Feds Crack Down on Fraud Scheme That Allegedly Bribed Amazon Employees to Gain Better Sales

September 19, 2020 Updated: September 20, 2020

The Justice Department announced that six people have been indicted by a grand jury with conspiring to pay more than $100,000 in bribes to Amazon employees and contracts in order to gain an “unfair competitive advantage” on the giant online marketplace.

Federal prosecutors alleged that since at least 2017, the individuals have used bribery and fraud to benefit third-party sellers by serving as consultants to these sellers and sometimes making their own sales through their own third-party accounts, according to a statement on Sept. 18.

The indictment alleges that the individuals worked with Amazon employees and contractors to coordinate a complex scheme in which the individuals paid bribes in exchange for the employees and contractors to, in some cases, reinstate suspended accounts and product listings that were flagged as unsafe or had customer-safety complaints.

In other cases, the employees and contractors facilitated attacks against competitor third-party accounts by sharing competitive intelligence such as information about revenues and customers to the individuals, the indictment alleges. They allegedly would also use their inside access to suspend competitors’ third-party accounts and provide the individuals with information about Amazon’s internal algorithms, which would allow the individuals to flood the competitors’ listings with negative product reviews.

The employees and contractors also allegedly shared Amazon’s confidential information with the individuals and helped the individuals gain access to benefits that circumvented Amazon’s own rules, such as increasing the storage limits in Amazon’s warehouses for third-party accounts owned by the individuals.

“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,” U.S. Attorney Brian Moran said in a statement. “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.”

The six individuals charged are Ephraim Rosenberg, 45, from Brooklyn, New York; Joseph Nilsen, 31, and Kristen Leccese, 32, both from New York; Hadis Nuhanovic, 30, of Acworth, Georgia; Rohit Kadimisetty, 27, of Northridge, California; and Nishad Kunju, 31, of Hyderabad, India.

They’ve 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.

According to the prosecutors, conspiracy to use a communication facility in furtherance of commercial bribery and to gain unauthorized access to a protected computer is 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.

They are scheduled to appear in court on Oct. 15.

Follow Janita on Twitter: @janitakan