Outstanding Amazon a consultant escaped prison time for participating in an elaborate scheme to bribe the corporate’s employees to present its customers a bonus in the retailer’s vast online marketplace.
Ephraim “Ed” Rosenberg pleaded guilty in March to criminal charges stemming from a September 2020 indictment that accused six people of conspiring to bribe Amazon employees in exchange for confidential information that might profit third-party merchants selling goods on the marketplace corporations .
Rosenberg was sentenced Friday by a federal court to 2 years probation and 12 months of house arrest. He was also ordered to pay a tremendous of 100,000.
“Mr. Rosenberg’s illegal actions were damaging to sellers who work hard daily to construct a thriving business on Amazon, and today he has been held accountable for his crimes,” Amazon spokeswoman Mira Dix said in a press release. “After we discovered suspicious behavior related to this case in 2018, we reported it to the FBI and actively supported the following investigation.”
Rosenberg, 48, is a well known figure in the world of Amazon third-party sellers. He runs a consulting company that advises entrepreneurs on tips on how to sell products on the net marketplace and solve unexpected problems with their accounts. Rosenberg’s Facebook group for sellers, ASGTG, has greater than 70,000 members, and he hosts a well-liked sales conference in his hometown of Brooklyn every yr.
The case provides unfiltered insight into the cottage industry of consultants and brokers that has flourished with the expansion of Amazon’s third-party market. Since its launch in 2000, the marketplace has turn out to be a lucrative and competitive platform for hundreds of thousands of sellers to sell their wares. From May 2019 to May 2020, US SMBs selling in the market averaged over $160,000 in sales, in line with data issued report by Amazon.
While the marketplace has helped Amazon gain tens of billions of dollars in sales, it has also turn out to be a notorious host to counterfeit, dangerous, and expired goods. Behind the scenes, scammers have resorted to illegal tactics for years to crush competitors, artificially boost their auctions, or circumvent Amazon’s marketplace rules.
This is not the primary time Amazon has tackled the issues of company employees who disclose sensitive information or manipulate the positioning in exchange for payments. In 2018, the corporate investigated allegations that employees, mostly from China, who received payments starting from $80 to greater than $2,000 in exchange for access to internal data, Wall Street Journal reported.
Amazon said it invests a whole lot of hundreds of thousands of dollars a yr to maintain its products protected and compliant. The supply employee sharing of internal data with sellers violates Amazon’s Seller Policies and Code of Conduct.
Rosenberg’s punishment is way less severe than that faced by other defendants. A former Amazon employee was sentenced to 10 months in prison last yr, while a consultant who also sold products on Amazon is serving 20 months in prison.
Prosecutors beneficial a lighter sentence for Rosenberg because there was no evidence that he initiated attacks on competitor product listings, like a few of his conspirators who allegedly filed false complaints with Amazon and purchased fake negative reviews of rival products. Other defendants also pleaded guilty to tax evasion charges in addition to a bribery scheme.
Between July 2017 and September 2020, Rosenberg paid bribes directly and not directly to Amazon employees to steal sensitive data in addition to gain access to internal systems. In a single case, Rosenberg made 33 different PayPal payments value $18,650 to an Amazon employee in Seattle in exchange for sensitive account information for third-party sellers.
Most of his payments were for account “endorsements” or an Amazon employee’s internal misconduct go surfing the seller’s account, which Rosenberg and one other defendant, Joe Nilsen, secretly known as “fruit” in electronic mail.
“Sellers who were suspended from selling on Amazon could use this inside information to see exactly what Amazon discovered about seller misconduct and adjust their reinstatement appeals accordingly,” prosecutors said.
Nilsen bragged to Rosenberg via email about services he had accessed by bribing employees.
“I’m not trying to present the impression that we now have all the skills in the world, but while it took a while and a number of face-to-face meetings, we now have acquired skills that also amaze me,” Nilsen wrote in a January 2018 email to Rosenberg, referring to his inside contacts as “flick a switch high-ranking guys.”
“I don’t need a little bit menu going around, but when you need anything just run it through me and I’ll let ,” Nilsen continued.
Previously unsealed court documents said Rosenberg allegedly sent a “veiled threat” to an Amazon employee at the corporate’s Seattle headquarters as a part of a bribery scheme, Bloomberg reported. The documents also detail the defendants’ efforts to avoid detection by authorities, including allegedly stuffing a llama-shaped pouf with money believed to be a bribe, in line with Bloomberg.
Rosenberg’s confession in March marked a reversal of his stance on the matter. He has repeatedly denied prosecutors’ allegations and claimed in LinkedIn messages to CNBC that he was framed, in addition to in posts on Reddit forums and Facebook groups. He later admitted that he had made false statements concerning the case and admitted to bribing Amazon employees in a public apology posted online.
Rosenberg’s attorney, Jacob Laufer, wrote in a sentencing memo that while Rosenberg’s conduct was illegal, it was symptomatic of a market ruthlessly ruled by Amazon, where merchants could possibly be arbitrarily kicked out of the market at any time and struggled to get their business reinstated, petitioned for illegal tactics.
“Provided that these sellers didn’t know tips on how to fix the issue and when Amazon could recognize their mistake, sellers often became desperate and sometimes resorted to illegal means to acquire the knowledge obligatory to realize the goal of saving their business,” we read. in a note. “The ‘essential information’ was the annotations.”
Dix said Amazon has procedures in place to assist sellers avoid deactivation and produce them back when appropriate. She added that the corporate has been investing for years in improving communication with sellers, speeding up response times, and flagging policy violations more clearly.
“Fraud has no place at Amazon and there isn’t a excuse for resorting to illegal activities,” Dix said in a press release.