Most of the nearly $1.5 million a former University of Miami student from Darien has agreed to pay in restitution for his role in a multi-million dollar return shipping scheme will go to Amazon, with the remaining money divvied up among several other retailers, according to court records.
Matthew Bergwall pleaded guilty to mail fraud conspiracy in federal court last summer. His sentencing is set to resume in June, after it was initially scheduled for last week.
Bergwall's attorney said in a motion his client had agreed to pay out around $1.5 million in restitution, after Bergwall obtained a loan for the money from a business associate.
A court filing last week laid out how the money would be divided up.
The bulk of the money, $1,091,092.62, will go to Amazon, according to the calculation in the filing, which was signed by both the defense and prosecution.
The remaining roughly $371,000 of the total $1,462,471.92 in restitution was divided up among seven other companies, most of them fashion or electronics retailers, according to the filing.
In a statement, an Amazon executive said the company and other retailers have faced "large-scale refund fraud" for years.
"Amazon is addressing this issue head-on through the development of tools that use machine learning models to proactively detect and prevent fraud, as well as employing specialized teams dedicated to detecting, investigating and stopping fraud," Kathy Sheehan, vice president of business conduct and ethics, said. "When bad actors attempt to evade our controls, we take action and work with law enforcement to hold them accountable."
A court filing indicated Bergwall faces between a little more than 5 years and six and a half years in prison under federal sentencing guidelines, before any departures or variances. At a sentencing hearing Thursday, the judge rejected a motion filed by Bergwall's attorney seeking downward departure in his client's sentence because of his "extraordinary prepayment" of the $1.5 million in restitution.
In addition to the potential prison sentence, Bergwall could also face between one and three years of supervision upon his release, a fine of between $25,000 and $250,000, and a special assessment of $100, according to court papers.
Prosecutors said in a news release at the time of his arrest that Bergwall was charged with hacking a "a multi-national shipping, receiving, and supply chain management company." The news release from the U.S. Attorney's office for the Middle District of Florida said Bergwall had unauthorized access to employees' accounts at the unnamed company between December 2021 and April 2022.
A more recent indictment against another defendant in the case revealed prosecutors believe Bergwall purchased the fraud scheme from a New York resident in February 2022. The New York resident created the fraud scheme — dubbed the "service" by prosecutors in court papers — soon after he gained access to the victim company's tracking platform in December 2021.
Prosecutors claim those involved in the scheme used the tracking platform to enter "false and fraudulent tracking information," which allowed them to receive refunds for merchandise while also holding on to the goods.
Bergwall is believed to have enlisted two other people to help him run the scheme, then passed off operating the conspiracy to one of his co-conspirators, court papers said.
In around five months, the scheme "caused nearly 10,000 fraudulent returns and resulted in victim-retailers losing more than $8 million," an indictment said.