A grand jury indicted eBay seller Roni Rubinov on charges of running a fencing enterprise with the help of 40 partners, employees, and associates who were also indicted in New York on Thursday.
The eBay seller owned a pawn shop in Manhattan which was used to launder money from the sale of stolen goods, according to the indictment, using the defendant’s eBay, PayPal, and Bank of America accounts. Note that defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Law enforcement said it seized over $3.8 million worth of stolen retail items, over 550 stolen gift and cash cards, and over $300,000 in cash. New York Mayor Eric Adams said, “This wasn’t just shoplifting, but people going into stores and clearing off shelves as part of an organized crime ring.”
Numerous agencies participated in the 3-year investigation, with Homeland Security alleging the enterprise operated as a “shadow” ecommerce business, using boosters to procure stolen merchandise which they then sold on an eBay store Treasure-Deals-USA.
“Since 2017, the Treasure Steals USA Operation has sold more than $1,373,728 of stolen property via Rubinov’s eBay store,” according to a press release on the New York Attorney General’s Office website.
What may be interesting for online sellers is the indictment’s following allegations of the flow of money and cost of inventory:
- Between August 8, 2017 and January 7, 2020, the sales of stolen goods on the Treasure-Deals-USA eBay Store generated approximately $1,373,728 in gross proceeds;
- The store generated approximately $1,098,025 in net proceeds;
- Approximately $154,001 was redirected back to eBay and PayPal to pay eBay and PayPal reinvestment fees.
(If the store generated $1,373,728 over the course of 30 months, that would be an average gross sales figure of $45,790/month.)
The NY Attorney General alleged the defendants purchased stolen clothing items for six-to-eight percent of their retail value and purchased stolen pharmaceutical items and cosmetics at the rate of one-to-two dollars per item, depending on the brand.
Beginning on page 21 of the indictment is a description of overt acts including examples of what defendants allegedly paid for a selection of stolen goods. For example, a defendant allegedly paid $190 cash in exchange for assorted stolen Brooks Brothers clothing having a retail value of $2,800. In another example, a booster received $130 cash for an allegedly stolen white Fender guitar with a retail value of $1,549.97.
The indictment described other goods including a Rolex watch, Gap jeans, Gucci sunglasses, a Fendi dress, Louis Vuitton purses, leather jackets, cosmetics, boxed and roll-on perfumes, boxed chocolates, watches, and assorted costume jewelry, and stolen drug store items.
The eBay seller stored the inventory at his residence and at a “stash house” where employees inventoried and organized the items by product type and listed them on eBay, according to the indictment. When sold, items were brought back to the defendant’s business address in Manhattan to be packaged and shipped to eBay buyers.
The indictment also charges defendants with purchasing stolen cards from boosters, swiping the gift cards through the Pawn Shop merchant account terminal, and creating fraudulent receipts for the purchase of the stolen gift cards.
The indictment alleges, for example, that on May 13, 2019, one defendant “bought one stolen Vanilla Visa card with a value of $300 in exchange for $150 cash, and issued a receipt stating, in sum and substance, “$300 in silver bars.””
Like many eBay sellers, this one was looking to expand to Amazon and Shopify, according to the indictment.
The defendants are being charged with various counts of enterprise corruption, money laundering, criminal possession of stolen property, scheme to defraud and conspiracy. The case is being prosecuted by the Attorney General’s Statewide Organized Crime Task Force (“OCTF”).
See today’s related AuctionBytes Blog post, “Warning Do Not Get Creative with Amazon Receipts“