Shares of Amazon.com Inc. (NASDAQ: AMZN) inches up in early session on Friday as the well-known consultant for Amazon.com admitted guilt on Thursday to paying business personnel in a $100 million plan, according to the prosecution, to give online vendors a competitive edge.
The last of the five US-based defendants, Ephraim “Ed” Rosenberg, was accused of bribing Amazon workers in exchange for secret corporate information that, among other things, helped them route customers to specific merchants and eliminate their rivals.
Two of the previous four defendants who entered guilty pleas were given jail sentences. One former Amazon employee who reportedly took bribes and now resides in India was charged but never brought to court.
The scam, which started in 2017, seemed like it was straight out of a Hollywood film, with money being transmitted around the world via MoneyGram, PayPal, and bags filled with cash sent via Uber.
In a LinkedIn post on Monday, Rosenberg, 47, expressed regret for his behavior, contradicting past claims that he was innocent. The most well-known of the defendants, he organized networking meetings in his native New York for Amazon sellers and also manages a Facebook page with 10,000 followers that offers advice on selling on Amazon.
Rosenberg said that “on several occasions, I paid bribes, directly and indirectly, to Amazon workers.” These activities were illegal. A seller who was banned from Amazon’s website spent $200,000 to obtain justice.
Federal authorities accused Rosenberg and other consultants in 2020 of paying more than $100,000 in bribes to Amazon employees in India to give a few Amazon merchants an edge over rivals selling commodities ranging from electronics to nutritional supplements.
Customer reviews and Amazon’s algorithms continue to direct customers to the greatest items available at the lowest rates. The bribery scam demonstrated how workers of the corporation may game the system to get extra cash. Former Amazon employee and consultant Chris McCabe recommended that the business check its own staff to ensure they are not accepting bribes and be more open about the measures it takes to uphold site policies.
According to McCabe, a specialist in assisting businesses challenge account suspensions, “a dangerous precedent has been created.” “Amazon employees are aware that selling inside knowledge may be a lucrative side business.”
A spokesman for Amazon, Mira Dix, said that the corporation alerted law authorities to the scam and assisted with the investigation.
She stated, “We have teams who investigate, halt illegal activities, and proactively disclose this information to law enforcement and the necessary authorities. We have sophisticated mechanisms in place to detect suspicious behavior that we continually improve upon.
