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Money Laundering Via Author Impersonation on Amazon?

22 February 2018

From Krebs on Security:

Patrick Reames had no idea why Amazon.com sent him a 1099 form saying he’d made almost $24,000 selling books via Createspace, the company’s on-demand publishing arm. That is, until he searched the site for his name and discovered someone has been using it to peddle a $555 book that’s full of nothing but gibberish.

. . . .

Reames is a credited author on Amazon by way of several commodity industry books, although none of them made anywhere near the amount Amazon is reporting to the Internal Revenue Service. Nor does he have a personal account with Createspace.

But that didn’t stop someone from publishing a “novel” under his name. That word is in quotations because the publication appears to be little more than computer-generated text, almost like the gibberish one might find in a spam email.

“Based on what I could see from the ‘sneak peak’ function, the book was nothing more than a computer generated ‘story’ with no structure, chapters or paragraphs — only lines of text with a carriage return after each sentence,” Reames said in an interview with KrebsOnSecurity.

. . . .

Reames said he suspects someone has been buying the book using stolen credit and/or debit cards, and pocketing the 60 percent that Amazon gives to authors. At $555 a pop, it would only take approximately 70 sales over three months to rack up the earnings that Amazon said he made.

“This book is very unlikely to ever sell on its own, much less sell enough copies in 12 weeks to generate that level of revenue,” Reames said. “As such, I assume it was used for money laundering, in addition to tax fraud/evasion by using my Social Security number. Amazon refuses to issue a corrected 1099 or provide me with any information I can use to determine where or how they were remitting the royalties.”

. . . .

“I have reviewed numerous Createspace titles and its clear to me that there may be hundreds if not thousands of similar fraudulent books on their site,” Reames said. “These books contain no real content, only dozens of pages of gibberish or computer generated text.”

Link to the rest at Krebs on Security and thanks to Randall for the tip.


8 Comments to “Money Laundering Via Author Impersonation on Amazon?”

  1. Amazon has had problems vetting content on Createspace for a long time now. In 2015 I found a massive piracy scam going on.

    • Not just an Amazon problem I’m afraid. (and still more proof that every company and their kid brother should not be getting/using your SSN for anything other than your retirement data …)

  2. After reading the original article, seems obvious to me that Amazon knows very well its site is being used for money-laundering. It is profitable for Amazon as well, so they aren’t taking the steps they easily could (algorithms to find sales of vastly overpriced or nonsense books shouldn’t be hard to create) to sort this out.
    I thought it was especially telling that Amazon insists they really paid the (victim of identity theft) author, then refused to tell him the account numbers where the money went.

    • Please do recall that Amazon does have to follow the rules/laws just like everybody else. Which means they ‘can’t’ hand over info without a court order – even if you ‘claim’ it’s your account. (And in this case he’s claiming it actually belongs to someone else – this is where hiring a lawyer comes in because he can’t go after the fraudster himself.)

  3. Once again, one of the Four Horsemen of the Apocalypse screw over an author. Why do we trust them again?

    Alas, the IRS will want their % of that 1099 money, and he may have no way to get around it. I’d advise him to hire a lawyer now!

  4. I’m missing something here. How does the scammer collect the ill-gotten gains?

    Reames, the victim, presumably has a payment arrangement with CreateSpace — direct deposit, for instance. Money for his legitimate books would flow directly to him.

    Yet the fraudulent earnings show up on Reames’s 1099, but not in his bank account? How does that happen? Are Amazon’s procedures really that leaky?

    • 1. Be a member of organized crime.

      2. Have illicit money needing laundering.

      3. Have a name, address, and SSN list, through your illicit connections.

      4. Get an illicit credit card, using your illicit info, and send the bills to a mail drop useful to you.

      5. Start an Amazon account under the credit card.

      6. Write illicit book. Pay for copies with another illicit credit card in another name/SSN. Pay off that credit card with illicit cash needing laundering.

      7. Send your illicit author money into some kind of legitimate business, under yet another name.

      8. Suddenly your illicit money is legitimate income.

  5. I am so dense! HA!

    I suddenly remembered that I have seen books for sale, not just the ones filled with computer generated junk, but books offered by third party vendors on real books, but they want hundreds for their copies.

    These were books that were available for dollars, and it never made sense that they wanted hundreds.

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