Amazon fraud scheme exposed in India
The Cyber Security Bureau in Telangana, a state of India, has launched an investigation into a major fraud scheme involving 18 former Amazon employees who allegedly manipulated the company’s delivery system to claim about $11.8 million in fraudulent transportation reimbursements.
The scheme revolved around falsified delivery trips registered within Amazon’s logistics system. Authorities say the accused, in collaboration with U.S.-based suppliers, created fake delivery records, claiming to have transported goods to customers who were either unavailable or had incorrect addresses. This allowed them to pocket transportation fees without ever completing the deliveries.
Amazon’s internal audit uncovered the scam, prompting a formal complaint. The fraudulent activities reportedly took place at the company’s Relay Operation Center in Hyderabad, the capital of Telangana, which monitors global shipments. Investigators are now scrutinizing the operations of the former employees and their network to understand the full extent of the fraud.
A case has been registered against 22 individuals. As authorities dig deeper, more revelations are expected about how the individuals bypassed Amazon’s security measures.
This case underscores the growing sophistication of fraud in the logistics industry and the need for stringent internal controls, advanced fraud detection systems and continuous monitoring to prevent financial losses.
Nigeria’s cargo tracking woes
In an effort to curb rampant fraud and illicit activities within its maritime sector, Nigeria is set to implement the International Cargo Tracking Note (ICTN) in Q2 2025. The Nigerian Shippers’ Council (NSC) will oversee the rollout, despite significant opposition from key industry stakeholders.
The ICTN is designed to enhance transparency, security and efficiency in cargo tracking. However, many in the shipping and logistics industry argue that it will lead to increased costs and bureaucratic hurdles, and despite its potential benefits, the initiative has faced multiple setbacks due to internal conflicts, corruption and resistance from industry players.
Nigeria’s maritime sector suffers an estimated $500 million loss annually due to cargo fraud, under-declaration and inefficiencies. Over the past five years, this has amounted to a staggering $2.5 billion in lost revenue.
The implementation of ICTN has sparked strong resistance from shipping lines, importers and logistics operators. The chairman of the Shipping Lines Association of Nigeria, Boma Alabi, has voiced concern that the initiative will function as an additional tax, increasing costs for businesses and consumers. Similarly, Segun Musa, national vice president of air logistics at the National Association of Government Approved Freight Forwarders, labeled ICTN an “intellectual fraud,” arguing that it will lead to double inspections, one at the point of origin and another upon arrival, negating the purpose of Nigeria’s existing inspection policy.
Despite these criticisms, NSC Executive Secretary Pius Akutah has defended the ICTN, emphasizing its potential to boost government revenue and reduce smuggling, including illicit shipments of arms and drugs. The minister of Marine and Blue Economy, Gboyega Oyetola, acknowledged flaws in the past administration’s approval process but stressed the need to implement ICTN as part of the government’s economic diversification strategy.
As Nigeria moves toward ICTN implementation, the freight and logistics industry will closely monitor its impact, particularly in mitigating fraud, improving cargo security and enhancing port efficiency. The coming months will be crucial in determining whether ICTN can be the game-changer the Nigerian maritime sector desperately needs.Check out a past commentary on FreightWaves about the modernization of Africa’s logistics capabilities here.
Kal Freight’s bankruptcy update
Kal Freight’s bankruptcy case continues to unfold, revealing deeper scrutiny into its financial dealings and prospects. The California-based trucking company, which filed for Chapter 11 bankruptcy protection in December amid allegations of fraudulent activity, now faces increased pressure from creditors demanding an independent investigation.
This week, creditors urged a Texas bankruptcy judge to appoint an independent examiner to further investigate allegations of pre-petition fraud and mismanagement. The move signals growing concerns over the company’s financial conduct before its bankruptcy filing, particularly in light of the accusations that Kal Freight fraudulently obtained nearly $17 million from Daimler and engaged in unauthorized asset transfers totaling tens of millions of dollars.
Kal Freight is now working on a Chapter 11 reorganization plan, expected to be filed in February. The plan may take one of two paths: a sale of the business or a restructuring aimed at keeping the company operational.
More developments are anticipated in the coming weeks as Kal Freight’s bankruptcy proceedings continue to evolve.
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