an outstanding amazon The consultant avoided prison for his part in an elaborate scheme to bribe company employees to give his clients an upper hand in the e-retailer’s sprawling online marketplace.
Ephraim “Ed” Rosenberg pleaded guilty in March to criminal charges stemming from a September 2020 indictment alleging six individuals conspired to pay bribes to Amazon employees in exchange for confidential information that would make Third-party merchants who sell goods on the company’s marketplace benefit.
Rosenberg was sentenced to two years probation and 12 months house arrest in federal court on Friday. He was also ordered to pay a $100,000 fine.
“Mr. Rosenberg’s illegal actions are harmful to sellers who work hard every day on Amazon to build thriving businesses,” Amazon spokeswoman Mira Dix said in a statement. Take responsibility for your crimes.” “When we discovered suspicious behavior in connection with this case in 2018, we reported it to the FBI and actively supported the ensuing investigation.”
Rosenberg, 48, is a well-known figure in the Amazon third-party seller world. He runs a consulting firm that advises entrepreneurs on how to sell their products on the online marketplace and deal with account unforeseen issues. Rosenberg, whose Facebook seller group ASGTG has more than 70,000 members, hosts a popular annual seller conference in his hometown of Brooklyn.
The case offers a glimpse into the cottage industry of consultants and brokers that has thrived with Amazon’s third-party marketplace. Since its launch in 2000, the marketplace has become a lucrative and highly competitive place for millions of sellers to sell their wares. According to statistics, from May 2019 to May 2020, the average sales of American SMEs in the market exceeded US$160,000. published report by Amazon.
While the marketplace has helped Amazon generate tens of billions of dollars in sales, it has also become a notorious home to counterfeit, unsafe and expired goods. Behind the scenes, scammers have been employing illegal tactics for years to overwhelm competitors, artificially boost their listings or get around Amazon’s marketplace rules.
The case is not the first time Amazon has dealt with the issue of company employees leaking confidential information or manipulating the website in exchange for payment. In 2018, the company investigated allegations that employees, primarily based in China, received payments worth between $80 and more than $2,000 in exchange for access to internal data, wall street journal The report said.
Amazon says it invests hundreds of millions of dollars each year to keep products safe and compliant.this terms Employees leaking internal data to sellers violates Amazon’s seller policies and code of conduct.
Rosenberg’s punishment was far less severe than the other defendants faced. A former Amazon employee was sentenced to 10 months in prison last year, while a consultant who also sells on Amazon was sentenced to 10 months in prison. Serving 20 months in prison.
Prosecutors are recommending a lighter sentence for Rosenberg because there is no evidence he launched the attack on rival product listings like some of his co-conspirators who allegedly filed false complaints with Amazon and purchased products for rival products. Fake negative reviews. In addition to the bribery scheme, other defendants also pleaded guilty to tax evasion charges.
Between July 2017 and September 2020, Rosenberg paid bribes, both directly and indirectly, to Amazon employees to steal confidential 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 third-party seller accounts.
Most of his payments were for account “notes,” or internal Amazon employee logs about breaches in seller accounts, which Rosenberg and another defendant, Joe Nelson, secretly referred to in email correspondence as “fruit.” “.
“Sellers who were suspended from selling on Amazon could use this inside information to learn exactly what Amazon knew about seller violations and tailor their reinstatement requests accordingly,” prosecutors said.
Nelson bragged to Rosenberg via email about the services he had obtained by bribing employees.
Nielsen wrote in a January 2018 article: “I don’t mean to make it look like we have all the power in the world, but despite taking some time and some face-to-face meetings, I’m still blown away by what we’ve acquired .” to Rosenberg, describing his inside contacts as “high-level ‘flick switch’ types.”
“I don’t want a little menu floating around, but if you need anything, just run it by me and I’ll let you know,” Nelson continued.
Rosenberg allegedly made “veiled threats” to an Amazon employee at the company’s Seattle headquarters as part of a bribery scheme, according to previously unsealed court documents. Bloomberg The report said. The documents also detail deliberate actions by the defendants to evade detection by authorities, including allegedly stuffing cash believed to be bribes into a llama-shaped footstool, according to Bloomberg.
Rosenberg’s guilty plea in March marked a shift in his position on the case. He has repeatedly denied prosecutors’ allegations and claimed he was set up in messages to CNBC on LinkedIn and in posts on Reddit forums and Facebook groups. He later admitted to making false statements about the case and admitted to bribing Amazon employees in a public apology posted online.
Rosenberg’s attorney, Jacob Laufer, wrote in the sentencing memo that while Rosenberg’s actions were illegal, they were a symptom of a marketplace dominated by Amazon, where merchants could be arbitrarily arrested at any time. driven out of the market and difficult to obtain business. Revert to status quo and turn to illegal tactics.
“Given these sellers are ignorant of their alleged misconduct, how to correct the problem, and when Amazon may recognize their error, sellers often become desperate and sometimes resort to illegal means to obtain the information. Their business,” according to the memo. “‘Necessary information’ is the comment.”
Dix said Amazon has processes in place to help sellers avoid deactivation and reinstate them when appropriate. She added that the company has invested in improving communication with sellers over the years, speeding up response times and more clearly calling out policy violations.
“Amazon did not commit fraud or resort to an excuse for illegal activities,” Dix said in a statement.