Amazon.com, Inc. (NASDAQ: AMZN): On Friday, March 12, The U.S. District Court of Rhode Island sentenced Michael Chaves to 30 months in federal prison for operating a fraudulent product return scheme and defrauding Amazon of more than $50,000, as well as other charges including bank fraud, wire fraud, falsification of records, aggravated identity theft, and tax evasion. Amazon supported the investigation, prosecution, and sentencing.
Chaves pleaded guilty on August 22, 2020, to a ten-count information charging him with falsification of records, aggravated identity theft, five-counts of bank fraud, two-counts of wire fraud, and tax evasion.
Chaves was sentenced on Wednesday by U.S. District Court Judge William E. Smith to 30 months in federal prison to be followed by three years of federal supervised release.
A restitution order will be forthcoming from the court. In addition to restitution to be paid in the fraud schemes connected to the operation of his auto transport company, the order will include restitution to be paid by Chaves to Amazon. It was alleged in court documents that Chaves defrauded Amazon through theft of inventory through falsely represented returns. It is alleged in court documents that Chaves ordered products from Amazon and, at times, replaced the original products with lesser value replacements, often items different than the ones he originally ordered, before returning the packages to Amazon for refunds.
Chaves’ alleged Amazon refund scams were discovered during the investigation by Internal Revenue Service Criminal Investigation and U.S. Department of Transportation Office of Inspector General into Chaves’ auto transport company.
Statement from Amazon:
We work hard to build a great shopping experience and that includes a seamless, customer-friendly returns policy. Mr. Chaves abused our policy, and we took action to protect our selling partners, our store, and the experience for all customers. We are grateful to the United States Attorney’s Office for the District of Rhode Island in their thorough pursuit of this case.
Amazon has teams and systems in place to proactively detect, investigate, and stop suspicious behavior and prohibited activity.
You can see the full announcement from the U.S. Attorneys office here
Connect With Us And Other Small Business Owners
Please head over to our Facebook Group for Small Business Sellers and interact with other small business owners.