of $19 Million

by: bd greatbuys This user has validated their user name.

Thu May 2 09:29:09 2024

OLD STUFF OF 2020



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