The brothers Abraham of Rockland County have been charged with wire fraud and money laundering for allegedly ripping off Amazon for $19 million.
A federal grand jury indicted Yoel, Heshl, Zishe and Shmuel Abraham on Aug. 17 on charges of bilking Amazon in a vendor overshipping scheme.
The defendants attempted to obtain at least $32 million, the indictment states, and fraudulently obtained $19 million.
Yoel, 28, of Suffern; Heshl, 32, and Zishe, 30, both of Spring Valley; and Shmuel, 24, of Airmont, were arrested Aug. 19. They pleaded not guilty in U.S. District Court in Manhattan. They were released from custody on $2 million appearance bonds each.
From 2017 to 2019, the Abrahams allegedly opened vendor accounts, shipped more merchandise than requested and manipulated the invoicing system to get excessive payments.
Amazon allows third-party vendors to use its sales platform to sell items that have modest sales volumes and are not kept in stock.
The government claims the brothers set up limited liability corporations and registered six vendor accounts, using addresses in Monsey, Spring Valley and Valley Cottage in Rockland; Newburgh in Orange County; and Brooklyn.
They agreed to sell Amazon specific goods at specific prices, according to the indictment, but shipped and invoiced for far more merchandise at inflated prices.
In one scheme, they allegedly shipped items that Amazon had not ordered.
In July 2018, for example, an Abraham vendor agreed to ship a designer perfume for $289.78. Instead, 927 plastic beard trimming tools were shipped at $289.78 each, the indictment states, and Amazon paid $268,626 that was deposited in a Rockland bank account held in Heshl Abraham”™s name.
In August 2018, one of the Abraham vendors agreed to ship a case of 12 canisters of disinfectant spray, for $94.03 per pack. Instead, they allegedly shipped 7,000 toothbrushes at $94.03 each, according to the indictment, and Amazon paid $658,210 that was deposited in a Rockland bank account held by Yoel Abraham.
When a vendor sends too much stuff, Amazon typically assumes there has been an error and requests clarification, according to the indictment. When Amazon detects an overshipping scheme, it deactivates the vendor account.
The indictment states the brothers manipulated Amazon”™s invoicing system to avoid detection, but does not explain the exact mechanism that enabled them to allegedly get away with such a massive fraud for so long.
The brothers repeatedly discussed how to evade detection by Amazon, the indictment states, using an encrypted WhatsApp texting group named after the address of their parents”™ home in Monsey.
In November 2018, as Amazon was catching on, Yoel Abraham purportedly texted, “Open account under dummy names and they can go look for no one,” according to the indictment.
Zishe Abraham responded, “Yup, need to do that ”¦ The problem the first accounts was under real names.”
When Amazon suspended their vendor accounts, the government claims, the brothers tried to open new accounts with fake names and different email addresses and using virtual private servers to disguise their identities.
If found guilty, the brothers could be sentenced to prison for 20 years for wire fraud and conspiracy to commit wire fraud, and for 10 years for money laundering.
Acting U.S. Attorney Audrey Strauss cited the work and assistance of U.S. Homeland Security, U.S. Customs and Border Protection, New York City police, the Waterfront Commission of New York Harbor, Rockland County Sheriff”™s Department and Amazon.
Assistant prosecutor Jilan J. Kamal and the prosecutor”™s office of complex frauds and cybercrime are handling the case.
