Inside a multimillion dollar fake Kindle book scam

Vancouver-based engineer-turned-"entrepreneur" Valeriy Shershnyov published thousands of titles in the Kindle store, "books" of typo-riddled nonsense that he upranked with a system of bots that gamed Amazon's fraud-detection systems, allowing him to sell more than $3M worth of garbage to unsuspecting Amazon customers.

Shershnyov failed to put a password on the online database where he tracked performance of his books and bots. The database was discovered by MacKeeper Security Research Center, and analyzed by investigative journalist Zack Whittaker, who has laid the scam bare, with facts, figures and methodologies.

Shershnyov paid people a few dollars to write his books through services like Fiverr, then, after they were listed on Amazon, he briefly freeflagged them, allowing his bots to mass-download them, shooting them to the top of the Amazon charts (his bots anonymized themselves using Tor, so Amazon couldn't see that all the downloads were coming from the same place). He spread out his books among multiple publisher accounts, which meant that when Amazon shut down one of the accounts, the rest could continue to pay out for him.

None of the books were hugely successful — at most they made a few hundred dollars — but Shershnyov injected thousands of books into the Kindle store, and the profits mounted.

Once the royalties (and refunds, rarely) begin to trickle in, the transactions are recorded in Amazon's sales and royalties reports. Shershnyov's royalty report showed that itemized revenues from the 11 master accounts generated $2.44 million since June 2015, which is when Amazon changed the terms in which authors were paid based on the number of books loaned. (It's not known what was made during the six months prior to that, which was when the scam began.)

The scheme also generated $83,340 in physical book sales since early March 2016.

Shershnyov was so successful with his scheme that he created near-identical databases for his girlfriend, Anna Mandryko, a former investment advisor.

Since we reached out on Thursday, neither Shershnyov or Mandryko have responded to a request for comment. But both servers were pulled offline within hours of the email. Shershnyov subsequently deleted his Twitter account, scrubbed his LinkedIn page, and pulled his company's site offline — though, a cache remains online.)

Revealed: How one Amazon Kindle scam made millions of dollars [Zack Whittaker/ZDNet]

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