Amazon Lawsuit Claims International Ring Stole Millions of Dollars in Fraudulent Refunds

Amazon Lawsuit Claims International Ring Stole Millions of Dollars in Fraudulent Refunds

Amazon has accused an international organization, including customers and several former employees, of conspiring to steal millions of dollars worth of products online through fraudulent refunds.

In a lawsuit filed Thursday in U.S. District Court in Seattle, the online retailer accused the group, called REKK, of carrying out the fraud between June 2022 and May 2023. The lawsuit includes more than 20 named defendants and 20 individuals anonymous.

According to the complaint, REKK is a major player in an underground industry of fraudsters who “have created illegitimate ‘businesses’ offering fraudulent refunds to individuals around the world who knowingly engage and participate in the fraud” to obtain free products. expensive.

The 44-page complaint says REKK marketed itself through social networks such as Reddit and encrypted messaging app Telegram as a paid service that allows users to purchase products from online retailers and intended to return them , retaining both the product and the refund.

In the suit, Amazon said more than a dozen fraudulent refunds were made between June 2022 and May 2023 for expensive items, including laptops, gaming consoles and a 24-karat gold coin, and that at least seven former Amazon employees – described as “insiders” – accepted thousands of dollars in bribes to process refunds for products that were never returned.

REKK impersonated Amazon customers, used phishing messages to obtain credentials, manipulated systems through unauthorized access, and bribed employees to issue refunds, according to the pursuit. Employees, Amazon said in the filing, gave more than $500,000 in fraudulent returns.

REKK did not immediately respond to a request for comment sent to the group’s Reddit page. On Saturday, his Telegram channel was closed.

In the complaint, Amazon included screenshots that appeared to show REKK describing the fraud in social media advertisements.

“To put it simply, refunding is when you buy a product and then trick the company into thinking you returned the product,” explained one user on the REKK Refund Service subreddit, according to a capture of complaint screen.

In another image showing parts of a text message exchange, REKK offered Janiyah Alford, a former Amazon employee named in the suit, $3,500 to scan the items as they were received and seal them well that they have never been returned.

According to the suit, Ms. Alford approved product returns for 76 orders at REKK’s request, leading Amazon to refund more than $100,000 to REKK users.

Ms. Alford said in an interview that she received text messages asking for help making the fraudulent returns, and that the messages included her home address and those of several relatives. She said she did not know who sent the messages, but considered them threats. The messages were not mentioned in the complaint.

“I only did it for one day,” she said, adding that she was fired by Amazon for her actions a few days later.

Ms. Alford said Saturday that she did not know she was named in the lawsuit.

The other six former Amazon employees identified in the lawsuit did not respond to requests for comment or could not be reached Saturday.

An investigation by the National Retail Federation, a trade association, and Appriss Retail, a company that fights retail fraud and theft, estimated that in 2022, around 10% of returned online purchases were deemed fraudulent. According to the survey, for every $100 of returned merchandise accepted, retailers lose $10.40 to return fraud.

Amazon said in its complaint that it spent $1.2 billion and employed more than 15,000 people and machine learning models to prevent theft, fraud and abuse.

The company detected unusual product return activity associated with REKK this year and exposed the scheme by having an investigator pose as a REKK user to purchase and then obtain a refund for an iPad without returning it.

After ordering the item, the investigator paid an upfront fee of several hundred dollars to a PayPal account, with the balance of the payment sent to REKK in Bitcoin once the fraud was completed.

REKK manipulated Amazon’s delivery information to show that the customer had refused delivery of the iPad, the company said in the lawsuit. Based on this information, Amazon issued a refund, while the investigator kept both the item and the money.

It was not immediately clear whether a police investigation against REKK was underway. The U.S. Attorney’s Office in Seattle did not respond to a request for comment.

“This lawsuit sends a loud and clear message to bad actors: Amazon will not tolerate attempts to undermine the integrity of our store,” Dharmesh Mehta, Amazon vice president, said in a statement. declarations.

The company said it helped law enforcement by providing evidence that contributed to indictments of other illegal redemption groups.

In September, Sajed Al-Maarej of Dearborn, Michigan, was indicted by the U.S. Attorney’s Office for the Western District of Washington for conspiracy and wire and mail fraud in a $3.9 million kickback scheme that defrauded retailers including Amazon.

In October, an indictment in the Northern District of Oklahoma accused 10 men conspired to steal merchandise for themselves and others through a redemption fraud that amounted to millions of dollars in losses for Amazon, Wayfair and other online retailers.

In the REKK case, Amazon sought financial restitution and a ban on the defendants having any affiliation with the company, including through purchases on Amazon.

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David B.Otero

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