Former Amazon employee sentenced to prison in international bribery scheme

A former Amazon employee was sentenced to 10 months in prison last week for his part in an international fraud and bribery scheme targeting Amazon.com and its online Marketplace.

Rohit Kadimisetty, is the first of six individuals that the U.S. Department of Justice (DOJ) charged last fall with conspiracy to bribe Amazon employees in order to receive confidential information on competitors, reinstate suspended listings and other benefits to gain “an upper hand” over other sellers on Amazon’s online marketplace.

Kadimisetty who worked at Amazon for a year until 2015, pleaded guilty in September 2021 to conspiring to commit bribery.

The other five individuals are seller consultant Ed Rosenberg, Joseph Nilsen, Kristen Leccese, Hadis Nuhanovic and Nishad Kunju. Four of the defendants are scheduled for trial in October 2022. The fifth located in India, has not been arraigned on the indictment.

Private Bribery

Following his employment at Amazon, and after relocating to the United States from India, Kadimisetty used his inside knowledge to recruit employees in India to misuse their employee privileges and access to internal information, systems, and tools.

Kadimisetty connected employees in India with other consultants and 3P sellers across the United States. Those 3P sellers sold a wide range of goods, including household goods, consumer electronics, and dietary supplements on Amazon’s multi-billion-dollar electronic commerce platform.

Kadimisetty acted as a middleman, assigning tasks on behalf of 3P sellers and negotiating and arranging bribe payments on behalf of corrupted Amazon insiders.

To hide his criminal conduct, Kadimisetty used deceptive email accounts, encrypted messaging services, and bribes through third parties.

The illicit services provided by Kadimisetty and the other defendants included: stealing confidential business information about Amazon algorithms; reinstating accounts and products that had been suspended; circumventing inventory fees for Amazon warehouses; falsifying claims for lost inventory; and facilitating attacks on competing sellers and product listings.

In his plea agreement, Kadimisetty admits being responsible for $100,000 in bribes paid to Amazon insiders during his active involvement in the enterprise. Kadimisetty left the conspiracy in late-2018, after a number of his contacts in India were fired by Amazon due to the misconduct.

Sentencing

Kadimisetty was sentenced on Friday to 10 months in prison and a fine of $50,000.

At the sentencing hearing U.S. District Judge Richard A. Jones said, “You do not have a license to steal from Amazon, …you were involved in illegal conduct…. This could be called modern day organized crime.”

U.S. Attorney Nick Brown said “He was a critical cog in the bribery wheel: paying contacts in India to reinstate suspended accounts, steal confidential information and attack competitors who got in the way of those funding the bribery scheme.”

Mr. Kadimisetty used his insider access and expertise for his own benefit and those of his co-conspirators. Not only did his actions break the law, but ultimately consumer confidence was shaken by calling into question fair play. Fortunately, the actions of law enforcement were able to stop this scheme” said Special Agent in Charge Donald Voiret, FBI Seattle.

The case is being investigated by the FBI, with assistance from the Internal Revenue Service-Criminal Investigations (IRS:CI), and the Department of Justice Office of International Affairs.

Some Compliance Thoughts

It is interesting to note that just recently Amazon was reported to be conducting an investigation against its legal representatives in India for allegedly bribing Indian government officials. A whistleblower within the company reportedly highlighted that Amazon’s legal representatives were bribing Indian officials. It is unclear whether these two matters are linked.

In this case however, we are not talking about bribery of foreign officials, but private/commercial bribery.

Once again, we are reminded that private/commercial bribery is alive and well within multinational organizations. Just this last year we reported on a similar fraud scheme at Nike, bribery at Netflix, and alleged bribery at BMW.

It is important when building anticorruption compliance programs to go beyond the common bribery to government officials controls and integrate properly the specific private bribery risk in your program.

Mitigating the risk of private bribery in compliance programs include appropriate risk assessments, supplier due diligence, appropriate policies and procedures, preventive controls and determining whether contract values are fair, and supplier whistleblowing programs.

Compliantly LLC is as a consultancy engaged in compliance that has been trusted by clients to provide advisory to mitigate fraud and corruption, including ,risk assessments, whistleblowing systemsdue diligencepolicies and training . Protect your company from fraud, contact us for more information on our compliance services.

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