Monday, May 27, 2024

Amazon has accused an international organization, including customers and several former employees, of conspiring to steal millions of dollars in online products through fraudulent refunds.

In a lawsuit filed Thursday in the U.S. District Court in Seattle, the online retailer accused the group, called REKK, of perpetrating the fraud between June 2022 and May 2023. The lawsuit includes more than 20 named defendants and 20 unnamed individuals.

According to the suit, REKK is a large player in an underground industry of fraudsters who “have created illegitimate ‘businesses’ offering fraudulent refunds to individuals around the world who are knowingly engaging with and participating in the fraud” to get expensive products for free.

The 44-page complaint said that REKK marketed itself through social media channels like Reddit and the encrypted messaging app Telegram as a paid service that allowed users to buy products from online retailers and pretend to return them, keeping both the product and the refund.

In the suit, Amazon said that more than a dozen fraudulent refunds were issued from June 2022 to May 2023 for expensive items including laptops, gaming consoles, and a 24-karat gold coin, and that at least seven former Amazon employees — described as “insiders” — accepted thousands of dollars in bribes to process reimbursements for products that were never returned.

REKK impersonated Amazon customers, used phishing messages to obtain credentials, manipulated systems through unauthorized access, and bribed employees to grant refunds, according to the suit. The employees, Amazon said in the filing, gave more than $500,000 worth of fraudulent returns.

REKK did not immediately respond to a request for comment sent to the group’s Reddit page. As of Saturday, its Telegram channel had been shut down.

In the complaint, Amazon included screenshots that appeared to show REKK spelling out the fraud in advertisements on social media and bribing Amazon employees to carry it out.

“To put it simply, refunding is when you buy a product and then trick the company into thinking you have returned the product,” a user explained on the REKK Refund Service subreddit, according to a screenshot in the complaint.

“This lawsuit serves as a clear and strong message to bad actors that Amazon will not stand for attempts to damage the integrity of our store,” Dharmesh Mehta, a vice president at Amazon, said in a statement.

The company said it had assisted law enforcement by providing evidence that contributed to indictments of other illegal refund groups.

In September, Sajed Al-Maarej of Dearborn, Mich., was indicted by the U.S. Attorney’s Office for the Western District of Washington for conspiracy and wire and mail fraud in a $3.9 million refund scheme that defrauded retailers including Amazon.

In October, an indictment in the Northern District of Oklahoma charged 10 men with conspiring to steal goods for themselves and others through refund fraud that amounted to millions of dollars of losses for Amazon, Wayfair, and other online retailers.

In the REKK case, Amazon has asked for financial restitution and for the defendants to be barred from affiliation with the company, including via shopping on Amazon.

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