NEW YORK – Four brothers from Rockland County were arrested on August 19 and charged with conspiracy to commit wire fraud, wire fraud, and money laundering for allegedly engaging in a scheme to systematically defraud Amazon.
Yoel Abraham, 28, of Suffern, Heshl Araham, 32, of Spring Valley, Zishe Abraham, 30, of Spring Valley, and Shmuel Abraham, 24, of Airmont face maximum sentences of 20 years in prison for the wire fraud while the money laundering carries a maximum sentence of 10 years in prison.
Through the course of the scheme, according to the US Attorney’s Office, the defendants manipulated Amazon’s vendor system in attempts to fraudulently induce Amazon to pay for goods that Amazon had not ordered. In executing the scheme, the defendants fraudulently attempted to obtain at least approximately $32 million and successfully obtained at least approximately $19 million, according to Audrey Strauss, the Acting United States Attorney for the Southern District of New York.
Strauss said “The indictment alleges that Yoel, Heshl, Zishe, and Shmuel Abraham came up with a new twist on an old trick, but 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.”
The indictment, unsealed in Federal court last Wednesday says “The defendants, who purportedly operated wholesale businesses, 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 defendants frequently shipped and invoiced for more than 10,000 units of an item when Amazon had requested, and the defendants had agreed to ship, fewer than 100.” Once Amazon detected the pattern of fraudulent overshipping, it suspended the vendor accounts engaged in the fraud.
Homeland Security Investigation (HSI) Special Agent-in-Charge Peter C. Fitzhugh said “The four charged today allegedly attempted to defraud Amazon out of tens of millions of dollars through a sophisticated and layered fraudulent invoicing scheme. Invoice fraud is not a victimless crime. Millions of dollars in lost revenue negatively impacts a company’s ability to provide cost-effective services to legitimate customers who use the vendor’s platform. HSI works closely with our private partners to ensure that this type of fraud is mitigated, and those criminals are prosecuted for their actions.”