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prominent Amazon The consultant avoided jail time for participating in an elaborate scheme to bribe company employees to give his clients the upper hand in the sprawling online retail market.
Ephraim “Ed” Rosenberg pleaded guilty in March to a felony charge, stemming from a September 2020 indictment that charged him with conspiracy to pay bribes to Amazon employees in exchange for classified information that would benefit third-party merchants selling goods on the company’s marketplace. .
On Friday, a federal court sentenced Rosenberg to two years of probation and 12 months of house arrest. He was also ordered to pay a fine of $100,000.
Rosenberg, 48, is a well-known figure in the world of Amazon third-party sellers. He runs a consulting firm that advises entrepreneurs on how to sell products in the online market, and deal with unexpected issues with their accounts. Rosenberg’s Facebook seller group, ASGTG, has more than 70,000 members and hosts a popular seller conference each year in his hometown of Brooklyn.
The case provides an unfiltered glimpse into the cottage industry of advisors and brokers that has blossomed along with the growth of Amazon’s third-party marketplace. Since its launch in the year 2000, the marketplace has become a profitable and competitive platform for millions of sellers to market their wares. From May 2019 to May 2020, small and medium-sized businesses in the United States averaged more than $160,000 in sales, according to A report was issued From Amazon.
Although the marketplace has helped Amazon rack up tens of billions of dollars in sales, it has also become a notorious host of counterfeit, unsafe, and expired goods. Behind the scenes, scammers have for years resorted to illicit methods to crush competitors, artificially boost their listings, or bypass Amazon’s marketplace rules.
This is not the first time that Amazon has dealt with issues of company employees leaking confidential information or manipulating the site in return for payments. In 2018, the company investigated allegations that employees, primarily based in China, who had been paid $80 to more than $2,000 in exchange for access to internal data, The Wall Street Journal mentioned.
Amazon said it invests hundreds of millions of dollars annually to ensure products are safe and compliant. the livelihood Internal data to sellers by employees violates Amazon’s Seller Policies and Code of Conduct.
Rosenberg’s punishment is far less harsh than what other defendants faced. A former Amazon employee was sentenced last year to 10 months in prison, while he was a consultant who also sold products on Amazon. He is serving 20 months in prison.
Prosecutors recommended a lighter sentence for Rosenberg because there was no evidence that he made attacks on competitors’ product listings like some of his co-conspirators, who had allegedly made false complaints to Amazon, and purchased fake negative reviews of competitors’ products. Other defendants also pleaded guilty to tax evasion charges in addition to the bribery scheme.
Between July 2017 and September 2020, Rosenberg paid bribes directly and indirectly to Amazon employees in order to steal confidential data, as well as gain access to internal systems. In one case, Rosenberg made 33 different PayPal payments of $18,650 to an Amazon employee in Seattle in exchange for confidential information about the seller’s offshore accounts.
Most of his payments were for account “annotations,” or an internal Amazon employee wrongdoing record on the seller’s account, which Rosenberg and another co-defendant, Joe Nielsen, privately referred to as “the fruit” in email correspondence.
Prosecutors alleged: “Sellers who have been suspended from selling on Amazon can use this inside information to learn exactly what Amazon has found about sellers’ wrongdoing and to tailor their appeals for reinstatement accordingly.”
Nielsen bragged to Rosenberg via email about the favors he had obtained by bribing employees.
“I’m not trying to make it sound like we have all the abilities in the world, but even though it took some time and some face-to-face encounters, we got abilities that still amaze me,” Nielsen wrote in January 2018. He emailed Rosenberg, referring to his internal contacts as “high-type guys.”
“I don’t want to have a small menu but if you need anything, just run it by me and I’ll tell you,” Nielsen continued.
Previously undisclosed court documents stated that Rosenberg sent a “veiled threat” to an Amazon employee at the company’s Seattle headquarters as part of a bribery scheme, bloomberg mentioned. The documents also detailed the defendants’ efforts to evade detection by authorities, including allegations of stuffing a llama ottoman with money believed to be bribes, according to Bloomberg.
Rosenberg’s guilty plea in March is a reflection of his stance on the case. He has repeatedly denied prosecutors’ allegations and claimed in LinkedIn messages to CNBC that he was filmed, as well as 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 note that while Rosenberg’s behavior was unlawful, it was symptomatic of a market ruthlessly ruled by Amazon in which merchants could be arbitrarily kicked out of the marketplace at any time, struggling to get their business. . I was reinstated, and turned to illegal tactics.
“Because these sellers were not informed about their alleged wrongdoing, how to correct the problem, and when Amazon might realize their mistake, the sellers were often desperate and sometimes resorted to illegal means to obtain the information needed to achieve the savings goal,” according to the note. The necessary information is the annotations.
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