Crooks have used everything from cash real estate purchases to bottles of Tide detergent to Bitcoin to launder ill-gotten gains. Now you can add a new scheme to the list that relies on a most unlikely product: books.
Some authors on Amazon’s self-publishing print book service have had their identities stolen and then used to launder money, according to cybercrime reporter Brian Krebs. The crooks upload phony but expensive paperback titles to the stolen authors’ accounts via Amazon’s CreateSpace service and then “buy” dozens of books, transferring funds to legitimate bank accounts, he reports. Amazon typically pays authors 60% of a book’s list price on CreateSpace after deducting production and other charges.
In one case, for example, author Patrick Reames, who has sold books on Amazon about the commodity business, received an annual 1099 tax form from the company claiming he had made $24,000 last year. Reames quickly discovered that someone else had published a book called “Lower Days Ahead” via CreateSpace under his name and account. The book, filled with nonsensical gibberish, sold for $555 a copy.
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“This book is very unlikely to ever sell on its own, much less sell enough copies in 12 weeks to generate that level of revenue,” Reames told Krebs. “As such, I assume it was used for money laundering, in addition to tax fraud/evasion by using my Social Security number.”
Amazon (amzn) said it was moving to block the scam. “The security of Amazon accounts is one of our highest priorities, and we have policies and security measures in place to help protect them,” the company said in a statement to Fortune. “Whenever we become aware of actions like the ones you describe, we take steps to stop them.” Anyone who thinks they have been similarly victimized should contact customer support, Amazon said, at this web address. People who received erroneous 1099 forms should contact the company at the email address firstname.lastname@example.org, the company added.
On his own blog, Reames calculated that the phony book probably “sold” 90 copies to generate the excessive profits that he was credited for on the 1099 form.
“Think of it this way, if I’m involved in an illicit activity (which, to be clear, I’m not) and I want clean money, I have to somehow figure out how to make that money come from a legitimate source,” Reames wrote. “A stupid high price will keep the casual buyer, someone just looking for something to read on their next flight, from ever buying it and then complaining to Amazon about it being worthless garbage. Plus, that crazy price will provide me with a higher return each time the book, or multiple copies of it, is bought by someone with whom I am conducting my illicit business (i.e. selling guns, dealing drugs, funding terrorism…you can use your imagination).”