American tax officials

The verdict in Chapter 318 is as follows:

"Chief David, you can continue with our previous topic."

David nodded and said, "As mentioned earlier, Amazon has been charging users hidden fees, which I call hidden taxes. Let me explain in detail how they do it."

"First, Amazon's strategy was to use Prime to build, expand, and strengthen barriers to entry. One result is that Amazon now has an overwhelming monopoly on online shoppers. Once it gained monopoly power, Amazon lowered prices by charging third-party sellers fees. As a third-party seller, you have to pay to list your products on Amazon, use Amazon's warehousing services (Amazon Delivery), and Google services. If you don't pay, you can't get to the website locations that consumers click on."

"Therefore, online shoppers may not be true 'customers,' but rather 'products' that Amazon provides to third-party sellers. These third-party sellers must pay Amazon its demands and related fees, or they will lose market access."

Currently, fees collected by Amazon from third-party sellers have grown to nearly 50% of its revenue, and Amazon uses these funds (estimated at $1230 billion last year) to pay for all the services bundled with Prime, including "free" shipping, video services, music services, Twitch, etc.

"And these third-party sellers, in turn, raise prices for consumers and then send the money back to Amazon in the form of fees..."

On the defendant's stand and in the audience, as David revealed their secrets bit by bit, the faces of Lakluva, Jeff, and the other high-ranking executives of Amazon turned completely pale.

The thing they feared has finally happened, and now they are completely helpless. They are like fish on a chopping board, at the mercy of others.

Many of them now regret their actions, regretting that they should have tried to reach a compromise when the IRS announced its investigation.

Or perhaps they should have cashed out their shares back then, because it was foreseeable that their group's stock price would soon experience a sharp drop, and the impact of this event was so great that even they couldn't predict how low it would fall.

"Wardfa, Amazon actually sold us to a third party as if we were a product? This is outrageous!"

"Fuck, no wonder there's always this bunch of bundled services that pop up after you subscribe to this $139 fee every year! So that's why!"

"If this is true, then Amazon is truly despicable!"

"I really thought Amazon's free shipping service was subsidizing us consumers, but it turns out they actually made a deal with third-party sellers and sold us out!"

Meanwhile, after hearing David's explanation, the onlookers became furious.

Why do so many people choose Amazon?

Not only because the products are of high quality and inexpensive, but also because of the free delivery service.

They had always believed that this service was a benefit and subsidy from Amazon for consumers like themselves.

But now that I hear this, it's not welfare or subsidies at all. It's a complete exploitation of them without their knowledge, treating them like韭菜 (leeks, a metaphor for being exploited)!

In court, David continued, "This is why Amazon's logistics operations lose tens of billions of dollars every year. Of course, it can't really be called a loss, because they only appear to be losing money. In reality, they make a fortune through third-party bundling services and rebates from sellers..."

"Your Honor, I object to the prosecution's charges; they are utterly baseless slander!"

Finally, Lacruyne, on the defendant's side, couldn't hold back any longer.

He knew very well that David's words had ignited the anger of the entire nation towards Amazon, and if the charges were proven true, not only would he be finished, but the company would also face the most serious crisis in its history.

However, there's no need to be so pessimistic now.

What David said was reasonable, well-founded, and indeed true.

However, this hidden consumption involves a wide range of third-party sellers and various partner organizations, and he doesn't really believe that David can obtain enough evidence.

"Your Honor, I have a data list and statements from 366 merchants on the Amazon platform. Furthermore, I have invited 123 merchant representatives to come here, who are ready to testify in court to verify the authenticity of this matter!"

On the defendant's side, upon hearing these words, Lakruwa and the others slumped into their chairs.

They had just been clinging to a sliver of hope, thinking that the hidden costs involved were enormous and that David might not be able to convict them of the crime.

But now, they've obtained a data list and testimonies from 366 businesses, and even brought in a large portion of the businesses involved.

What does it mean that these people were invited here?

This means that the Los Angeles IRS must have already taken care of it for me to be able to come here.

This also means that if they want to refute the arguments, they would have to engage in a fierce verbal battle with these 123 business leaders. Even if each of them had ten mouths, they probably still wouldn't be able to explain themselves clearly!

In the gallery, Jeff and the others were completely stunned, as if they had lost their souls. It wasn't until the witnesses walked out of the passageway that he came back to his senses, and he immediately stood up and walked out of the courtroom.

"Your Honor, my name is Armando Zoe, and I am a merchant on the Amazon platform. I joined the platform in 2019, and a year later, my sales exceeded $500 million. After that, people from Amazon approached me and forced me to sign a series of agreements. These agreements were actually hidden charges for consumers. I was unwilling at the time because I knew very well that it would be very serious if consumers found out about this. However, Amazon was very domineering, and in the end, I had no choice but to sign them."

"Your Honor, my name is Jurich, and I am a merchant on the Amazon platform. Like you, after joining Amazon and reaching a certain spending threshold, I was forced to sign a series of agreements by Amazon..."

In the following period, the 123 business representatives took turns explaining the agreement they had signed with Amazon Group.

Of course, this also includes hidden consumer fraud schemes.

"Fuck you, Amazon Group, what excuses do you have now?"

"123 merchants have already testified in court, all accusing Amazon of charging hidden fees. The charges are practically undeniable!"

"Amazon Group, you will pay the price for your fraudulent activities!"

Although what David just said seemed plausible, it was ultimately just talk without any concrete evidence.

Now that so many merchants have testified in court, the evidence is undoubtedly more than sufficient. Therefore, consumers watching the live stream are calling for Amazon to be severely punished to vent their anger.

In court, after hearing the merchants' testimonies, Nicola reviewed the data list again, then turned her gaze to the defendant's dock and asked, "Defendant's representative, do you have any objections to the merchants' testimonies and the data list I have here?"

Lakruva and the others looked ashen-faced, none of them showing any intention of speaking, let alone refuting.

Meanwhile, David, reminded by Kepper, gave Nicola a look, then walked out of the courthouse, took the phone Kepper handed him, and asked, "What's wrong, Deputy Chief Donald?"

"The White House called. They're also watching this live trial. To avoid economic turmoil, the White House wants to keep Jeff out of it, understand?"

David wasn't very surprised to hear this.

Jeff is, after all, the founder of Amazon and a four-time world's richest man. If he is sentenced to prison, Amazon, having lost its leader, may face the risk of collapse.

The impact on the American economy at that time will be immeasurable.

However, he didn't have any grudges against Jeff Adamson. Since his superiors told him not to touch Jeff, he wouldn't bother. It didn't really matter to him.

"Okay, I understand, Deputy Director Donald."

"Alright, then you should finish up the rest of the business as soon as possible. We also need to prepare for your arrival."

Upon hearing the second half of Donald's sentence, David's heart instantly raced with excitement.

Yes, now the tax investigation of Amazon is just waiting for the final verdict. If it is completed, then he can prepare to report to headquarters.

Will he finally have a place in the power center of the IRS?

After calming himself down a bit, he returned to the courtroom, went down to the judge's bench, spoke with Nicola for a few minutes, and then went back inside.

Nicola glanced at the Amazon Group's section in the gallery and said, "Mr. Phil Merlin, Mr. Simones, and Mr. Becker, please come to the courtroom."

The three men, who were already ashen-faced, turned even paler upon hearing this. They were already at the final sentencing stage, so what did it mean to call them to court?

Of course, we should make the three of them take the blame for all these crimes!

But there's nothing we can do; after all, one is the tax director, the other the finance director, and the other the vice president in charge of Amazon's platform business.

These charges involve financial fraud, tax evasion, and platform fraud against consumers, which are their primary responsibilities, so they naturally have to take the blame.

As the three walked to the courtroom, Nicola stood up and announced the verdict: "This court finds Amazon guilty of VAT fraud, guilty of illegally receiving tax subsidies, and guilty of suspected hidden taxation. The verdict is as follows."

"First, refund all tax subsidies from 17 to the present."

"Second, the total value-added tax paid since 17 is US$98.36 billion."

"Third, a total of US$73 billion in hidden taxes were paid."

"Fourth, the penalty of $80 billion, plus the tax amount, will bring the total amount to $251.36 billion to be paid to the IRS."

Fifth, consumers who paid hidden fees will receive ten times the amount in compensation!

"Sixth, Firmer, Simeone, Becker, and Mr. Lacruyne, as the CFO, tax director, chief legal counsel, and vice president of platform operations of Amazon Group, you bear primary responsibility for these three charges."

"Any objections to the 20-year prison sentence you are now facing?"

After the verdict was announced, the four people whose names were mentioned felt a mix of joy and sorrow.

Tragically, he was imprisoned for 20 years.

On the other hand, the good news is that, according to the IRS's past practices, once a crime is proven, the sentence can easily be thousands or even tens of thousands of years. They've only sentenced them to 20 years, and there's no mention of being unable to get parole. This is already a stroke of good luck amidst misfortune.

Of course, David had originally intended to adopt the sentencing standards used against tax evaders, but Donald's call just now forced him to change his mind.

This matter has alarmed the White House, and the White House has also given a message, although it only tells him not to mess with Jeff, but it is also a veiled message telling him to keep his actions low-key.

So the 20-year sentences for these individuals are a gesture of respect to the White House, and I believe they will understand.

Jeff, who had returned to the gallery, felt a chill run down his spine upon hearing the verdict.

It's all thanks to the network of relationships he's built up over the years, and the fact that his company is now large enough to influence the economy; otherwise, he might be the one standing in court right now.

"Such a serious crime, how come he only got 20 years? And the most important thing is that Jeff, as the boss, didn't receive any punishment at all. It's such a pity..."

"Although Jeff wasn't punished, the more than 200 billion in taxes and fines is enough to make them wince. Most importantly, they have to compensate us consumers who paid hidden fees tenfold, which will definitely make them bleed even more. Great!"

"We have to thank the Los Angeles IRS, the court, and Chief David for this. Otherwise, we wouldn't have gotten ten times the compensation, and we wouldn't even know when we discovered the hidden costs, or how long we would have been exploited!"

"..."

Upon hearing the verdict, some members of the public expressed regret, as the 20-year sentence was too lenient compared to previous tax evaders. Most importantly, Jeff, as the leader of the group, did not receive any punishment.

However, some people were very happy because they would receive ten times the amount of the hidden fees, which naturally made them very grateful to the IRS and David.

"Defendant, are you sure you have no objections?"

Listening to Nicola's questioning on stage once again, the people from the Amazon Group looked at each other, but in the end no one spoke, seemingly accepting the result.

In reality, they have no choice but to accept it.

After all, the hidden tax scandal has already been exposed, and their best public relations approach is to accept the punishment and let the public have a positive impression of them as someone who can admit their mistakes and correct them.

Secondly, even if they disagree, can they appeal to other courts or the Supreme Court?

In the end, they'll still have to go through trial in IRS court. If David gets angry and concocts a few more charges against them, they might have to face even more severe penalties.

So for them, accepting this ruling is the best outcome.

(End of this chapter)