It was a solid gold scam with an iron bar ending.
A third-party seller at Amazon.com has pleaded guilty to staging an elaborate refund scam that ripped off the online retail platform for $1.3 million, which he then used to buy gold and silver bars.
Ting Hong Yeung, 41, of Hacienda Heights, California, admitted to creating multiple seller accounts on Amazon AMZN,
and ran the scam, in which he offered high-priced items but never shipped them, dating back to 2013.
Prosecutors said Yeung figured out a way to circumvent Amazon’s system for paying third-party vendors to ensure money from fake sales landed in his accounts before an angry buyer demanded a refund. .
Yeung faces up to 20 years in prison when sentenced in April. Prosecutors say he agreed to pay restitution, in part from piles of gold and silver bullion that were seized from his home when he was arrested.
Yeung’s attorney declined to comment.
The old bait and the switch
According to court documents, Yeung would create the sellers’ accounts and normally manage them for a period of time so that they would eventually be allowed to sell more expensive products. He would then offer expensive furniture and decorative items at lower prices than other sellers on the site.
When a buyer ordered the item, the money was held in Yeung’s Amazon seller account for up to two weeks. He would then enter a fake tracking number that would allow the payment to be ultimately processed, prosecutors said.
Eventually, when the buyer complained that the item was not delivered, Yeung would respond with messages that the shipment was delayed or some other explanation that would prevent the buyer from immediately requesting a refund through the system. from Amazon.
That would give Amazon enough time to deposit the money into Yeung’s bank account, prosecutors said. When the buyer eventually asked for a refund, Amazon would see that there was not enough money in Yeung’s seller account to make the refund, so the company would refund the buyer itself under the terms of their A to Z warranty program.
In some cases, Yeung admitted to sending cheap crystal ornaments to buyers both to generate a tracking number and as part of efforts to defer filing a refund claim.
““It looks like a scam.””
“Hello. I received a crystal ornament and a note that my sofa will arrive March 6-18. Please advise why the product I ordered was labeled as ‘delivered’ when I have not yet received the item I purchased. Looks like a scam. Thanks,” a buyer wrote to Yeung in 2020, according to court documents.
“Hi. How are we scamming? The ship day for your order is Mon 2 Mar 2020 to Fri 6 Mar 2020. Deliver by: Fri/ 6 Mar 2020 to Wed 18 Mar 2020. Can I know, do you want a full refund?” Yung replied
In other cases, prosecutors said Yeung would use the stolen credit card information to buy the actual items he promised buyers from other sellers. He sends them to the buyer and collects the purchase price. But then he would ask for a refund on the item he bought saying it was not what he ordered or it was damaged. He would then send a different, cheaper item back and also receive the refund.
In total, investigators say Yeung stole $1.3 million from Amazon over seven years.
When Amazon detected evidence of fraud, the company referred the case to law enforcement.
“There is no place for fraud at Amazon. We will continue to investigate fraud to protect our customers and business partners and hold bad actors accountable,” the company said in a statement. “Amazon is grateful to law enforcement for their thorough pursuit of this matter.”