Amazon Kindle's Createspace self-publishing arm being exploited in money laundering scam

Identity theft victims left with large tax bills for e-books they never sold

Cyber criminals are impersonating people on Amazon and publishing e-books in their name as part of a money laundering scam - with the victim of identity theft stiffed with a large tax bill on the profits from the sale of products they never sold.

That's according to investigative journalist Brian Krebs, reporting on the case of Patrick Reames.

Reames claims that he only found out about the scam when he received an email from Amazon claiming that he had sold $24,000 worth of books through its publishing platform Createspace - informing him that the US Inland Revenue Service (IRS) had been notified accordingly.

Reames found that a book sold on Createspace using his identity had sold for the price of $555, although the book was essentially 60 pages of computer-generated gibberish that had nevertheless made sales of just over 70 copies in a short space of time.

Reames also found out that the scammers had access to his all-important US social security number, enabling them to pass themselves off as Reames to Amazon, as well as stiffing him with the tax bill for the sales of the books.

Krebs has suggested that the book sales were purchased using stolen credit cards, or were part of a money laundering scam. Furthermore, Reames may not be the only victim, Krebs added.

Reames has written several niche industry books, sold via a publisher, but added that he never made enough money to report to the IRS. Nor does he have an account on Createspace that could have been compromised.

Speaking to Krebs, Reames said that the scammer appeared to have used a basic tool to computer-generate the text for the book.

"Based on what I could see from the ‘sneak peak' function, the book was nothing more than a computer-generated ‘story' with no structure, chapters or paragraphs — only lines of text with a carriage return after each sentence," said Reames.

The imposter sold the $555 book, called "Lower Days Ahead", on Amazon websites across the world. The online retailer has since removed the book from its sites.

Reames believes that the crook has been using stolen credit cards to buy the expensive book multiple times over the course of three months.

He said: "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.

"As such, I assume it was used for money laundering, in addition to tax fraud/evasion by using my Social Security number.

"Amazon refuses to issue a corrected 1099 [IRS notification form] or provide me with any information I can use to determine where or how they were remitting the royalties."

He believes that such identity theft is rife across Amazon. "I have reviewed numerous Createspace titles and its clear to me that there may be hundreds if not thousands of similar fraudulent books on their site.

"These books contain no real content, only dozens of pages of gibberish or computer generated text.

"It's not hard to imagine how these books could be used to launder money using stolen credit cards or facilitating transactions for illicit materials or funding of illegal activities."

Krebs corroborated that claim, pointing to the works of an author going by the name of 'Vyacheslav Grzhibovskiy' as evidence. "Some retail for just one or two dollars, while others are inexplicably priced between $220 and $320," wrote Krebs.