SEATTLE (CN) — A federal judge in Seattle on Tuesday afternoon entered a default judgment against four former Amazon warehouse workers and the leader behind a fraud group called REKK to the tune of over $2.4 million for their respective roles in defrauding Amazon through false product returns.
The online retail company said the former employees approved over $400,000 in fraudulent returns and took a share of the profits.
Amazon accused a group called REKK, led by Domantas Radeckas of Lithuania, of offering fake refunds to Amazon users for a fee. The group advertised its services on messenger platforms like Telegram and used what Amazon described in its amended complaint as sophisticated methods to obtain the refund. In exchange for securing high-value products like iPads or other technology for their customers, REKK charged between 30% to 35% of the product’s cost, according to Amazon.
To secure the refunds, REKK used social engineering to manipulate customer service agents, phished Amazon employees, accessed internal systems without authorization and bribed Amazon insiders in charge of granting refunds, according to the company.
As a result, the Amazon customers got to both keep the product and the refund. The company sued REKK and certain employees in late 2023 in the U.S. District Court of Seattle.
Radeckas, the man Amazon identified as the leader of the scheme, waived service of the company’s amended complaint and failed to appear or respond in the case. The online retail giant accused Radeckas of not only running the operation but infringing on two of its trademarks.
In the Telegram channel, named “REKK,” Amazon said Radeckas used counterfeit versions of its trademarked logo to “confuse customers about the legitimacy of his services.”
REKK advertised it had refunded over 100,000 orders from retailers, including but not limited to just Amazon. U.S. District Judge James L. Robart ordered Radeckas to pay $2 million to the company, half accounting for statutory damages from infringing its trademark and the other for actual damages.
The George W. Bush appointee also enjoined Radeckas from using or creating any online messaging channels affiliated with the refund scheme, like Telegram, Reddit, Discord and Nulled. Radeckas is ordered not to make any claims he is affiliated with Amazon or use any Amazon account to place orders. Robart also barred him from using any of Amazon’s trademarks.
In addition to Radeckas, Amazon accused four former warehouse employees of engaging in civil conspiracy for approving customer returns for products that were never actually returned. Amazon said REKK recruited the workers — Luke Colvin, Alejandro Taveras, Noah Page and Skylar Robinson — on Reddit, LinkedIn or directly on Telegram. The workers were employed in fulfillment centers in various states and received bribes from REKK to approve fake refunds.
After failing to appear before the court, Robart entered a default judgment in favor of Amazon. Colvin approved 64 fake returns, causing Amazon to refund $109,000 to REKK users. Taveras approved 52, costing Amazon over $67,000; Page approved 56 orders totaling $75,000 in refunds; and Robinson approved the most of the four, processing 189 fraudulent returns for over $175,000.
“Unfortunately, fraudsters exploit the refund process for their own financial gain to the detriment of honest consumers and retailers who must bear the brunt of increased costs, decreased inventory, and service disruption that impacts genuine customers,” Amazon wrote in its amended complaint. “Refund fraud affects the entire retail industry, including physical and online retailers alike.”
The company said it spent $1.2 billion and employed over 15,000 people to fight theft and fraud in 2022.