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Computer Parts Site Newegg Is Being Sued For Allegedly Engaging In Massive Fraud (gizmodo.com)
schwit1 shares a report from Gizmodo: A suit filed Friday in the U.S. District Court in Los Angeles by four South Korean banks alleges "massive fraud" with an outstanding debt of at least $230 million, and California-based electronic parts seller Newegg has been named as a defendant, along with wholesaler ASI Corporation and its officers. These new documents allege that Moneual, Newegg, and ASI were engaging in "an intricate scheme of circular transactions." The banks submitted a list of over 70 pages of supposedly fraudulent orders as evidence that Newegg and ASI created the paperwork that Moneual used to secure loans. The suit further claims that Newegg and ASI "received kickbacks from Moneual in varying amounts in exchange for agreeing to collude with Moneual to defraud the Banks." One method of inflating purchase orders for Moneual -- a brand barely remembered in North America as a a low-tier entrant into the robotic vacuums market -- allegedly involved creating paperwork that showed components being sold for over 370 times their value.
This does not make sense: "Moneual purported to charge ASI and Newegg between $2,530 and $2,980 per HTPC unit, and those amounts were stated on the invoices and purchase orders from ASI and Newegg upon which the Banks advanced funds to Moneual. However, the Banks later learned that in reality, the HTPCs were only worth $8 per unit."
How can an HTPC be worth $8? Newegg still has empty Moneual cases listed for $70. Depending on what it was filled with in 2012 $2,530 is not an impossible price. $8 seems close to the shipping cost, not the product cost.
Bummer. I actually liked NewEgg.
I read at +2. If your post doesn't reach that level I will not see or respond to it.
There may be another explanation in that Newegg sometimes acts as the middleman. You see this in the product details when it is listed as "Sold and Shipped by XXXX" instead of Newegg. So Monueal or their agents could fake "selling" many HTPCs when for a small service fee that Newegg that would collect as the middleman.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Newegg's interface is still a lot better for actually finding computer parts. All of their filters are much more targeted.
That said - I'll admit that due to Prime I often go to Newegg.com, create a shopping list of what I want . . . then go over to Amazon and search the specific product names to duplicate the cart and buy from there instead.
"People who think they know everything are very annoying to those of us who do."-Mark Twain
If you click through on any of these profile names, you'll see hundreds of reviews written on cheap, Asian-sourced gadgets. Never any expensive, name-brand products. And the reviewers are so prolific, they write the reviews almost every day and usually upwards of five reviews per day. It's common to see one of these fake reviewers purchase two or three knock-off fitness trackers over the course of two months, yet none of their reviews compare the multiple trackers they seemingly have recently purchased.
I can imagine that when they boost a product up to "#1 seller" status, they can get loans against projected sales volume just like these scammers did via their Newegg fraud.
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