A husband and wife team from Muncie, Indiana are facing criminal charges after swindling online retailer Amazon out of over $1.2 million’s worth of electronics.
Most retailers build in budgets for broken goods, theft and other losses. But because of the enormous volume of sales Amazon handles, the company seems to rarely investigate claims of unreceived or damaged items, either replacing or refunding to customers with no questions asked, Fortune reports.
Erin and Leah Finan took advantage of this system, turning it into a classic scam: buy items then report them damaged or missing. With this, they accumulated Microsoft Xboxes, GoPro digital cameras, Samsung smartwatches, Microsoft Surface tablets and more. They sold the products to Danijel Glumac, an accomplice who then resold the merchandise to an anonymous “New York entity,” a statement from the Department of Justice said.
For enormous online marketplaces such as Amazon, it’s often cheaper to replace items in complaints like these rather than start investigating. But the couple used hundreds of fake identities in grifting, and are now facing up to 20 years in prison for fraud and money laundering.
This kind of “return scam” is well known, both in hacking circles and among Amazon sellers who have been victims. Buyers on the site risk getting banned if they make too many missing or defective item claims, which the couple circumvented. They were finally caught by the Indiana State Police and the IRS.
In pleading guilty, the Finans waived the right to appeal the decision if they are sentenced to fewer than seven years and three months in jail, and must return $1,218,504 to Amazon.
According to authorities, the couple only made around $725,000 off their scam because there were difficulties in trafficking stolen goods across state lines, not to mention their use of a fence. While the Finans’ scheme appears to be a drop in the bucket for Amazon, the message is clear: don’t do it.
