Third-Party Seller Admits Fleecing Amazon Out of $1.3M

Department of justice, californai, amazon, third part seller, wire fraud

A third-party seller on Amazon could face up to 20 years in federal prison for fleecing the eCommerce giant out of more than $1.3 million, according to a statement from the U.S. Department of Justice (DOJ) U.S. Attorney’s Office, Central District of California.

Ting Hong Yeung, 41, of the Los Angeles suburb of Hacienda Heights, California, admitted to defrauding Amazon in a seven-year scheme that involved manipulating the company’s payment system. 

The scheme involved Yeung receiving payment for merchandise he listed for sale but never actually shipped to buyers. He has agreed to plead guilty to one federal wire fraud charge on a date to be determined, according to his plea agreement.

Amazon distributes payments to third-party sellers’ bank accounts approximately every two weeks after merchants provide tracking numbers for proof of shipping.

Under various business names including Speedy Checkout, Special SaleS and California Red Trading Inc., Yeung would list higher-priced merchandise like furniture and home décor at deep discounts. Instead of shipping items to customers, he supplied Amazon with fake tracking numbers, according to the DOJ. 

When customers complained about not receiving the merchandise, Yeung put off refunding people “long enough to ensure that Amazon would disburse funds into his businesses’ bank accounts.” Yeung relied on Amazon’s A-to-z Guarantee, which refunds unhappy customers.

Yeung also sometimes sent merchandise to customers that he purchased from Amazon using credit cards with other people’s identities and false identities. He then requested refunds for the goods from Amazon under the claim that the merchandise was different than ordered. 

“As a result, Yeung received both the refund and the proceeds of the original sale to his own customer,” according to the statement.

Yeung agreed to pay restitution. Some will be paid using gold and silver bars seized during a search of Yeung’s home last month. He is expected to make an appearance in court on April 12.