from the pay-no-attention-to-the-companies-behind-the-curtain dept.
Gizmodo and Digitaltrends are among those reporting that electronics retail website Newegg has been sued by South Korean Banks, who say that Newegg and the South Korean Hardware company Moneual conspired to defraud the banks of "hundreds of millions of dollars."
The lawsuit, which was filed in U.S. District Court in Los Angeles, claims that Newegg and computer wholesaler ASI Corp. made false orders for home-theater computers from Moneual. The banks claim that Moneual organized the scheme and used the fake orders to obtain funds from the four banks. Newegg and ASI allegedly received a cut of the money in exchange for their cooperation.
[...] The computers that Moneual ordered were allegedly priced at 300 times their actual retail value, which is why the banks believe Newegg and ASI were part of the scam.
"No such business would have [paid] such an inflated price, unless it intended to create the illusion of extensive, profitable, high-value commerce... for the purpose of defrauding lenders into supporting the transactions," the lawsuit alleges.
The four banks are demanding a jury trial and monetary damages. They say that $230 million is still owed from the faulty loans that Moneual obtained.
Related Stories
Newegg has been hacked (archive). If you bought anything on Newegg.com between August 13th and September 18th, get a new credit card:
Newegg is investigating a data breach that may have compromised credit card details and other information about its customers, though the full extent of the damage is not yet known.
"Yesterday, we learned one of our servers had been injected with malware which may have allowed some of your information to be acquired or accessed by a third party," Newegg CEO Danny Lee states in an email being sent out to potentially affected customers." The malware was quite sophisticated and we are conducting extensive research to determine exactly what information may have been acquired or accessed and how many customers may have been impacted."
[...] Researchers from RiskIQ and Volexity say the attackers installed credit card skimming malware onto Newegg's website. They injected the malicious code into Newegg's payment processing page, basically hiding in plain site for more than a month, the researchers say.
The stolen credit card data was then sent to a drop server on a domain the hackers had registered, initially parked at neweggstats.com. They obtained a security certificate for the site from Comodo so that it appeared legitimate.
takyon: A news search for "Newegg" finds numerous examples of PC Gamer directing its readers to the site for deals (and steals?) during the breach period.
Also at Ars Technica and The Verge.
Previously: Encryption Patent That Roiled Newegg is Dead on Appeal
Newegg Is Being Sued for Allegedly Engaging in Massive Fraud
(Score: 1, Interesting) by Anonymous Coward on Monday October 23 2017, @11:52PM (15 children)
I mean c'mon 230 million worth of damages (meaning at least that much in loans?) and they wouldn't have thought to verify the purchases going on BEFORE all this?
300 percent markup should have been pretty easy to verify, especially for the nominal price of a modern desktop PC, indicating they didn't perform any formal inspection or valuation of the merchandise the loan was going to fund.
A few million I could maybe see, but something on the order of a quarter billion dollars sure sounds like negligence on the part of the banks.
(Score: 3, Funny) by Anonymous Coward on Monday October 23 2017, @11:57PM (1 child)
The loan officer used to work for Equifax.
(Score: 1, Touché) by Anonymous Coward on Tuesday October 24 2017, @01:43PM
Close! AIG.
(Score: 5, Informative) by bob_super on Monday October 23 2017, @11:59PM (3 children)
Not 300 percent, 30000 percent.
This is gold-plated-hammer-marble-toilet-Afghan-gas-station-F-35 levels of "oops I didn't notice the price" gouging.
Just short of a Pentagon Civilian Distinction.
(Score: 5, Informative) by frojack on Tuesday October 24 2017, @01:55AM (2 children)
Well there's some question about what exactly the charges entailed.
The operative paragraph in TFA is:
However, you can't get a Home Theater Personal Computer for 8 Dollars. Even a USB stick would cost more than 8 dollars.
So something has been lost in translation.
No, you are mistaken. I've always had this sig.
(Score: 2) by Bot on Tuesday October 24 2017, @06:32PM (1 child)
> However, you can't get a Home Theater Personal Computer for 8 Dollars.
Challenge accepted
a 8gb usb stick can be had for 8 dollars I guess.
put kodi or vlc or stuff on a live linux system on usb
- "see client, this is a HOME THEATER PERSONAL COMPUTER that connects to your existing computer and makes it read ANY KIND of video without the SLOWNESS of windows! Try it!"
- "wow man it works! I used to wait 5 minutes before my media player could play an mp3, this is lightning fast!!!"
And they all lived happily ever after.
Account abandoned.
(Score: 0) by Anonymous Coward on Tuesday October 24 2017, @07:19PM
I could buy 80 bucks for a full htpc. Something with an SoC ARM chip in it. 80 bucks is within the realm of doable. 8 like you pointed out gets you 1 part of a system.
Now remember lawyers lie and exaggerate all the time. It is not uncommon. It is a tactic to basically get the plaintiff to admit wrong doing. Basically screw up and say no its not 8 dollars its 300 dollars. So at that point you are just arguing amounts not wrong doing. The wrong doing is implicit in the correction. It is like how a police officer will lead you with a question of 'do you know why I pulled you over today'. As you may say something else he did not notice and he gets an easy ticket.
(Score: 5, Interesting) by khallow on Tuesday October 24 2017, @01:08AM (8 children)
That many banks indicates to me a failure mode of the entire banking sector in South Korea rather than negligence of particular banks.
(Score: 3, Interesting) by DECbot on Tuesday October 24 2017, @03:01AM (5 children)
I wonder if this is in any way related to the new owners of Newegg, Hangzhao Liaison Interactive Information Technology Co., Ltd. [techpowerup.com]. It would not surprise me if a successful geek outlet is sold as a shell corporation to a foreign company in order to conduct massive fraud scams.
cats~$ sudo chown -R us /home/base
(Score: 0) by Anonymous Coward on Tuesday October 24 2017, @04:09AM (4 children)
So how is newegg since the takeover?
(Score: 3, Informative) by Anonymous Coward on Tuesday October 24 2017, @05:02AM (1 child)
Shitty. Half their items are now shady Chinese third-party sellers and the UI is set up to make it hard to tell whether you are buying from Newegg or the third party Chinese seller. I stopped using them all together years ago. They are garbage and I have always been able to find a lower price at another online retailer or eBay for every item they sell. This is even true of the their shell shocker and other deals.
(Score: 1) by ncc74656 on Wednesday October 25 2017, @03:54AM
Last time I checked, there was a checkbox to restrict search results to items sold by Newegg. Just took a look to confirm...have a look at this:
https://alfter.us/wp/wp-content/uploads/2017/10/Screenshot_20171024_203401.jpg [alfter.us]
(Score: 5, Interesting) by Joe Desertrat on Tuesday October 24 2017, @07:58AM (1 child)
Their website has become one of the worst script laden messes of any I've used. So much so my last experience with them was probably my very last. I'm not surprised to find out it is new owners responsible.
(Score: 2) by LoRdTAW on Tuesday October 24 2017, @12:26PM
Agreed. Since about 3 or so years ago their site has become close to unusable. There were points where I gave up looking because it was pulling in scripts from dozens of sites.
My biggest gripe was their Amazon wanna be shift towards selling everything while letting in a deluge of 3rd party sellers. No newegg, I'm not buying a fucking blender or tires from you. Ever.
(Score: 4, Interesting) by khallow on Tuesday October 24 2017, @04:01AM (1 child)
From this Tom's Hardware article [tomshardware.com], I place the exposing of the Moneual fraud and the subsequent bankruptcy around late 2014.
So an obvious question here is why is it taking three years for these banks to sue Newegg? Surely, the fraudulent transactions in question were discovered earlier.
Anyway, moving on, it's looking a lot like the banks got greedy and didn't look too hard at this business. That kind of sustained growth over a whole decade should have been a warning sign.
(Score: 4, Informative) by bradley13 on Tuesday October 24 2017, @01:04PM
Too lazy to look it up, but I recall reading somewhere that the transactions in question were forged. In which case, they likely never existed, or at least not in the form presented. However, the banks failed to recover all of their money, so they are now looking for other deep pockets to raid. After all, a bank can't admit that it gave stupid loans - it's got to be somebody else's fault.
Everyone is somebody else's weirdo.
(Score: -1, Troll) by Anonymous Coward on Tuesday October 24 2017, @01:05AM (1 child)
Fuck those fuckers. HARD!
(Score: 0) by Anonymous Coward on Tuesday October 24 2017, @07:46AM
Banks are pretty horrible institutions these days, however I think the fraud aspect makes Newegg into shady bastards.
(Score: 2, Funny) by Anonymous Coward on Tuesday October 24 2017, @03:31AM
We don't bust no old-ass rotten eggs.
We sure do bust up whole lot of fresh brand new eggs. White or brown, we don't discriminate.
Crack, Pop, Sizzle.
(Score: 3, Funny) by rob_on_earth on Tuesday October 24 2017, @06:56AM
When the box said "enter the amount you want to pay" they did not think £0 was fair and wanted a large proportion to got to EFF and children's charities.
Or is that HumbeBundle.com ?