A distinguished Amazon consultant has avoided jail time for his involvement in an elaborate scheme to bribe company employees to offer his clients an upper hand on the e-retailer’s sprawling online marketplace.
Ephraim “Ed” Rosenberg in March plead guilty to a criminal charge, stemming from a Sept. 2020 indictment that charged six individuals with conspiring to pay Amazon employees bribes in exchange for confidential information that will profit third-party merchants selling goods on the corporate’s marketplace.
Rosenberg was sentenced Friday in a federal court to 2 years of probation, and 12 months of house arrest. He was also ordered to pay a $100,000 high quality.
“Mr. Rosenberg’s illegal actions were harmful to the sellers who work hard on daily basis to construct a thriving business on Amazon, and today he was held accountable for his crimes,” Amazon spokesperson Mira Dix said in a press release. “After we uncovered the 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 on the earth of Amazon third-party sellers. He runs a consultancy business that advises entrepreneurs on sell products on the net marketplace, and navigate unexpected issues with their accounts. Rosenberg’s Facebook group for sellers, ASGTG, has over 70,000 members, and he hosts a preferred conference for sellers every year in his hometown of Brooklyn.
The case provides an unfiltered glimpse into the cottage industry of consultants and brokers that has flourished alongside the expansion of Amazon’s third-party marketplace. Since its launch in 2000, the marketplace has develop into a lucrative and competitive platform for hundreds of thousands of sellers to market their wares. From May 2019 to May 2020, U.S. small and medium businesses selling on the marketplace had a median of over $160,000 in sales, in response to a report issued by Amazon.
While the marketplace has helped Amazon haul in tens of billions of dollars in sales, it is also develop into a notorious host to counterfeit, unsafe and expired goods. Behind the scenes, scammers have for years resorted to illicit tactics to squash competitors, artificially boost their listings or bypass Amazon’s marketplace rules.
The case is not the primary time Amazon has handled problems with company employees leaking confidential information or manipulating the positioning in exchange for payments. In 2018, the corporate investigated claims that employees, based totally in China, who received payments price $80 to greater than $2,000, in exchange for access to internal data, The Wall Street Journal reported.
Amazon has said it invests a whole bunch of hundreds of thousands of dollars per yr to make sure products are protected and compliant. The provision of internal data to sellers by employees violates Amazon’s seller policies and code of conduct.
Rosenberg’s punishment is much less severe than what other defendants have faced. A former Amazon worker was sentenced last yr to 10 months in prison, while a consultant who also sold products on Amazon is serving 20 months in prison.
Prosecutors beneficial a lesser sentence for Rosenberg because there was no evidence he initiated attacks on competitors’ product listings like a few of his conspirators, who allegedly lodged false complaints to Amazon, and purchased fake negative reviews for rivals’ products. Other defendants also pleaded guilty to tax evasion charges along with the bribery scheme.
Between July 2017 and Sept. 2020, Rosenberg paid bribes directly and not directly to Amazon employees in an effort to steal confidential data, in addition to gain access to internal systems. In a single case, Rosenberg made 33 different PayPal payments price $18,650 to an Amazon worker in Seattle in exchange for confidential details about third-party seller accounts.
Most of his payments were for account “annotations,” or an internal Amazon worker log of infractions on a sellers’ account, which Rosenberg and one other defendant, Joe Nilsen, covertly known as “fruit” in electronic message.
“Sellers who had been suspended from selling on Amazon could use this internal information to see exactly what Amazon had discovered in regards to the sellers’ infractions and to tailor their appeals for reinstatement accordingly,” prosecutors alleged.
Nilsen bragged to Rosenberg over email in regards to the services he had gained access to by bribing employees.
“I’m not attempting to make it appear to be we have now all the talents on the earth, but though it took a while and a few nose to nose meetings, we obtained abilities that also blow my mind,” Nilsen wrote in a Jan. 2018 email to Rosenberg, referring to his internal contacts as “high up ‘flick the switch’ type guys.”
“I don’t desire to have a bit menu floating around but for those who are in need of anything, just run it by me and I’ll let you understand,” Nilsen continued.
Previously unsealed court documents said Rosenberg allegedly sent a “veiled threat” to an Amazon worker at the corporate’s Seattle headquarters as a part of the bribery scheme, Bloomberg reported. The documents also detailed the defendants’ elaborate efforts to dodge detection by authorities, including allegedly stuffing a llama-shaped ottoman with money believed to be bribes, in response to Bloomberg.
Rosenberg’s guilty plea in March marked a reversal of his position on the case. He repeatedly denied prosecutors’ allegations and claimed in LinkedIn messages to CNBC he was being framed, in addition to in posts on Reddit forums and Facebook groups. He later admitted he made false statements in regards to the case and admitted to bribing Amazon employees in a public apology posted online.
An attorney for Rosenberg, Jacob Laufer, wrote in a sentencing memo that while Rosenberg’s conduct was illegal, it was a symptom of a marketplace ruthlessly governed by Amazon wherein merchants might be arbitrarily booted off the marketplace at any time, and struggling to get their businesses reinstated, turned to illicit tactics.
“Provided that these sellers were in the dead of night about their alleged wrongdoing, correct the issue, and when Amazon might recognize its error, sellers were incessantly desperate and sometimes would resort to illegal means to acquire the knowledge crucial to perform the goal of saving their businesses,” in response to the memo. “The ‘information crucial’ was the annotations.”
Dix said Amazon has processes in place to assist sellers avoid deactivation and get reinstated when appropriate. The corporate has for years been investing in improving its communications with sellers, speeding up response times and more clearly indicating policy violations, she added.
“There is no such thing as a place for fraud at Amazon and no excuse for resorting to illegal activities,” Dix said in a press release.