LOS ANGELES – A third-party seller on Amazon.com Inc. has admitted gaming the online retailer’s payment system in a scheme that defrauded the company out of more than $1.3 million, the Justice Department announced today.
Ting Hong Yeung, 41, of Hacienda Heights, was charged with wire fraud in an information filed today in United States District Court. In a plea agreement also filed today, Yeung agreed to plead guilty to the felony offense, which carries a statutory maximum penalty of 20 years in federal prison.
As described in the court documents, Amazon allows vendors – known as third-party sellers – to use its online retail platform to advertise items, make sales and communicate with customers. Ordinarily, when an Amazon customer purchases an item listed by a third-party seller, Amazon credits the third-party seller’s internal Amazon account for the amount of that purchase. About every two weeks, Amazon disburses into the seller’s bank account the proceeds of those sales for which the seller has provided proof that the items purchased have been shipped – namely, the shipment tracking numbers.
Yeung operated as an Amazon third-party vendor using business names including “Speedy Checkout,” “Special SaleS” and “California Red Trading Inc.” After enough time passed to allow his businesses to appear to be reputable vendors, Yeung would list expensive merchandise, such as…