Tech

Former Amazon employee sentenced to 10 months in prison for involvement in bribery scheme

Key Points
  • A former Amazon employee was sentenced Friday to 10 months in prison for his involvement in an international bribery scheme.
  • Rohit Kadimisetty, who worked at Amazon for a year until 2015, pleaded guilty last fall to conspiring to commit bribery.
  • The DOJ alleged he and five other individuals bribed Amazon employees to receive confidential information on competitors, reinstate suspended listings and other benefits to gain "an upper hand" over other sellers on Amazon's online marketplace.

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Photographer: Thorsten Wagner/Bloomberg via Getty Images
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A former Amazon employee was sentenced Friday to federal prison for his involvement in an international bribery scheme.

Rohit Kadimisetty, who worked as a seller support employee out of Amazon's Hyderabad, India, office until 2015, was ordered to spend 10 months in prison after he admitted he conspired to commit bribery across state and national borders. Kadimisetty was also ordered to pay a $50,000 fine and undertake three years of supervised release.

Kadimisetty is one of six individuals who the U.S. Department of Justice charged with conspiracy for allegedly bribing Amazon employees to gain an "upper hand" over other sellers on Amazon's online marketplace. In addition to Kadimisetty, the group of individuals included seller consultant Ed Rosenberg, Joseph Nilsen, Kristen Leccese, Hadis Nuhanovic and Nishad Kunju, who was employed by Amazon in India until 2018.

Between late 2017 and 2020, these people allegedly bribed Amazon employees to leak information about the company's search and ranking algorithms, as well as share confidential data on third-party sellers they competed with on the marketplace. The scheme also involved bribing employees to reinstate suspended accounts and defacing competitors' product listings, the DOJ alleged in its indictment.

In all, the individuals allegedly paid $100,000 worth of bribes to employees and reaped more than $100 million in competitive benefits, the DOJ said.

In 2018, Amazon fired four employees in India who were allegedly connected to the bribery scheme, including Kunju and three people not identified in court filings.

Amazon launched the online marketplace in 2000, allowing a wide variety of third-party businesses, from small to global, to sell on its site. It has since grown to encompass millions of sellers and now accounts for roughly 60% of Amazon's overall retail sales.

While the marketplace has helped Amazon haul in record revenue, it has also been found to host counterfeit, unsafe and expired goods. Behind the scenes, scammers have for years resorted to black hat tactics to squash competitors, artificially boost their listings or bypass Amazon's marketplace rules.

Amazon has said it invests hundreds of millions of dollars per year to ensure products are safe and compliant.

Judge Richard Jones said in Friday's sentencing hearing in U.S. District Court in Seattle that the activities were akin to "modern day organized crime."

"Mr. Kadimisetty used his knowledge and contacts from prior employment at Amazon, to enrich himself by manipulating listings on Amazon Marketplace," U.S. Attorney Nick Brown said in a statement. "He was a critical cog in the bribery wheel: paying contacts in India to reinstate suspended accounts, steal confidential information and attack competitors who got in the way of those funding the bribery scheme."

An Amazon spokesperson told CNBC in a statement that "there is no place for fraud at Amazon."

"We work hard to create a trustworthy shopping experience by protecting customers, selling partners, and Amazon from fraud and abuse, and we have systems in place to detect suspicious behavior," the spokesperson added.

Attorneys for Kadimisetty didn't respond to requests for comment.

Four of the other defendants, Rosenberg, Nilsen, Leccese and Nuhanovic are scheduled for trial in October. Kunju has yet to be arraigned on the indictment, the DOJ said.

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