Amazon arbitrage, money laundering edition

by on February 24, 2018 at 1:54 am in Books, Economics, Law, Web/Tech | Permalink

The impersonator priced the book at $555 and it was posted to multiple Amazon sites in different countries. The book — which as been removed from most Amazon country pages as of a few days ago — is titled “Lower Days Ahead,” and was published on Oct 7, 2017.

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.”

Reames said the books he has sold on Amazon under his name were done through his publisher, not directly via a personal account (the royalties for those books accrue to his former employer) so he’d never given Amazon his Social Security number. But the fraudster evidently had, and that was apparently enough to convince Amazon that the imposter was him.

Here are additional points of interest, as the practice is more common than you might have thought.  Via the estimable Chug.

1 Ray Lopez February 24, 2018 at 2:46 am

Interesting, it’s like the obverse of those ‘rare’ Amazon signed hardback books that list for $10000 each. Or, why not just list the book for $100k and sell one copy? I guess because the stolen credit cards won’t support such a high purchase price.

Bonus trivia: my Mastercard allows me to make up to $20k USD purchases on a single transaction. One of the benefits of being in the 1%. What’s in your wallet?


2 A Russian Bot February 24, 2018 at 10:41 am

What’s in your wallet

Ray’s Mastercard.


3 Nick M February 24, 2018 at 12:25 pm

“[…]up to $20k USD purchases on a single transaction. One of the benefits of being in the 1%.”

I doubt someone in the 1% would be aware of the transaction limit, or that it would be so low relative to their likely annual earnings. If it is that low it has everything to do with fraud prevention and not income level. I’m nowhere near the 1% and have a similar limit.


4 Dan Lavatan February 24, 2018 at 11:25 pm

Yeah I assume the limit is close to the overall limit and it is not because of income but the amount of unsecured credit outstanding. Does anyone know how to get it above 30k on a 2% cash back card?


5 Chucks March 3, 2018 at 10:58 pm

“I doubt someone in the 1% would be aware of the transaction limit,”

I mean I’m in the 1%. It ain’t a high barrier. My highest card has a $50k CL. I don’t know every card’s limit, but even living a 1%ers lifestyle it’s relatively uncommon to drop five figures on a CC purchase, maybe a handful a year.


6 clockwork_prior February 24, 2018 at 3:46 am

Who needs bitcoin?

Besides, didn’t Gingrich try to do things approximately the same way?

‘Exactly two weeks before taking over as speaker of the House, Newt Gingrich yesterday sewed up a two-book deal worth in excess of $4 million. Nearly all of the money is for a nonfiction book that will articulate his political vision. He will also edit a political anthology.

The books will be published by HarperCollins, a New York firm that has enjoyed great success with a number of volumes by conservative figures, notably Dan Quayle and Oliver North. Gingrich’s book is tentatively titled “To a New America.”

The deal was brokered by New York agents Glenn Hartley and Lynn Chu, who approached Gingrich last summer. None of the parties involved would confirm the $4 million figure, which was obtained from several publishing sources.

While politicians frequently write books in office, they rarely receive substantial advances. Gingrich, for instance, got $15,000 last year for a novel. The nonfiction “Window of Opportunity,” his first book, earned him $10,000 in 1984.’

No, not those book deals, this was one – ‘Gingrich says he coauthored “Window of Opportunity” with his wife and David Drake, but the book jacket’s “about the author” note is about Gingrich alone. (The cover reads, “By the honorable Newt Gingrich, chairman of the congressional space caucus, with David Drake and Marianne Gingrich.”) The original manuscript of “Window” was regarded as such an editorial disaster at Baen Publishers that two editor-writers were summoned for a rescue effort. Janet Morris, who did the final editing, said, “We took out many inflammatory and ill-considered Southern regional positions — such as 400 references to secular humanism.” Morris says she wrote the chapter on space, which has received some praise by experts. The promotional backers — among them beer billionaire Joseph Coors — invested “in a business venture,” says Gingrich. However, some have told reporters they had not expected to make a profit. The book would have had to sell 50,000 more copies for the partners to have recouped their initial investment. As it turned out, the book partnership lost more than $100,000 during the book’s first five years, and investors got tax write-offs.’


7 TMC February 24, 2018 at 9:21 am

So nothing alike then. Thanks for sharing though.


8 John J February 24, 2018 at 9:40 am

The Clintons, so far, raked in $23 million in book advances. Bill got $15 million, Hillary only $8 million although she is currently negotiating a much larger advance on her latest.

The advances are political gifts. No need to show a profit on actual sales, that’s not what it’s about.


9 Careless February 25, 2018 at 1:57 pm

But all peanuts compared to Obama.


10 John February 24, 2018 at 4:54 am

Money laundering would easily be resolved by legislatures allowing transactions to be traced through as many steps as necessary to get back to the crime. Instead of which they impose regulations on citizens that make life more difficult, spread fear and mistrust, and don’t really work. I wonder why 🙂

Incidentally, assuming this is about a crime, isn’t Amazon’s employee who wouldn’t release details that may identify the criminal acting in collusion, whether intentional or not?


11 ChrisA February 24, 2018 at 1:53 pm

A certificate of beneficial ownership required for all transactions would be a good solution to this problem, sort of similar to the way VAT works in Europe – basically the seller has to have the beneficial owner who they bought from clear before they can sell. They are introducing this process in the UK now for housing, it is starting to cause a big property crash in London as the overseas buyers are dropping out as they don’t want to be identified. The certificate could be provided either by a reputable law firm, bank or accountancy firm, with penalties on those firms if the certificate proves to have been falsified.


12 raj February 24, 2018 at 6:55 pm

What a facile argument. Transactions are not traceable unless you impose regulations on money transmitting businesses (eg. KYC, reporting requirements).


13 rayward February 24, 2018 at 6:54 am

Wouldn’t it be rich if Amazon were caught engaging in a scheme to sell fake books; after all, Amazon gets to keep 40% of the sales price. What is a “fake” book? If it has a cover and pages with writing on it, does that count as a “book”, even if the writing is nonsense? It must, because there are hundreds if not thousands of those “books” that are sold on Amazon every year.


14 John February 24, 2018 at 7:23 am

It would seem that this book of random numbers fills the bill:

Of course when first published it did have a purpose, now rendered obsolete by electronics and computers.

But there is no reason why someone should not either use a computer, or maybe better a random noise source such as a back biased diode or transistor providing “pure” ransom noise, and publish another one at whatever price he liked. Make it a limited edition, to add some excitement to the marketing. A CD, DVD or BluRay with random noise recorded on it would be a similar “product”. Or stream random noise on the Internet and sell subscriptions for people to connect to the stream.

A bit like the enormous legal document in an episode of “Madam Secretary” where it was said that the only person who read it was the person that wrote it.


15 Bob February 24, 2018 at 9:58 am

It’s not really money laundering: It would be one step in laundering if the cards were bought at the store with “black money”. A money launderer never needs to steal.

Instead, this is a very well defined kind of fraud called card cashing: Extraxtion of money from stolen cards. A common way to do this is just to buy gift cards with your stolen credit cards, or at least something easy to resell. The next level, where you will get caught, is to pretend to be a merchant and buy your own merchandise. Normally you would be trying to cheat Braintree, Stripe or someone like that. Maybe be bold, work at a physical store, and buy from there with the fake. But Amazonia now a marketplace too, so you can try to do it to them too, although with oops you are losing more money to their cut, in exchange of somewhat cleaner money: In practice though, it is risky and hard to cash from a real identity, so you need to do actual laundering afterwards.


16 Careless February 25, 2018 at 2:02 pm

“card cashing” is obviously a form of money laundering, which encompasses all attempts at making illegal money safe to use.


17 Mike February 25, 2018 at 5:53 pm

Several months ago I saw 3 very well dressed women walk into a grocery store in Austin, TX split up and then each buy what looked like $1K worth of gift cards each. Cashiers didn’t blink. On a whim I followed their rental car, driven by a fourth women, down the block to another store where they repeated it. At that point I called 911 reported what I saw and gave them the license plate #; police didn’t even want to take a report and asked me what the crime was!!!! Sent an email to the grocery store’s security department (Randall’s) and they never even replied.

Makes me think that a live of crime might not be all that bad 😀


18 Jon February 26, 2018 at 1:46 pm

Or they could just be points and miles enthusiasts… gift cards can be a big part of the game


19 A clockwork orange February 24, 2018 at 10:54 am

In almost all world religions money laundering is a crime. In Hinduism, a money launderer wanders the earth. The incentives are wrong, religions! You need to let them off the work. Money laundering is not the problem, it is simply the being alive that corrupts. Steal books I say, books should not cost money.


20 Mark Thorson February 24, 2018 at 1:40 pm

Wouldn’t Abbie Hoffman still have collected royalties from stolen copies of Steal This Book?


21 Dan Lavatan February 24, 2018 at 11:28 pm

Again, can you maybe quote a bit more. Wandering the Earth sound fun. It is a nice planet, especially compared to Venus.


22 Chris February 24, 2018 at 4:33 pm

Great article! Never had much luck with amazon, might have to give it another shot! Anyone serious about making money should definitely check out Affilorama. It teaches you how to make serious money online with affiliate marketing. I quit my job and now I make ALOT more money all online 🙂

Heres a really good review of affilorama:

Keep up the great content! 🙂


23 John J February 24, 2018 at 5:21 pm

Check the link. Follow the formula. Before you know it you will have Rosie O’Donnell in the back of your boat.


24 Ryan February 24, 2018 at 6:26 pm

Pretty much any time you see something sell at grossly exaggerated value on the internet it is likely to be money laundering. You used to see nonsensical e-bay transactions many years ago, and I suspect that some of the less credible kickstarters have been money laundering as well.


25 Mike February 25, 2018 at 5:44 pm

I keep an eBay watchlist that has some very obscure items. These lead me to similar things on eBay on a relatively frequent basis. Obscure items that are hard for non-specialists to price selling for 10x their real value. Seems like a pretty safe way to launder money.


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