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Amazon fulfillment center in Eastvale, California on Tuesday, Aug. 31, 2021.

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Of the many acts that can get an Amazon merchant kicked off the site, few are as devastating as selling stolen goods. Amazon calls the behavior “illegal and strictly prohibited,” and those accused of such activity can be permanently suspended.

Dozens of small businesses have been booted from Amazon in recent months for purportedly hawking stolen goods from home appliance brands such as Breville, Keurig, Levoit and SharkNinja. But suspended sellers, who spent years building their businesses on Amazon, told CNBC they had no idea they were selling stolen products.

Amazon has provided limited evidence to back up its claims, sellers said, leaving them scrambling to find the problematic merchandise. To try to get reinstated and save their million-dollar business from potential collapse, they’ve taken it upon themselves to discover if they unsuspectingly bought stolen goods from one of the many wholesalers, closeout businesses and distributors that supply their Amazon inventory.

Amazon’s marketplace of independent sellers accounts for over 60% of goods sold on the platform. It’s such a dominant force in e-commerce that it’s often the primary or even sole source of revenue for third-party sellers. Over the past decade, the rapid growth of the marketplace has fueled a parallel boom in counterfeiters and spammers trying to game the system, pushing Amazon to ramp up enforcement. 

Retailers, lawmakers and trade groups have repeatedly called attention to the growth of organized retail crime, saying that online marketplaces have contributed to the problem. Amazon’s recent crackdown serves as acknowledgment by the company that criminals are attempting to use the site as an outlet for illicitly obtained products.

While sellers can get suspended for any number of behaviors, from promoting unsafe or expired goods to providing bad customer experience and using inaccurate product descriptions, no allegation is harder to overcome than being labeled a seller of stolen items. Those merchants say Amazon has little interest in offering them second chances or much of an opportunity to defend themselves. 

CNBC spoke with six sellers who were recently suspended. Each provided us with the names of their suppliers. A review of their invoices, communications with suppliers and other documentation revealed a convoluted web of wholesale and liquidation companies that frequently overlapped, and advertised similar products, including espresso machines from Breville, Keurig coffee makers, Levoit humidifiers, LG computer monitors, Shark mops and vacuums, and Ninja appliances.

In an email to CNBC, Amazon said it’s working with authorities and doesn’t comment “on matters that are the subject of active law enforcement investigations.”

“Amazon does not allow independent sellers to list stolen goods in our store, and we work closely with law enforcement, retailers, and brands to stop bad actors and hold them accountable, including withholding funds, terminating accounts, and making law enforcement referrals,” the company said.

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Two years ago, an Amazon seller — we’ll call him Frank — shifted from selling home goods under his own brand to running a wholesale business. With so much competition in the marketplace, he viewed it as safer to sell products consumers know and trust rather than promoting an unfamiliar brand.

On March 14, his thriving three-year-old Amazon business came to a screeching halt. Frank, who asked that we not use his real name out of fear of retribution from Amazon and his suppliers, said that’s the day Amazon told him his account had been suspended for selling stolen goods. 

Frank said Amazon didn’t tell him which of his legions of products were allegedly stolen or offer any details that could help him track down the offenders. If he wanted any shot of appealing the suspension and saving his company, Frank would have to figure it all out himself.

Amazon wouldn’t comment on Frank’s case or any other specific sellers, but the company said in a statement that it regularly requests “invoices, purchase orders, or other proofs of sourcing” if it has concerns about a seller, and has an appeals process for merchants who believe enforcement decisions were erroneous.

One of Frank’s suppliers, according to documents he provided to CNBC, was KZ International, a large wholesale and distribution company owned by Kenzo Sobrie, a successful entrepreneur who has been described as “the youngest Amazon millionaire.”  

When Frank contacted Amazon about his suspension, an account health representative told him that KZ had been placed on an internal list of “risky suppliers.” Amazon declined to say if such a list exists.

In December, KZ’s warehouse in Huntington Beach, California, was raided by the California Highway Patrol, which seized pallets of Dyson vacuums, TP-Link routers, Ninja blenders and Breville espresso machines. A few weeks later, law enforcement carried out a similar raid at the warehouse of one of KZ’s clients. 

KZ sued two of it suppliers in March, claiming they provided the business with stolen goods. CHP ultimately recovered nearly $4 million worth of goods that it determined was “stolen cargo,” according to KZ’s complaint. Separately, Amazon said it shared information and intelligence with CHP in support of the investigation dubbed “Operation Overloaded.”

Frank still isn’t certain if his suspension was tied to products from KZ. His store has been offline for almost four months. Four other merchants suffered a similar fate right around the same time, according to information provided to CNBC. They all said they’d never been notified of selling stolen goods in their years on Amazon, and had no idea which of their products had been flagged or the suppliers who could be responsible. 

Cutthroat competition

Joe Quinlivan, vice president of global robotics, fulfillment and information technology at Amazon.com Inc., speaks during the Delivering the Future event at the Amazon Robotics Innovation Hub in Westborough, Massachusetts, US, on Thursday, Nov. 10, 2022. 

Bloomberg | Bloomberg | Getty Images

Amazon uses technology to track products from the moment it enters a fulfillment center, scanning for fraud and counterfeits. When it identifies potential problems, the company refers products to investigators and refers cases to law enforcement. For organized retail crime, the company has an internal group called the ORC Engagement Team, consisting of law enforcement professionals.

Amazon’s aggressive recent actions coincide with calls from lawmakers and government agencies to root out stolen goods on the site after a rise in organized shoplifting, which allegedly led to more stolen items on e-commerce platforms. New legislation requires online marketplaces to verify the identity of high-volume sellers in order to prevent fraud. 

Suspensions on Amazon are notoriously difficult to overcome. Sellers told CNBC that they’ve been given the chance to appeal their suspension in a judgment day-style video interview with an Amazon representative, where they can make their case for reinstatement. But it’s a longshot. 

The interview typically lasts about 45 minutes, and sellers are required to provide copies of their driver’s license, tax ID number, invoices, and bank statements, among other documents. Amazon is supposed to notify sellers whether they cleared the interview within five business days. But some merchants say they’re still waiting for an answer weeks after their interview date.

“You start from a guilty-until-proven-innocent standpoint, and then if you can prove that it’s a mistake, it’s possible to get reinstated,” said Chris McCabe, a former Amazon employee who has spent the past nine years helping suspended sellers get back up and running. “These people can’t produce proof, because the items are stolen or the suppliers won’t cooperate and give them proof.” 

‘It’s been devastating’

Amazon sellers are supposed to vet suppliers before they work with them. However, unraveling where the goods came from can be challenging, as it’s common for resold items to be bought and sold by several parties before being purchased by a merchant and listed on Amazon. 

Beyond providing Amazon with receipts and documentation, the sellers say there’s little they can do to resolve the situation. In the meantime, their accounts remain locked, forcing some to lay off their employees or even file for bankruptcy. 

“It’s been devastating to us, truthfully,” said Ricky Sala, who co-owns Oregon Prep Center, which launches and operates Amazon businesses for other companies. “We’re terrified to buy any wholesale products for customers right now because we don’t know what’s stolen, what’s not stolen, or what Amazon is going to say is stolen, even if it’s not stolen.”

Several of the accounts Sala oversees were suspended in recent months, which has cost his business some clients.

One of the main ways suspended sellers from across the country have gotten to know each other and swap stories is through chat groups. They found each other through forums, social media and mutual connections. In June, while sharing details of their suspensions with one another, several of them discovered that they had purchased goods from the same suppliers.

The Los Angeles area, home to two of the busiest trade ports in the country, has emerged as a hotbed for apparent organized retail criminal activity, based on the information provided by suspended sellers.

Several sellers told CNBC that the process of sourcing inventory changed during the Covid pandemic. Because of travel restrictions, they were unable to to meet prospective suppliers at trade shows or at their warehouses, so they would connect over social networks such as Instagram and Facebook, where they resorted to getting virtual tours of inventory. 

Suppliers would nudge sellers to subscribe to their Telegram channel, where they advertise which products they have in stock, and how much they cost. The channels have names like “Amazon wholesales,” “Bulk sales” and “Amazon deals.”

Sala, 28, said a lot of the suppliers he knows who use Telegram’s messaging service are in his age bracket, and prefer blasting notes to their large groups rather than sending mass emails.

“They want to communicate fully on their phone,” Sala said. 

Sellers are encouraged to act fast as the groups can have thousands of members and the offers typically get snapped up quickly. 

A CNBC review of more than a half-dozen such Telegram groups showed consumer electronics and small kitchen appliances were some of the most popular products. Sellers told CNBC they would often order hundreds of thousands of dollars worth of products through these groups.

Even though travel reopened as the pandemic eased, much of the process remained virtual. Sellers who wanted to visit a supplier’s warehouse to check out inventory might find themselves unable to get hot products because competitors would snatch them up. They couldn’t afford to wait.

To manage costs, sellers rarely touch the merchandise. Instead, they rely on distributors to ship products into Amazon’s warehouses, where the e-retailer handles the sorting, packing and preparing of items for delivery through a popular program known as Fulfillment by Amazon, or FBA.  

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A seller in Miami said in an interview that in the back half of last year, he began working with a handful of new suppliers he’d found on Instagram, hoping to expand into the popular home appliances category. 

The merchant, who asked to remain anonymous, paid over half a million dollars for pallets of air fryers, food processors, and espresso machines, according to invoices and bank statements reviewed by CNBC.  

The documents showed that several of the suppliers claimed to have purchased the items directly from brands or liquidators. The Miami merchant said the suppliers offered the goods at “regular wholesale” prices.

On March 17, Amazon suspended his account for allegedly selling stolen items. In correspondence between the seller and Amazon, the company refused to say which products were in violation. 

He contacted the FBI, hoping law enforcement might be able to help. Officials opened a report, but said there was little they could do without knowing which products were stolen. 

One New York-based merchant said that on May 6, Amazon froze $17,000 worth of “unsuitable inventory,” which an account rep told him signified it was stolen goods. Amazon sent over a list of dozens of products that had violated its policies.

“We have taken this measure because we believe that your account is offering items that are unsuitable and may have been used to engage in deceptive or illegal activity that harms our customers, other selling partners, and our store,” according to a copy of the notice, which was viewed by CNBC. 

The seller tracked down the products and provided as many invoices as he could to Amazon as part of his appeal interview on June 1. He was never suspended, but the inventory remains frozen more than a month later.

Several sellers said they reached out to the attorney general’s office in Amazon’s home state of Washington to raise awareness about what was happening. The attorney general’s office contacted the company in June about the suspensions, sources told CNBC.

Amazon confirmed that it’s in contact with the Washington State Office of the Attorney General on the topic of organized retail crime but didn’t provide details. The attorney general’s office didn’t respond to CNBC’s requests for comment.

Tracing the stolen goods supply chain 

In tracing the supply chain for suspended sellers, some patterns started to emerge. 

At least three sellers purchased computer monitors, air fryers and other goods from Ngo Wholesale Distributors, also known as Ngo Trading Co., which has addresses in Santa Fe Springs, part of Los Angeles County, and Garden Grove, just south in Orange County.  

Tien Ngo, the company’s owner, told CNBC in an interview that he has purchased products from other southern California suppliers, including a company named Stride Trading, which is based outside of Los Angeles.

“They said they weren’t stolen goods, but I never looked into their supply chain,” Ngo said, regarding his conversations with the suppliers. “I didn’t want to jeopardize the existing relationship.” 

Stride was listed as a supplier for other suspended sellers who spoke to CNBC. Because Amazon doesn’t provide details on the suppliers, CNBC couldn’t determine if its name has come up repeatedly by coincidence. Stride didn’t respond to multiple requests for comment.

A Keurig Green Mountain machine

Daniel Acker | Bloomberg | Getty Images

One seller said he was told by a Ngo employee that the suspensions were due to the recent CHP crackdown. The employee sent the seller a link to a news report about CHP’s “Operation Overloaded,” in which officers in May arrested more than 40 suspects, and recovered roughly $50 million in stolen merchandise, as well as 20 stolen cargo trailers, multiple firearms and 13 gold bars. 

“Chances are stolen goods or similar ASINs/serial numbers are being bled in to every supply line,” the employee wrote. ASINs refers to the 10-digit code used to look up products on Amazon’s website. 

Complaints filed by KZ, the wholesaler and distributor in Huntington Beach, provide the clearest picture of what happened in the lead-up to the suspensions. 

In late March, KZ sued TV Wholesale Outlet, owned by Los Angeles resident Armen Babayan, alleging it sold the company $3.8 million worth of “illicitly obtained” goods. KZ said it learned the goods were stolen following raids by CHP of its facility. Now KZ is not only unable to sell the products but is also incurring “over $376,000 in shipping and storage fees, removal fees, and reserved inventory charges,” it said.

Additionally, KZ said it “has since become the subject of numerous claims by third-parties whose storefronts have been closed or frozen by Amazon because of the ‘stolen cargo.'” 

Babayan filed a motion to dismiss the complaint on June 14 and disputed KZ’s claims. 

KZ filed a separate lawsuit in May alleging another L.A.-area supplier, Juniper Holdings, sold the company over half a million dollars worth of stolen goods. A portion of those goods was seized by CHP when it raided KZ’s warehouse, the complaint said.  

KZ learned some products were stolen months before the raid, according to the complaint, after a client received a letter from TP-Link warning that routers it had sourced from KZ had been stolen. Juniper told KZ it couldn’t return the merchandise, the complaint said.

Babayan didn’t respond to a request for comment. Juniper CEO Cameron Webb denied the allegations in KZ’s lawsuit.

CNBC reached out to Sobrie, the owner of KZ, numerous times by phone and text at numbers we found for him in California, Florida and New Jersey. He didn’t respond.

The owner of the Huntington Beach property that was raided by law enforcement declined to provide a comment but acknowledged that raids had occurred and said Sobrie’s company was no longer a tenant.

Kevin Cole, Sobrie’s attorney, didn’t provide answers to questions about his client’s business activities or relationship to Amazon, writing in an email that “the allegations in our lawsuits speak for themselves.”

Sobrie is well known in Amazon reseller circles. He’s been profiled for his success selling wholesale goods on the site and can be seen in Instagram posts posing in luxury vehicles and sharing e-commerce business advice. 

Sobrie now runs a new wholesale company in New Jersey, KN Trading LLC, according to business records filed in the state. Its Telegram channel, which has over 1,100 subscribers, buzzes with new deals almost daily. A recent video posted on its Instagram page shows a warehouse stacked with boxes of goods, and employees loading packages onto UPS trucks. The caption reads, “Ready to boost your Amazon business? KN Trading is the partner you need!”

Meanwhile, the suspended sellers remain desperate for answers as they burn through cash. They’re almost certain to miss out on Prime Day, Amazon’s annual deal event, scheduled for next week, and can only hope they can get up and running in time to prepare for the holidays, the time of year when many retailers finally turn a profit. 

In the group chat, they check in with each other almost daily, swapping tips for their appeal interviews, looking for any way to increase their chances of getting their accounts back. 

One of them wrote in a recent message, “I’m praying we all get great news very soon and this will be a story that ended well.”

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Nvidia positioned to weather Trump tariffs, chip demand ‘off the charts,’ says Altimeter’s Gerstner

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Nvidia positioned to weather Trump tariffs, chip demand 'off the charts,' says Altimeter's Gerstner

Altimeter CEO Brad Gerstner is buying Nvidia

Altimeter Capital CEO Brad Gerstner said Thursday that he’s moving out of the “bomb shelter” with Nvidia and into a position of safety, expecting that the chipmaker is positioned to withstand President Donald Trump’s widespread tariffs.

“The growth and the demand for GPUs is off the charts,” he told CNBC’s “Fast Money Halftime Report,” referring to Nvidia’s graphics processing units that are powering the artificial intelligence boom. He said investors just need to listen to commentary from OpenAI, Google and Elon Musk.

President Trump announced an expansive and aggressive “reciprocal tariff” policy in a ceremony at the White House on Wednesday. The plan established a 10% baseline tariff, though many countries like China, Vietnam and Taiwan are subject to steeper rates. The announcement sent stocks tumbling on Thursday, with the tech-heavy Nasdaq down more than 5%, headed for its worst day since 2022.

The big reason Nvidia may be better positioned to withstand Trump’s tariff hikes is because semiconductors are on the list of exceptions, which Gerstner called a “wise exception” due to the importance of AI.

Nvidia’s business has exploded since the release of OpenAI’s ChatGPT in 2022, and annual revenue has more than doubled in each of the past two fiscal years. After a massive rally, Nvidia’s stock price has dropped by more than 20% this year and was down almost 7% on Thursday.

Gerstner is concerned about the potential of a recession due to the tariffs, but is relatively bullish on Nvidia, and said the “negative impact from tariffs will be much less than in other areas.”

He said it’s key for the U.S. to stay competitive in AI. And while the company’s chips are designed domestically, they’re manufactured in Taiwan “because they can’t be fabricated in the U.S.” Higher tariffs would punish companies like Meta and Microsoft, he said.

“We’re in a global race in AI,” Gerstner said. “We can’t hamper our ability to win that race.”

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YouTube announces Shorts editing features amid potential TikTok ban

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YouTube announces Shorts editing features amid potential TikTok ban

Jaque Silva | Nurphoto | Getty Images

YouTube on Thursday announced new video creation tools for Shorts, its short-form video feed that competes against TikTok. 

The features come at a time when TikTok, which is owned by Chinese company ByteDance, is at risk of an effective ban in the U.S. if it’s not sold to an American owner by April 5.

Among the new tools is an updated video editor that allows creators to make precise adjustments and edits, a feature that automatically syncs video cuts to the beat of a song and AI stickers.

The creator tools will become available later this spring, said YouTube, which is owned by Google

Along with the new features, YouTube last week said it was changing the way view counts are tabulated on Shorts. Under the new guidelines, Shorts views will count the number of times the video is played or replayed with no minimum watch time requirement. 

Previously, views were only counted if a video was played for a certain number of seconds. This new tabulation method is similar to how views are counted on TikTok and Meta’s Reels, and will likely inflate view counts.

“We got this feedback from creators that this is what they wanted. It’s a way for them to better understand when their Shorts have been seen,” YouTube Chief Product Officer Johanna Voolich said in a YouTube video. “It’s useful for creators who post across multiple platforms.”

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Tech stocks sink after Trump tariff rollout — Apple heads for worst drop in 5 years

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Tech stocks sink after Trump tariff rollout — Apple heads for worst drop in 5 years

CEO of Meta and Facebook Mark Zuckerberg, Lauren Sanchez, Amazon founder Jeff Bezos, Google CEO Sundar Pichai, and Tesla and SpaceX CEO Elon Musk attend the inauguration ceremony before Donald Trump is sworn in as the 47th U.S. president in the U.S. Capitol Rotunda in Washington, Jan. 20, 2025.

Saul Loeb | Via Reuters

Technology stocks plummeted Thursday after President Donald Trump’s new tariff policies sparked widespread market panic.

Apple led the declines among the so-called “Magnificent Seven” group, dropping nearly 9%. The iPhone maker makes its devices in China and other Asian countries. The stock is on pace for its steepest drop since 2020.

Other megacaps also felt the pressure. Meta Platforms and Amazon fell more than 7% each, while Nvidia and Tesla slumped more than 5%. Nvidia builds its new chips in Taiwan and relies on Mexico for assembling its artificial intelligence systems. Microsoft and Alphabet both fell about 2%.

Semiconductor stocks also felt the pain, with Marvell Technology, Arm Holdings and Micron Technology falling more than 8% each. Broadcom and Lam Research dropped 6%, while Advanced Micro Devices declined more than 4% Software stocks ServiceNow and Fortinet fell more than 5% each.

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The drop in technology stocks came amid a broader market selloff spurred by fears of a global trade war after Trump unveiled a blanket 10% tariff on all imported goods and a range of higher duties targeting specific countries after the bell Wednesday. He said the new tariffs would be a “declaration of economic independence” for the U.S.

Companies and countries worldwide have already begun responding to the wide-sweeping policy, which included a 34% tariff on China stacked on a previous 20% tax, a 46% duty on Vietnam and a 20% levy on imports from the European Union.

China’s Ministry of Commerce urged the U.S. to “immediately cancel” the unilateral tariff measures and said it would take “resolute counter-measures.”

The tariffs come on the heels of a rough quarter for the tech-heavy Nasdaq and the worst period for the index since 2022. Stocks across the board have come under pressure over concerns of a weakening U.S. economy. The Nasdaq Composite dropped nearly 5% on Thursday, bringing its year-to-date loss to 13%.

Trump applauded some megacap technology companies for investing money into the U.S. during his speech, calling attention to Apple’s plan to spend $500 billion over the next four years.

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