Fake books sold on Amazon could be used for money laundering

By Allison Flood

Books of gibberish are listed on Amazon.com for thousands of dollars, with one author claiming his name was used to send almost $24,000 to a fraudulent seller

Amazon’s self-publishing arm CreateSpace makes it relatively straightforward to publish a title that contains any text, provided that this isn’t “placeholder” or dummy text, and allowing fake books to be sold on the Amazon website at a price chosen by the seller.

For a highly priced title, the author can earn royalties of up to 60% for a paperback, or 70% for an ebook. While the internet retailer requires valid taxpayer identification from all its publishers, one affected author, the US-based business writer Patrick Reames, says that a fraudster used his social security number to pose as him, and publish a book under his name.

Reames spoke to the Guardian after Amazon sent him a US government 1099 tax form last month informing him that CreateSpace had paid him tens of thousands of dollars in 2017. Reames, who only makes a few hundred dollars a year from his business titles, searched for his own name on Amazon.com and discovered that, as well as the books he had written himself, which are sold via a publisher, rather than self-published via CreateSpace, a title named Lower Days Ahead also appeared under his name. Selling for $555 (£397), the book contained what appeared to be a computer-generated story.

Reames calculated that the “ridiculous” book would have to have sold dozens of copies in 11 weeks to have generated the almost $24,000 that Amazon says he has made from the book.

“There is no way in hell that 90 people in 11 weeks fell for this Amazon-hosted scam,” he says, speculating that a criminal wanting “clean” money published the book via CreateSpace, giving it a high price to put off the casual buyer.

He told the security expert and journalist Brian Krebs, who first broke the story, that he suspected someone had been buying the book using stolen credit and/or debit cards, and “pocketing the 60% that Amazon gives to authors”.

“It occurred to me that the only purpose that could be served by this ‘book’ and the account set-up with my credentials was to launder money … it’s clear someone stole my credentials from somewhere and set up an account with Amazon to avoid being held responsible for the taxes … which, of course, constitutes identity theft and tax fraud,” Reames wrote on his website, detailing his struggle with Amazon to deal with the situation.

Reames says Amazon has told him that it can send him a letter “acknowledging than I’m disputing ever having received the funds, because they said they couldn’t prove I didn’t receive the funds” and won’t share the details of the payee.

“So I can’t clear myself and they won’t clear me,” he says.

Reames said the situation would “almost certainly” be an issue next year, as the fraudulent account was not shut down until February, and so will affect his taxes for 2018. “I’ve not heard anything from Amazon despite the coverage this issue has received and their initial promise to follow up with me. They have provided only a letter confirming that I had contacted them and indicating that they had closed the account associated with the fraudulent book. In the only phone conversation I’ve had with the fraud group there, they refused to issue a corrected Inland Revenue Service 1099 form or provide me any information about where the funds were being sent,” he said.

After Krebs published his story, a number of titles priced at hundreds of dollars and containing gibberish were removed from Amazon, but multiple questionable books are still for sale on Amazon.com, including Bongo Shamalamadingdong’s A Poor Excuse for a Good Title: I Lied, which retails for $250 in paperback and contains the repeated line: “Once upon a time there was a chicken and a boy followed it into a garage, thinking it was a magic portal, but alas it was just a garage”. There is also Rich Dan Edward Knight Sr’s I Have Abundance Overflowing In My Life Forever: Brinks Trucks Follow Me Everrywhere I Go Eternally (Whatever You Ask Believe Receive) (Volume 1), a 24-page book priced at $2,999.99. There is no evidence that these titles are involved in fraudulent activity; CreateSpace specifications allow for “joke or gag books with repeated content or an intentional absence of content”, but only if they are “clearly labelled as such”.

“Whether these worthless titles are being used for illegal or nefarious purposes, I suppose only Amazon can answer that,” said Reames. “Some may be the product of delusional individuals or some type of joke, social commentary or satire. However, if any of these books have sold more than one or two vanity copies bought by the ‘author’, I think it would be a clear indicator that, like in my case, the books are being used to illegally funnel money under the guise of a legitimate transaction … and again, only Amazon could provide that information.”

An Amazon spokesperson said: “The security of Amazon accounts is one of our highest priorities, and we have policies and security measures to help protect them. Whenever we become aware of actions like the ones described, we take steps to stop them. If you’re concerned about your account, please contact Amazon customer service immediately using the help section on our website. Anyone who believes they’ve received an incorrect 1099 form or a 1099 form in error can contact us 1099@amazon.com and we will investigate.”

https://www.theguardian.com/books/2018/apr/27/fake-books-sold-amazon-money-laundering