Sessions and DOJ take down online scammer Azim Makanojiya

Jeff Sessions and his team at the DOJ are trying to make America great again by cutting down criminals at neck breaking pace. Last week, we reported how the Department of Justice has reported 1,260 convictions of members of transnational criminal organizations and their subsidiaries since Jan. 1, 2017.

Today, the Department of Justice announced the take down of an e-commerce company, Zaappaaz and its top executive for duping its customers online.

Zaappaaz and its president, Azim Makanojiya will be pleading guilty to conspiring to fix prices for customized promotional products sold online to customers in the United States.

According to a 2014 article on the website THE ECONOMIC TIMES, Azim Makanojiya started the company at the age of 19, and emerged as the largest online seller of silicon wrist bands in the US.

Azim Makanojiya, who was born in Mumbai and raised in Houston, Texas, founded Wrist-Band.com when he was a full-time student attending the University of Houston. After just one year in business, his website Wrist-Band.com reportedly pulled in over $6.9 million in revenue, claims the article.

THE ECONOMIC TIMES states that in 2011,  Azim Makanojiya’ company was listed by Inc. Magazine as one of the 500 fastest growing companies in the U.S. by  Inc Magazine. Out of the 500 companies listed, Azim’s company was ranked 31.

According to Azim, about 30% of the company’s sales were direct to consumers, which include schools, graduation events, etc. About 70% of sales were to corporate clients, including Google, Ford, MTV, Coca-Cola and many others.

According to an interview Azim gave in 2015 with americanbazaaronline.com, he said his father, Amirbanu Makanojiya, came to the United States in 1984. Azim and his mother initially remained in India but made the journey to Houston two years later, when Azim was just a year old.

Azim said in one interview, “We don’t have a single equipment that touches the product. If you order a product from us, we don’t touch it.” He continued, “We’re a technology company and we’re basically providing that portal for you to place your order and get your products seamlessly.” But in another interview he alleged to own a warehouse in China.

In the interview, Azim claims the following: “We have pioneered a way to give the customization opportunity to the general public; to create one wristband for as low as $2. This advancement in technology and hours of R&D has given millions of people and organizations the ability to raise over billions of dollars for their personal ventures, charities or various causes. Before Wrist-band.com, all of this was not possible. In all honestly, I believe it has been a win-win situation for both sides.”

But according to the DOJ, an investigation revealed that Azim used social media platforms from 2014 until June 2016, to fix the prices of customized promotional products sold online, including wristbands and lanyards. In addition to agreeing to plead guilty, he has agreed to pay a $1.9 million criminal fine.

Here is the press release from the DOJ:

Aug 7, 2017
E-Commerce Company and Top Executive Agree to Plead Guilty to Price-Fixing Conspiracy for Customized Promotional Products

Conspiracy Was Conducted Through Social Media and Encrypted Messaging Applications.

An e-commerce company and its top executive have agreed to plead guilty to conspiring to fix prices for customized promotional products sold online to customers in the United States. Zaappaaz Inc. (d/b/a WB Promotions Inc., Wrist-Band.com and Customlanyard.net) and its president Azim Makanojiya agreed to plead guilty to a one-count criminal violation of the Sherman Act.

Acting Assistant Attorney General Andrew Finch of the Department of Justice’s Antitrust Division, Acting U.S. Attorney Abe Martinez and Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Division made the announcement.

According to the felony charges filed today in the U.S. District Court for the Southern District of Texas in Houston, the conspirators attended meetings and communicated in person and online. The investigation has revealed that the conspirators used social media platforms and encrypted messaging applications, such as Facebook, Skype and Whatsapp, to reach and implement their illegal agreements. Specifically, the defendants and their co-conspirators agreed, from as early as 2014 until June 2016, to fix the prices of customized promotional products sold online, including wristbands and lanyards. In addition to agreeing to plead guilty, Zaappaaz has agreed to pay a $1.9 million criminal fine.

“As today’s charges show, criminals cannot evade detection by conspiring online and using encrypted messaging,” said Acting Assistant Attorney General Andrew Finch. “In addition, today’s charges are a clear sign of the Division’s commitment to uncovering and prosecuting collusion that affects internet sales. American consumers have the right to a marketplace free of unlawful collusion, whether they are shopping at retail stores or online.”

“Schemes like the defendants’ cause financial harm to consumers who purchase goods and services and to businesses who sell goods and services in compliance with the laws of the United States,” said Acting U.S. Attorney Abe Martinez. “The United States will continue to investigate and prosecute individuals and businesses who seek to gain an illegal advantage.”

“The FBI stands ready to protect consumers from unscrupulous business practices,” said Special Agent in Charge Perrye K. Turner. “Antitrust laws help protect the competitive process for the benefit of all consumers.”

Makanojiya is charged with price fixing in violation of the Sherman Act which carries a maximum sentence of 10 years in federal prison and a maximum fine of $1 million for individuals. The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine.

Both defendants have agreed to cooperate with the Antitrust Division’s ongoing investigation. The plea agreements are subject to court approval.

This prosecution arose from an ongoing federal antitrust investigation into price fixing in the online promotional products industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section with the assistance of the FBI’s Houston Field Office. Anyone with information on price fixing or other anticompetitive conduct in the customized promotional products industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.

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