Newegg being sued

[Mondo Freaks]

https://finance.yahoo.com/m/44bbc188-b453-3610-b91c-3bae66c22a3c/ss_korean-banks-sue-southern.html

Newegg is being sued for allegedly being part of a fraudulent scheme where they ordered a bunch of stuff from a manufacturer that obtained loans from Korean banks.

Four South Korean banks filed a lawsuit against Newegg, Inc. on Friday alleging that the City of Industry company, which operates the computer parts and accessories retailer Newegg.com, conspired with a South Korean hardware manufacturer to defraud the banks of hundreds of millions of dollars. The lawsuit, filed in U.S. District Court in Los Angeles, alleges that Newegg, along with computer wholesaler ASI Corp., made fraudulent orders for home-theater personal computers from Moneual, a Korean hardware manufacturer. Moneual, accused of masterminding the scheme, used these phony orders to secure financing from banks.

So another company called ASI was also in on the deal. I actually worked for them when I lived in Fremont, CA.

 

[m52nickerson]

If true, Newegg done fucked up.

 

[KidBaize]

"In the end, Moneual secured more than $3 billion in loans from 10 major Korean banks through the intricate scheme of circular transactions."

That's a lot of financing. How big is Moneual? They must have reported a massive amount of phony sales to get 3 billion in loans.

 

[Madmick]

If true, Newegg done fucked up.

If true, one wonders if this is big enough to cause the downfall of the company.

It's not like the world needs Newegg.

 

[jefferz]

If true, one wonders if this is big enough to cause the downfall of the company.

It's not like the world needs Newegg.

I'd rather not see them go the way of Tiger Direct.

 

[Scerpi]

I'd rather not see them go the way of Tiger Direct.

What's going on with Tiger Direct?

 

[Madmick]

What's going on with Tiger Direct?

They went out of business. They were one of the only really big merchants who could compete with Amazon, Best Buy, and Newegg, and put pressure on them.

*Edit* Hmmm...at least I thought they did. I just searched and saw they're still slinging hardware. I remember they had clearance sales a few years back that were insane to rid themselves of inventory, and an announcement they were going out of business. I guess they pulled the old furniture warehouse stunt: "Everything must go!"

 

[KidBaize]

They went out of business. They were one of the only really big merchants who could compete with Amazon, Best Buy, and Newegg, and put pressure on them.

*Edit* Hmmm...at least I thought they did. I just searched and saw they're still slinging hardware. I remember they had clearance sales a few years back that were insane to rid themselves of inventory, and an announcement they were going out of business. I guess they pulled the old furniture warehouse stunt: "Everything must go!"

I just checked the Wiki and apparently two of the founders are in prison for fraud and tax evasion. I wonder if the similarities to Newegg are just a coincidence or if fraud and kickbacks are common in that industry.

 

[AtomicPanther]

If true, one wonders if this is big enough to cause the downfall of the company.

It's not like the world needs Newegg.

Like Egghead?

 

[jefferz]

They went out of business. They were one of the only really big merchants who could compete with Amazon, Best Buy, and Newegg, and put pressure on them.

*Edit* Hmmm...at least I thought they did. I just searched and saw they're still slinging hardware. I remember they had clearance sales a few years back that were insane to rid themselves of inventory, and an announcement they were going out of business. I guess they pulled the old furniture warehouse stunt: "Everything must go!"

I can still log into my old account and see all my orders. I don't think I'd order anything from them today, their website looks really sketchy.

 

[loyalyolayal]

They went out of business. They were one of the only really big merchants who could compete with Amazon, Best Buy, and Newegg, and put pressure on them.

*Edit* Hmmm...at least I thought they did. I just searched and saw they're still slinging hardware. I remember they had clearance sales a few years back that were insane to rid themselves of inventory, and an announcement they were going out of business. I guess they pulled the old furniture warehouse stunt: "Everything must go!"

Hey!.. Sony guts.

 

[thoughtsone]

Damn ASI was is huge supplier to some of the smaller computer/server manufacturers. When I ran my server business about 6 years back we probably gave them 50K a month in sales, its funny if true they worked with Newegg on this, they always did seem shady (but cheap and decent service).

 

[Mondo Freaks]

Damn ASI was is huge supplier to some of the smaller computer/server manufacturers. When I ran my server business about 6 years back we probably gave them 50K a month in sales, its funny if true they worked with Newegg on this, they always did seem shady (but cheap and decent service).

Was Carlo your sales rep?

 

[Swing]

I guess I could get by without them and just order parts from somewhere else if this blows up, but I've always liked Newegg. I'm used to the way their site is set up, and I've always had fairly fast deliveries just using standard shipping (although Amazon's deliveries have gotten pretty quick too).

 

[thoughtsone]

Was Carlo your sales rep?

No an asian lady name Lynn, I dont remember but was Carlo a sales manager? It sounds familiar.

 

[Mondo Freaks]

No an asian lady name Lynn, I dont remember but was Carlo a sales manager? It sounds familiar.

I think so. I worked at ASI around 2009-2010. Carlo was my boss. He was a team leader that eventually became sales manager I think. I just ask because he had a lot of server customers.

 

[Madmick]

I just checked the Wiki and apparently two of the founders are in prison for fraud and tax evasion. I wonder if the similarities to Newegg are just a coincidence or if fraud and kickbacks are common in that industry.

I can still log into my old account and see all my orders. I don't think I'd order anything from them today, their website looks really sketchy.

This aspect of the liquidation period had completely slipped my mind. Yeah, shitty.

NewEgg has had numerous brushes with unethical business behavior before, but I always just wrote that off to the unavoidable bruises from playing big boy ball with the merciless big boys. That's business. This sort of defrauding scheme goes way beyond any defensible measure taken in order to preserve's one's business and capability to stay competitive.