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prominent Amazon The consultant got away with jail time for being involved in an elaborate scheme to bribe the company’s employees to give customers an edge in the e-retailer’s vast online marketplace.
Ephraim “Ed” Rosenberg in March charged six people with conspiracy to bribe Amazon employees in exchange for confidential information that benefits third-party sellers who sell products on the company’s marketplace. He pleaded guilty to criminal charges stemming from the September 2020 indictment he filed. .
Rosenberg was sentenced in federal court on Friday to two years’ probation and 12 months of house arrest. He was also ordered to pay a fine of $100,000.
“Mr. Rosenberg’s illegal activities are detrimental to the sellers who work so hard every day to build thriving businesses on Amazon, and today Mr. Rosenberg announced that he will continue to do so,” Amazon spokeswoman Mira Dix said in a statement. were held responsible for the crimes of “When we discovered suspicious activity related to this incident in 2018, we reported it to the FBI and actively supported subsequent investigations.”
Rosenberg, 48, is a household name in the Amazon third-party seller world. He runs his business consulting, advising entrepreneurs on how to sell products in his online marketplace and how to deal with unforeseen issues with their accounts. Rosenberg’s Facebook group for sellers, ASGTG, has more than 70,000 members and hosts a popular annual sellers conference in his hometown of Brooklyn.
The lawsuit offers an unfiltered glimpse into the cottage industry of consultants and brokers that has thrived with the growth of Amazon’s third-party marketplace. Since its founding in 2000, this marketplace has become a profitable and competitive platform for millions of sellers to sell their goods. From May 2019 to May 2020, average sales for US small businesses selling on the marketplace exceeded $160,000, according to He. Report issued by Amazon.
The marketplace has helped Amazon generate tens of billions of dollars in sales, but it’s also a notorious host of counterfeit, dangerous, and expired products. Behind the scenes, scammers have resorted to illegal tactics for years to crush competitors, artificially augment their own offerings, and circumvent Amazon’s marketplace rules. rice field.
This isn’t the first time Amazon has dealt with leaking confidential information or manipulating its site in exchange for employee payments. In 2018, the company investigated allegations that employees, primarily based in China, received payments ranging from $80 to more than $2,000 in exchange for access to internal data. wall street journal report.
Amazon said it invests hundreds of millions of dollars annually to ensure product safety and compliance.of regulations Employees providing internal data to sellers violate Amazon’s Seller Policies and Code of Conduct.
Mr. Rosenberg’s sentence is much lighter than that of other defendants. A former Amazon employee was sentenced to 10 months in prison last year by a consultant who sold products on Amazon. sentenced to 20 months in prison.
Prosecutors have accused Rosenberg of filing false complaints against Amazon, accusing him of using a competitor’s product, like some co-conspirators who allegedly bought fake negative reviews for a rival’s product. It recommended a reduced sentence for Rosenberg because there was no evidence that he had launched an attack on the list. Other defendants also pleaded guilty to tax evasion charges in addition to bribery schemes.
Between July 2017 and September 2020, Rosenberg directly and indirectly paid bribes to Amazon employees to steal sensitive data and gain access to internal systems. In one case, Rosenberg made 33 different PayPal payments worth $18,650 to an Amazon employee in Seattle in exchange for confidential information about a third-party seller’s account.
Most of his payments were for account “annotations,” or records of internal Amazon employees’ violations of seller accounts, which Rosenberg and another defendant, Joe Nilsen, said in an email. In the exchange, he secretly called it “fruit”.
“Sellers who have been suspended from selling on Amazon will use this inside information to determine exactly what Amazon knows about the seller’s violations and tailor their reinstatement appeals accordingly. We can,” the prosecutor said.
In an email, Nilsen boasted to Rosenberg that he had bribed employees to use the service.
“We don’t want to look like we have everything in the world, but even though it took a long time and a few face-to-face meetings, we are still amazed. We have acquired the ability,” Nilsen wrote in a January 2018 paper. He emailed Mr. Rosenberg, referring to his internal contacts as “high-level ‘flip-switch’ types.”
“I don’t want to float a little menu, but if there’s anything you need me to do, I’ll let you know,” Nilsen continued.
According to previously unsealed court documents, Rosenberg allegedly sent “secret threats” to Amazon employees at its Seattle headquarters as part of a bribery scheme. bloomberg report. According to Bloomberg, the documents also detail the defendant’s scrupulous efforts to avoid being caught by authorities, including allegedly stuffing a llama-shaped ottoman with cash allegedly bribing him.
Rosenberg’s guilty plea in March marked a reversal of his position on the case. He has repeatedly denied the prosecution’s allegations, claiming in LinkedIn messages to CNBC and postings on Reddit forums and Facebook groups that he is being framed. Later, in a public apology posted online, he admitted that he had made false statements about the incident and that he had bribed an Amazon employee.
Rosenberg’s attorney, Jacob Laufer, said in the judgment memorandum that although Rosenberg’s actions were illegal, they would be ruthlessly controlled by Amazon, and sellers could be arbitrarily removed from the market at any time. I wrote that there was a problem and that it was a sign that I was struggling to start a business. He made a comeback and turned to illegal tactics.
“Given that these sellers were unaware of their alleged fraud, how to fix the problem, and what Amazon might be made aware of, sellers frequently became desperate. , sometimes resorted to illegal means to obtain the information needed to achieve their savings goals, “their business,” the memo said. “The ‘required information’ was a note.”
Dix said Amazon has processes in place to help sellers avoid deactivations and restore them if necessary. The company has long invested in improving communications with sellers, reducing response times and making policy violations more visible, she added.
“Amazon has no room for fraud and no excuse for illegal activity,” Dix said in a statement.