In the quiet town of Dracut, the actions of two brothers serve as a notable example of the risks present in the online marketplace. Nick and Nika Ashtar-Zadeh have agreed to plead guilty to a count of wire fraud each, following charges that they ran a deceptive online sales scheme involving cosmetics, as detailed by the U.S. Attorney's Office.
The brothers operated what seemed to be legitimate storefronts on Amazon and eBay, selling products often priced at or below the list prices of a certain Texan cosmetic company. What buyers did not know was that, in purchasing these goods, they were unwittingly enrolled into a 30-day trial program without their consent. This maneuver allowed the Ashtar-Zadehs to initially only be charged $19.95 by the cosmetic company, a charge doomed to fail when later attempts were made to collect full payments, prosecutors said. It is this bait-and-switch tactic that has prompted authorities to take action.
The scheme, which unfolded between 2020 and 2021, led to significant losses for the unnamed cosmetics firm, totalling hundreds of thousands of dollars. As reported, the brothers exploited the trial system of the company to ship products to customers who were completely unaware that their information was used to initiate the trial. The success of their scheme relied on the fact that the initial payment would go through, while subsequent charges would not, allowing them to pocket the difference.
Wire fraud is a serious offense, potentially leading to punishments that include up to 20 years in prison and hefty fines reaching $250,000. As the court proceedings continue, it remains to see justly what kind of sentence the district court judge will impose. The case is being prosecuted by Assistant U.S. Attorney David M. Holcomb of the Securities, Financial & Cyber Fraud Unit, with the announcement made by Acting United States Attorney Joshua S. Levy and Jodi Cohen of the FBI.
While the Ashtar-Zadehs are expected to plead guilty, it is essential to note that until a formal guilty plea is entered and accepted by the court, all charges remain allegations. The defendants are presumed innocent until proven guilty.
