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Suspect Charged with $650K in Fraud Through Intricate Refund Scheme

The former owner of an East Providence vehicle transport company has been arrested and charged in an elaborate scheme to defraud Amazon, according to US Attorney Aaron Weisman.

Prosecutors allege that Michael Chaves, the former owner of CAT Inc., ordered thousands of products from Amazon and would request to return them. Instead of the original product he’d purchased, Chaves would instead send unrelated objects back to the company.

Since mid-March, Chaves created 30 Amazon accounts under a variety of names and email addresses, according to court documents. Using those accounts, he ordered approximately 10,795 products totaling $713,970, most of which he returned.

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A UPS driver told investigators that he would stop at Chaves’ business every day to deliver Amazon packages and pick up returns. The driver said most days, he would drop off a package one day and pick the same one up the next day as a return.

Chaves, 40, is accused of defrauding Amazon out of nearly $650,000 in refunds after requesting to return roughly 7,450 orders. Prosecutors said Chaves would send back unrelated items in the returned item’s original packaging in an attempt to sneak them through the inspection process, though inspectors flagged approximately 149 of those returned items.

Chaves, according to court documents, would usually replace the original product with an unrelated product that appeared similar to the original or were the same weight as the original.

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Prosecutors cited examples of the scheme, which included returning two pieces of wood instead of a commercial truck tire and a package of mini light bulbs instead of a pair of Apple Air Pod Pros. Court documents show that Chaves currently has six active Amazon accounts. He’s been charged with wire fraud and mail fraud and was ordered detained… WPRI13 News

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