Federal prosecutors described an unusual scheme that involved leveraging a company’s subscription program to allegedly commit fraud on Amazon and eBay. Two brothers were charged with fraud involving the online sale of cosmetics and pleaded guilty last year, and this year they received sentences of 2 months and 6 months, respectively.
According to the DOJ’s press release announcing the sentencings, the brothers offered cosmetics on their Amazon and eBay stores for one-time payments. They then enrolled the Amazon and eBay buyers in the cosmetic company’s 30-day trial program for the same products.
The brothers allegedly entered the buyers’ information and presented the cosmetics company with forms of payment that fulfilled initial charges of $19.95, without the customers’ knowledge or consent, but the charges were declined when the company attempted to charge later installments, after buyers had kept the products past 30 days.
“The brothers sold the company’s products in this manner to hundreds of buyers on Amazon and eBay, each time pocketing the difference between what the buyers paid them and the initial $19.95 upfront payment to the company,” according to the government press release.
One brother was ordered to pay $115,037 in restitution and forfeiture of $67,000. The other was ordered to pay $181,806 in restitution and forfeiture of $111,156.