ROCKLAND COUNTY, NY — Four Rockland residents were indicted and arraigned Wednesday, accused of engaging in a scheme to systematically defraud Amazon.com.
Yoel Abraham, 28, of Suffern, Heshl Abraham, 32, of Spring Valley, Zishe Abraham, 30, of Spring Valley, and Shmuel Abraham, 24, of Airmont, are each charged with conspiracy to commit wire fraud, wire fraud, and money laundering.
Prosecutors said the brothers tried to get $32 million by manipulating Amazon’s vendor system to induce massive online retailer to pay for goods that the company had not ordered, and were successful in scamming $19 million.
Peter C. Fitzhugh, Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations, called it “a sophisticated and layered fraudulent invoicing scheme.”
The brothers, who purportedly operated wholesale businesses or registered accounts in Monsey, Spring Valley, Valley Cottage and Brooklyn, opened vendor accounts with Amazon to sell the company small quantities of goods.
Prosecutors alleged that in the most egregious iteration of the scheme, they invoiced the company for substitute goods at grossly inflated prices and excessive quantities. For example, they frequently shipped and invoiced for more than 10,000 units of an item when Amazon had requested, and they had agreed to ship, fewer than 100.
For example, in 2018 one of the dummy vendors they had set up got a contract to ship to Amazon one unit of a designer perfume at $289.78. Instead, they shipped and invoiced for 927 units of a plastic beard-trimming tool for $289.78 each. Amazon paid, sending $268,626 to a bank account in Rockland County opened by Heshl Abraham.
“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,” said Audrey Strauss, the Acting United States Attorney for the Southern District of New York. “The more our economic life moves online, the more we must ensure the integrity of our digital markets.”
According to the indictment, the brothers discussed the scheme, extended advice, and helped each other evade detection using an encrypted group texting chain on the messaging application WhatsApp. Their group was named after the address of the Monsey home where their parents lived and where, for a while, Yoel Abraham operated the e-commerce scheme out of the basement.
On May 1, 2018, prosecutors allege, Yoel Abraham messaged the group “I’m so in the mood to f— Amazon,” and asked “Did anyone try to overship and make a million profit in a week?”
Shmuel Abraham offered advice, including working slowly, saying that Amazon would lock them out if the numbers got too big too fast. “But you can f— them a lot,” he said, according to prosecutors.
Once Amazon detected the pattern of fraudulent overshipping, it suspended the vendor accounts; in response, prosecutors alleged the brothers tried to open other vendor accounts and disguise their identities by registering them in fake names, using different email addresses, and using virtual private servers to hide their connection to previously suspended accounts and frustrate Amazon’s ability to detect and stop them.
On Nov. 1, 2018, prosecutors said the brothers discussed that Amazon’s increasing enforcement was going to force them to give up the fraudulent invoicing scheme altogether and “go legit” unless they could come up with new ways to avoid detection.
“Invoice fraud is not a victimless crime,” Fitzhugh said. “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.”
Wire fraud and wire fraud conspiracy carry a maximum sentence of 20 years in prison, and money laundering carries a maximum sentence of 10 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing will be determined by the judge.
They were arraigned before U.S. Magistrate Judge Stewart D. Aaron. The case is assigned to U.S. District Judge Ronnie Abrams.
Strauss praised the work of the Department of Homeland Security, Homeland Security Investigations, the New York City Police Department, U.S. Customs and Border Protection, the Rockland County Sheriff’s Department, and the Waterfront Commission of New York Harbor, and thanked Amazon for its cooperation with the investigation.
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