There seems to be an emerging niche of young at-home hackers and cybercriminals looking to make big bucks by taking advantage of Amazon’s ultra-generous return and merchandise replacement policy. It seems as if the megacorporation is an especially enticing target due to the fact that it’s a money-making machine. After all, just a little while ago, the company reached $1 trillion in valuation.
Earlier this month, 24-year-old Joseph Sides of Boca Raton was taken to trial on federal charges of wire fraud, mail fraud, and conspiracy to commit mail fraud. According to his arraignment, “Between March 2016 and June 2018, Sides created approximately 501 Amazon accounts using false names, multiple e-mail addresses, and altered shipping addresses to place approximately 1227 orders.” Then by lying and saying that the merchandise never came or was broken, he was able to acquire $229,391.42 in merchandise, replacements, and refunds. He pleaded not guilty, but if he’s held responsible he could face up to 20 years in prison for each charge.
Last year, a couple from Indiana, Erin and Leah Finan, pleaded guilty to cheating Amazon out of $1.2 million by using fraud to receive over 2,700 replacement items, the majority of which were electronics. Erin was sentenced to 71 months in prison on May 29, and Leah was sentenced to 68 months.
Indiana married couple Leah and Erin Finan defrauded Amazon of $1.2 million by getting free replacements for items they said were damaged, only to keep both. They have learned their punishments: https://t.co/PngDdE4Mfg pic.twitter.com/xvIDXophPl— Law & Crime (@lawcrimenews) June 12, 2018
In many ways, these new online schemes are just a more complicated evolution of other retail cons taking place during the modern era. “In the old days, you would shoplift something from a department store and then go to a different department store belonging to the same company and return the item,” Michael Benza, a criminal law professor at Case Western Reserve University, told Vice. “It’s the same type of scam—criminals are just doing it digitally instead of physically going to a store.”
“To most people, $230,000 is a lot of money, but for Amazon, it probably doesn’t do anything to hurt its stock price,” he added. “However, if a very large number of customers do this to Amazon, the company will see a lot of money going out the door. I imagine in this case, Amazon got involved to send a message to cybercriminals.”
You can scam the fuck out of the Amazon returns, half the time they don't even ask for you to send the products back— Brickhouse Benny (@PjFlexington) October 17, 2018
It’s likely that Amazon gave investigators data mined from its transactions in order to catch these cybercriminals. As per Sides’s arraignment, “This case resulted from an investigation by the Florida Department of Law Enforcement and the United States Postal Inspection Service with assistance from Amazon.com.”
The director of security research for cybersecurity firm Jask, Red Soto, told Vice that online returns schemes have become one of the quickest growing scams on the Internet. “Some involve sophisticated groups that purchase programming scripts on the dark web that allows them to automate the creation of fake profiles and follow certain items to purchase,” Soto said. “It’s a lot easier to catch one person, but when you have 30 people placing orders at different times and sending items to different addresses [and] foreign countries, it is a lot harder to track down.”
The report for Amazon’s Q3 earnings this year has yet to be released, but if its historic Q2 profits totaling $2.5 billion are any indication, it’s doing just fine. “Regarding impact on Amazon’s bottom line, the retail side of the business is not the real profit center, it’s the Amazon Web Services side,” Soto said. “The company expects some minimal level of losses from fraud or abuse of the liberal return policy and they largely mitigate that from the enormous volume of sales there.”
What do you think of this story? Are these people self-seeking modern-day Robin Hoods, stealing from the uber-rich to give to themselves? Are their punishments adequate? Would you ever do it? Let us know in the comments down below!