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Financial Crime: ‘This feels like a scam’: Third-party seller admits to stealing $1.3 million from Amazon in elaborate fake sale-and-refund fraud

It was a solid-gold scam with an iron bar ending.

A third-party seller on Amazon.com has pleaded guilty to running an elaborate refund scam that ripped the online retail platform off to the tune of $1.3 million, which he then used to buy gold and silver bars.

Ting Hong Yeung, 41, of Hacienda Heights, Calif., admitted he had created multiple seller accounts on Amazon
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and had run the scam, in which he would offer high ticket items but never ship them, dating back to 2013.

Prosecutors said Yeung had figured out a way to game Amazon’s system for paying third-party vendors to make sure the cash from phony sales would land in his accounts before an angry buyer would request a refund.

Yeung faces up to 20 years in prison when he is sentenced in April. Prosecutors say he has agreed to pay restitution, partly out of the stacks of gold and silver bars that were seized from his home when he was arrested. 

A message sent to Yeung’s attorney wasn’t immediately returned. 

The ol’ bait and switch

According to court documents, Yeung would create the seller accounts and run them normally for a time so they would eventually be cleared to sell more expensive products. He would then offer high-cost furniture and home-decor items for prices lower than other sellers on the site.

When a buyer ordered the item, the money would be held in Yeung’s Amazon seller account for up to two weeks. He would then enter a phony tracking number which allowed the payment to ultimately be processed, prosecutors said.

Eventually, when the buyer would complain that the item hadn’t been delivered, Yeung would reply with messages saying shipment had been delayed or with some other explanation that would cause the buyer to not immediately file for a refund through Amazon’s system.

That would allow enough time for Amazon to deposit the money into Yeung’s bank account, prosecutors said. When the buyer would eventually file for a refund, Amazon would see there was not enough money in Yeung’s seller account to fulfill the refund, so the company would pay the buyer back themselves under the terms of their A-to-Z guarantee program.

In some instances, Yeung admitted sending cheap crystal ornaments to buyers to both generate a tracking number and as part of the effort to postpone the filing of a refund request.

““This feels like a scam.””

— Message from one buyer in 2020, according to court documents.

“Hello. I have received a crystal ornament and a note saying my couch will arrive March 6th-18th. Please advise why the product I ordered has been labeled as “Delivered” when I have yet to receive the item that I have purchased. This feels like a scam. Thank you,” one buyer wrote to Yeung in 2020, according to the court filings.

“Hi. How we are scam? Your order ship day is Mon. March 2, 2020 to Fri. March 6, 2020. Deliver by: Fri/ March 6, 2020 to Wed. March 18, 2020. May I know, do you want a full refund?” Yeung replied.

In some other instances, prosecutors said Yeung would use stolen credit-card information to purchase the actual items that he had promised buyers from other vendors. He shipped them to the buyer and collect the purchase price. But he would then request a refund on the item he had bought saying it was not what he ordered or was damaged. He would then send back a different, cheaper item and collect the refund too.

In all, investigators say Yeung stole $1.3 million from Amazon over seven years. 

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