No Good Deed Goes Unpunished (Repost from Albert Leon)
by ASGTG
14 hours ago
This is an interesting read reposting from Medium by Albert Leon
In March of 2023, Ephraim Rosenberg, founder of the ASGTG, the Amazon Sellers Group Telegram, a free advocacy resource community for Amazon sellers, pleaded guilty to a $100M Amazon bribery scheme after a five-year investigation that involved the Amazon Corporation, four federal agencies, the FBI and the Department of Justice, at an estimated cost of tens of millions of dollars to taxpayers.
Ed, as his friends call him, did not disavow the public apology he made on March 25th in which he took responsibility for illegally paying for annotations, which are internal Amazon documents widely available all across the internet. But his apology deserves some context because when you look at all the facts in this case, the only part Ed played in this conspiracy may very well have been the role of a fall guy.
Ed Rosenberg started his career as a seller on eBay back in 1998, when there were just a handful of people selling goods to consumers. It was quite different from the robust and sophisticated online shopping experience we have today. But Ed had the foresight to tap into e-commerce in its early stages of development. For years he sold electronics, printers, car audio, and motorcycle audio equipment, which enabled him to make a living with limited technological capabilities, and a host of challenges related to user trust and security.
In 2005, as Amazon entered the e-commerce picture and their market share began to grow, Ed once again recognized a unique opportunity and turned his attention to Amazonâs ZShops platform, which was their early version of Amazon Marketplace.
According to Ed, being an Amazon third-party seller in the early days was quite exciting. The marketplace was less saturated than it is today, offering a unique opportunity to tap into a growing online customer base. Sellers like Ed had to navigate a simpler platform with fewer rules and regulations, making it easier to list products. This, however, also meant less structured support from Amazon, leading to a steep learning curve for managing inventory, pricing, and customer service. Competition was still fierce but less cutthroat than it is today.
In 2015, after years on the platform, Ed found himself suspended by Amazon for a violation of their Terms of Service (TOS), but the reason for the suspension wasnât quite clear in Amazonâs notification. Ed quickly set out to rectify the problem, but the industry at the time was growing so quickly that Amazon did not have a clear process in place for removing a suspension. The only way to find answers with regard to suspensions was to speak to other sellers who had gone through the same experience.
These suspensions were devastating to sellers like Ed because they couldnât be overturned by any ordinary means. It meant that peopleâs businesses, their livelihood, was suddenly taken away by Amazon, sometimes for months at a time for no apparent reason, or none that Amazon would care to provide. Ed was only able to get his account reinstated after weeks of getting nowhere by submitting a Plan of Action (POA) to Amazon which he crafted with the help of other sellers. A POA is a document that sellers on the Amazon platform create in response to issues such as policy violations, account suspensions, or performance-related problems. It outlines the steps a seller will take to address the concerns raised by Amazon which led to the suspension in the first place.
Before 2020, if an Amazon Seller was suspended they would receive a cryptic message from headquarters alerting them of the violation of their TOS. Based on that notice, the seller would need to write a detailed POA to have their accounts reinstated or risk losing their business entirely.
This process of reinstatement was very rigid, sloppy, and often unpredictable, with much guesswork involved. It was not uncommon for a seller to be denied ten times and then get reinstated on his eleventh POA with little change to the document. The whole process was so poorly managed that it led to the creation of an entire industry of thousands of various Amazon reinstatement consultants who would make a living out of advising suspended sellers. This became known as a White Hat service, and it wasnât unusual for these consultants to charge anywhere from six to ten thousand dollars to help get a sellerâs account reinstated.
But this process wasnât guaranteed, and if a seller was unsuccessful he or she faced one of two choices; shut down their company, or turn to insiders for help. The problem with the second choice was that this âinside helpâ wasnât sanctioned by Amazon. These insiders consisted of actual Amazon employees circumventing the system. Most had been approached by shady consultants over platforms such as LinkedIn and bribed in exchange for their help. This became known as a Black Hat service, because it was highly illegal and against Amazonâs TOS.
But sellers were desperate for results. It was shocking how casually Amazon would suspend an account. All that had to happen was to have one of your products flagged by someone, even by mistake, and Amazon would shut down your entire operation when it wouldâve been far more logical to simply remove the contested item from the store. It made no sense whatsoever, but thatâs what sellers like Ed and others had to contend with. And given that the Amazon marketplace was and still is a dog-eat-dog world of third-party sellers, where ranking high on Amazonâs algorithms can be the difference between a successful business and one that fails, it wasnât uncommon for a competitor to be the source of that false accusation.
Edâs own experience getting suspended was traumatizing, to say the least. He felt utterly helpless, and desperate, with no one inside Amazon to appeal to. There was a certain randomness to the process that made things all the more bewildering. One day a seller was selling uneventfully on Amazon, and the next day they were out of business. And this was happening to thousands of other sellers like Ed on a daily basis. And Ed felt compelled to do something about it, which is why he created the ASGTG, to help other businesses like his that all too often felt squeezed by Amazonâs sometimes cruel and irrational policies.
ASGTG originally began as a WhatsApp group with the intention of creating a support system to help other sellers lost in the Amazon rainforest. And sellers joined in droves. In just a couple of days the ASGTG grew to over fifty members, some of whom had been kicked off Amazon, and others who were still selling on Amazon, but were terrified that Amazon would one day decide to terminate them with no explanation whatsoever.
One seller, in particular, joined the group after being suspended from Amazon on the charge that he had sold counterfeit merchandise, when what actually happened was that a satisfied customer posted feedback on one of the sellerâs products saying, âGreat item, definitely NOT counterfeit.â But Amazonâs system picked up the word âcounterfeitâ and suspended the sellerâs account. It took six weeks for the seller to be reinstated, and in that time his business was wrecked, with devastating personal and financial consequences.
As time went by Ed began to hear more and more hair-raising tales of unjustified Amazon suspensions. Banding together in an online sellersâ group did not give ASGTG any clout against a behemoth like Amazon, but it did allow the seller community to access the magical power of group sourcing: people pooling their minds together to tackle a problem. One person may not have all the answers, but a lot of people together could generate a wealth of knowledge.
The WhatsApp group quickly filled to capacity, which at the time was limited to 99 members. Ed became so inundated with requests by other sellers wanting to join the group that he decided to move the WhatsApp group to Telegram, because they had a much larger capacity per room, and also allowed for custom programming, which enabled administrators to monitor the groups more efficiently. The primary goal of ASGTG was to offer a legitimate White Hat pathway with clear policies, professional communication, and community tools that sellers could access for free, which would discourage them from having to resort to Black Hat tactics that could very well end up backfiring, possibly resulting in being banned from the Amazon platform for life.
But as time went by, Ed realized that many fellow sellers encountered problems that could not be resolved by working within the existing White Hat system. It was not the lack of information that was limiting, but a lack of an actual functioning process within Amazon. Sellers with suspended accounts often needed emergency one-off Executive Escalations, which allowed them to have their POA reviewed by a higher-up in Amazonâs ecosystem, such as the Executive Seller Relations team, also known as a Level 9 employee. The problem was that there was no official system in place to do this back then. These were consequential mistakes Amazon was making that were affecting businesses with dozens of employees, with millions of dollars at stake. Yes, there were other White Hat consultants out there, and attorneys that could help with these kinds of issues, but they came with a steep price tag and often would reach a brick wall as they were only working within the system.
Recognizing this problem, Ed used his position in the community to reach out to senior reps at Amazon through outside channels such as LinkedIn, to solve one-off time-ticking issues where the formal POA process failed.
Over time, he submitted via email and LinkedIn approximately 1,200 successful escalations to 70 Senior Amazon reps, all done ethically and altruistically. Word quickly spread and cases started coming in fast from all across the world. It was painstaking work, as Ed needed to vet each case to make sure the escalations were legitimate. It was crucial that he weed out the good guys from the bad guys in order to build trust with the Amazon execs. But the effort was worth it because the end result was a win for all.
ASGTG gave a pathway for wrongfully suspended sellers to be reinstated based on the merits of their case. It gave them an alternative to the thousands of readily available Black Hat service providers out there, some of which made a fortune performing illegal reinstatements that often made the problem worse for suspended sellers.
In contrast, Ed chose not to charge a fee for his assistance in order to avoid giving sellers the idea that there was anything inappropriate going on between himself and the Amazon executives helping him resolve some of these suspensions. He merely pulled at the heartstrings of senior Amazon executives to prevent legitimate businesses from being needlessly destroyed.
It was no surprise that ASGTG quickly became the go-to player for sellers mistakenly being crushed by Amazonâs processes, which more often than not got it wrong. This made ASGTG the largest and most influential community of Amazon sellers in the world, a powerhouse with over 70k members, and the leading voice for the legitimate sellersâ community.
And thatâs when a target was placed on Edâs back.
As his role in ASGTG began to take up the majority of his time and resources, Ed had to find a way to earn a living in order to cover ASGTG-related expenses, like admins, bots, rent, etc., as he wasnât actively selling any longer. He eventually settled on forming a team of 15 reps to provide POA services for sellers and took up speaking engagements where he shared what he learned with others, both of which he made sure to keep separate from the advocacy work he was doing on behalf of other sellers.
But some consultants took issue with Edâs new ventures and falsely spread rumors that ASGTG was acting as some kind of lead generator, when in fact soliciting was prohibited at ASGTG because Ed never wanted to give the appearance of having a conflict of interest with the sellers he was helping. But lawyers and consultants, who up until now had been making a killing off of Amazonâs lack of transparency, were taking a financial hit because of the free service ASGTG was providing, and they werenât the only ones unhappy with ASGTGâs success.
By now the Amazon Marketplace was inundated with Black Hat consultants, bad actors from all over the world who had no qualms about crossing the line to get what they wanted, and who were known to be used by unscrupulous sellers looking to sabotage other competitorsâ business.
A $20M a year seller by the name of David was once suspended because a bad international actor was hired to hack into the sellerâs account and email Jeff Bezos admitting to selling counterfeit goods. One would think that whoever read that email would question why anyone in their right mind would confess to the CEO of Amazon about doing something illegal. But Amazon suspended David, causing him to lose tens of thousands of dollars every day his account was suspended. It was imperative that Amazon reinstate Davidâs account as soon as possible, and the quickest way to do so was by escalating the account to a senior exec. The problem was that if you escalated an account without merit, meaning that you vouched for a seller who was committing fraud, you immediately lost credibility, and good luck getting access to an L9 executive ever again. So, in order to make sure that a sellerâs claims were legit, it was sometimes imperative to see the Amazon annotations.
Annotations are internal Amazon notes that provide summarized information about a particular account, and for years have been widely used by many in the sellerâs community to resolve issues pertaining to their accounts. Purchasing account annotations on the black market had become such a relatively standard practice that even lawyers, and White Hat consultants used them to help get clientsâ accounts reinstated without any risk of suspension. You could either spend hours upon hours on the phone trying to get a hold of someone at Amazon, and then have to write dozens of POAs over several weeks to perhaps get your account reinstated, or for $50 you could get a bit of additional info using your account annotations and know why your account was suspended. Then you could write an appropriate POA to get you up and running again in no time. It was a no-brainer. You can also get these via official channels if youâre lucky.
Annotations contained basic information sellers shouldâve been privy to, but for whatever reason Amazon refused to make them available back then. It was a blind spot in the appeals process that for years was left unaddressed. Amazon suspended first, then refused to answer any questions or provide clarity on the problem, giving sellers no other choice but to take matters into their own hands.
By having access to the annotations, Ed was able to verify that the $20M a year seller was telling the truth, so he was able to escalate the case to an L9 Senior Exec who then promptly reinstated the account based on its merits. This happened thousands of times.
The problem was that the annotations were being leaked by actual Amazon employees, mostly low-level, low-wage seller support staffers in China, India, and Costa Rica accepting payments for the information. Black Hat consultants openly offered access to these Amazon annotations on platforms like Facebook, Reddit, or anywhere where Amazon sellers congregated without repercussions, and to this day still do.
The Amazon Magic group on Telegram, for example, is a public forum where any given day hundreds of users advertise Black Hat services which include access to annotations. Access to annotations pales in comparison to some of the other services offered by some of these bad actors. You want to remove a bad review? Easy. Want to buy good reviews? Even easier. Want to get the emails of customers who left a bad review? No problem. Want to sabotage a competitorâs listing? Itâs done all the time. Bad actors are often hired to blackmail a competitor and threaten to destroy their business if they donât pay a ransom. Oftentimes, itâs far easier and less of a hassle just to pay up.
This kind of illegal activity is rampant in the Amazon seller community, which is why ASGTG is such an invaluable asset to sellers looking for support until Amazon figures out a way to deal with all the bad actors wreaking havoc on the ethical seller community. The challenge is that a large part of these bad actors come from China and Russia, where the US Government has little power to do anything about it, so itâs up to Amazon to figure out a way to take the necessary steps to take control of the situation.
One of the accounts mentioned in Edâs indictment (Client-1), was a suspended seller who had attempted reinstatement illegally using a low-level insider at Amazon, who was taking payments from a Black Hat consultant. But Client-1âs case was so complicated that the low-level insider wasnât able to help clear the suspension. The Black Hat consultant reached out to Ed for his help, but Ed didnât want any involvement. But this Black Hat consultant, who was sentenced to prison in September, was not only incredibly persistent, but dangerous, and threatened to go after Ed and his contacts at Amazon by concocting a massive smear campaign if Ed didnât help get Client-1 reinstated. Per the Black Hat consultantâs suggestion, Client-1 contacted Ed directly and asked for his help. Client-1 was losing hundreds of thousands of dollars every day his account was suspended. The situation required immediate attention, so Ed escalated the account after verifying that everything Client-1 said was in fact true, and the account was quickly reinstated.
What Ed didnât know at the time was that Client-1 was under the impression that Ed had an L9 Amazon Exec in his pocket, which was patently false. Making matters worse, it turns out that Client-1 had already paid the Black Hat consultant $200k to get his account reinstated before he came to Ed, creating the appearance that Ed was somehow part of that transaction.
To ensure that was the case, the Black Hat consultant wired $55k into Edâs account after Client-1 was reinstated without Edâs knowledge or approval. The Black Hat consultant had wired the $55k into Edâs bank account in order to have something he could use against Ed in exchange for future access to his contacts at Amazon.
On August 25, 2020, thirty FBI agents armed with assault rifles and K9 units descended upon Edâs house in Brooklyn to exercise a search warrant in the early morning hours. And when the FBI went looking into Edâs financial transactions, they saw the payment as a direct link between Ed and the Black Hat consultant.
Ed was subsequently tied to anything the Black Hat consultant ever did. He became the shadowy mastermind behind a $100M international conspiracy. All for sending an email to the Head of Seller Performance as an act of decency to get an account reinstated.
Other than the payment from the Black Hat consultant, the FBI could not find solid proof to convict Ed of the crimes he was accused of, which included bribery of Amazon executives, so the end result of the 5-year investigation was that Ed Rosenberg pleaded guilty to doing something thousands of people can still do today in a matter of seconds without repercussions. He pleaded guilty to possessing annotations.
Apparently, someone convinced the DOJ that Edâs relationships with approximately 70 Amazon Executives (including the head of Amazon Legal, the Head of Amazon UK, the head of Seller Performance WW, the VP of Selling Partner Services, the Associate General Counsel of Amazon Marketplace, and dozens of very senior executives) were somehow inappropriate, that they were all on the take. A narrative was built on a lie, and the facts were then molded around it.
But taking on the United States Justice Department just wasnât an option, which is why Ed decided not to fight them in court. One could spend decades fighting the DOJ in court at a cost of tens of millions of dollars and still lose.
So, he agreed to a $100K fine and two yearsâ probation. He wasnât happy about it, but it was something he could live with considering the alternative.
Ed still does some consulting these days, and ASGTG is still an active player in the Amazon Seller Community, but his reputation has undoubtedly suffered because of what happened.
In the sentencing submission, the DOJ wrote, âRosenberg operates a legitimate consulting business that has served many seller clients through legal means, with the conduct charged in this case constituting a significant aberration from those legal business activitiesâ.
But the conduct charged is missing context because the crime Ed pled guilty to was that of being a casual user of Amazon annotations that he purchased, like thousands of others do from random folks off the internet, to fight for the rights of a deserving seller.
As for the $100M âschemeâ, it turns out that was Client-1âs total amount of business, which was assumed to be fraudulent, when in fact, was all legit.
No one can say for certain who was behind the effort to take Ed down, but there were plenty of people who benefited from destroying his reputation. The ASGTG shook up the suspension industry, making a lot of consultants useless.
Or perhaps it was the threat ASGTG posed to Amazon itself, as ASGTG had become so important in the seller community that people openly started talking about forming a sellerâs union in order to give them more leverage when dealing with Amazon.
Whatever the case, the only real winners in this whole unfortunate situation are the White Hat consultants and lawyers still charging thousands of dollars to help troubleshoot Amazon seller accounts, and the thousands of nefarious Black Hat consultants out there still operating with impunity, while making life miserable for the honest and hardworking people in the Amazon Seller community.
