Former Trucking Company Owner Charged in Bizarre Scheme to Scam Amazon
Providence, RI – A former owner of a car hauling company is in trouble again after authorities allege he engaged in an elaborate scheme to defraud the world’s most dominant online retailer.
Michael Chaves, 40, of East Providence, and former owner of CAT Inc., is accused of executing a scheme to defraud Amazon through fraudulent transactions and theft of inventory through falsely represented returns.
According to court documents filed in the matter, it is alleged that Chaves ordered thousands of products from Amazon and replaced the original products with lesser value replacements — often items different than the ones he originally ordered — before returning the packages to Amazon for refunds.
For instance, the U.S. Attorney for the District of Rhode Island alleges Chaves ordered a commercial truck tire and sent back two pieces of wood.
In another example, Chaves ordered Apple Air Pod Pros and returned an unopened package of mini light bulbs.
The majority of Chaves’ purchases and returns consist of auto and commercial motor vehicle parts.
However, court documents allege he also purchased and returned many other non-vehicle related items, including, but not limited to: electronics including cellular telephones and televisions, household items including chandeliers, closet organizers, lawn sheds, lawn mowers and vacuum cleaners.
Most of these items were returned in an unsellable condition, the U.S. Attorney claims.
According to court documents, since March 2017, Chaves has held approximately 30 Amazon customer accounts under various names and email addresses.
Over this time period, Chaves’ accounts placed approximately 10,795 orders totaling approximately $713,970.78, most of which have been refunded based on Chaves’ return of the items purchased.
Chaves received a total of approximately $643,324.04 in concessions or refunds on approximately 7,450 orders, including nearly approximately 7,200 items that were physically returned to Amazon.
Many of the returned items were sent back in the original packaging in an attempt to deceive Amazon’s incoming inspection process.
Amazon’s standard inspection process flagged approximately 149 of the returned items as potentially fraudulent, valued at $23,872.89.
Chaves currently still has six active Amazon accounts, authorities say.
This is not the first time Chaves has been in trouble with the law.
In fact, Chaves is currently on pretrial supervision while awaiting sentencing, having pleaded guilty in August 2019 to falsification of United States Department of Transportation (USDOT) records, aggravated identity theft, five-counts of bank fraud, two-counts of wire fraud, and tax evasion.
The charges were brought in connection with the investigation into Chaves having falsified USDOT safety records at his trucking company, using the personal identification of another person to continue to run the transport company after it was ordered closed, fraudulently securing $400,000 in financing, and having taken numerous steps to evade paying personal income taxes to the IRS.