Hudson Valley Brothers Allegedly Schemed $19 Million From Amazon
Four brothers from the Hudson Valley are accused of running an elaborate scheme that fleeced at least $19 million from Amazon.
On Wednesday, Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and Peter C. Fitzhugh, Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations announced the indictment and arrest of 28-year-old Yoel Abraham of Suffern, Heshl Abraham, 32 of Spring Valley, 30-year-old Zishe Abraham of Spring Valley and Shmuel Abraham, 24, of Airmont.
The brothers were indicted on charges for allegedly engaging in a scheme to systematically defraud Amazon.com. Through the course of the scheme, the group manipulated Amazon’s vendor system in attempts to fraudulently induce Amazon to pay for goods that Amazon had not ordered, officials say.
In executing the scheme, the brothers allegedly attempted to illegally obtain at least approximately $32 million and successfully obtained at least approximately $19 million.
“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," Acting Manhattan U.S. Attorney Audrey Strauss said.
According to the indictment, the brothers, 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 invoiced the company for substitute goods at grossly inflated prices and excessive quantities. The four 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.
“The four charged today allegedly attempted to defraud Amazon out of tens of millions of dollars though 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 Special Agent-in-Charge Peter C. Fitzhugh said.
All four were charged with conspiracy to commit wire fraud, wire fraud, and money laundering. 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.