The founder and CEO of a firm that offered consulting services to online sellers pleaded guilty today in a scheme to bribe Amazon employees to get their clients’ accounts reinstated and receive other beneficial treatment, according to the Department of Justice.
Joseph Nilsen (32) pleaded guilty to conspiracy to commit wire fraud, conspiracy to commit violations of the Travel Act, and filing a false tax return. Kristen Leccese (33) was Vice President for Nilsen’s firm and pleaded guilty to conspiracy to commit violations of the Travel Act.
The criminal case highlights the cutthroat competition among Amazon sellers and the despair to which the company’s practices can drive merchants who turn to consultants for help.
An Amazon spokesperson provided EcommerceBytes with the following statement: “We work hard to create a trustworthy shopping experience by protecting customers, selling partners, and Amazon from fraud and abuse, and we have systems in place to detect suspicious behavior. There is no place for fraud at Amazon, and we worked with the Department of Justice to hold these bad actors accountable. We will pursue all measures to protect our store from those who attempt to compromise its integrity.”
As we had reported in 2020, the Feds alleged that defendants paid bribes to at least ten different Amazon employees and contractors to delete negative product reviews from product listings and attempted to trick Amazon’s review-ranking algorithm into believing fraudulent product reviews had been posted by bona fide purchasers.
The government charged a total of six people in the scheme. Two defendants face trial in October – Ephraim (Ed) Rosenberg, of Brooklyn, New York, and Hadis Nuhanovic, of Acworth, Georgia. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In February 2022, defendant Rohit Kadimisetty was sentenced to ten months in prison and ordered to pay a $50,000 fine.
And defendant Nishad Kunju, of Hyderabad, India, has not been arraigned on the indictment.
According to the DOJ’s press release:
“In the two plea agreements, Nilsen and Leccese admit they conspired to pay bribes: to obtain confidential Amazon business information; to get suspended third-party sellers and product listings reinstated on the Marketplace; to circumvent Amazon restrictions and limitations on certain products; to gain access to restricted product categories by misrepresenting the source of goods; to manipulate customer reviews; and to surveil and attack other merchants and product listings.
“Nilsen also pleaded guilty to filing a false tax return. In 2018 and 2019 he failed to file tax returns on behalf of his Amazon consulting company, and in 2017 he filed a false tax return significantly underreporting his and his company’s actual taxable revenue. For tax year 2017, he admits the tax loss to the U.S. is $44,178.
“Conspiracy to commit violations of the Travel Act is punishable by up to five years in prison. Conspiracy to commit Wire Fraud is punishable by up to 20 years in prison. Filing a false tax return is punishable by up to three years in prison.”
Updated 5/17/2022 to include statement from Amazon.