74 Alleged Fraudsters Arrested in the United States
Federal authorities announced today a significant
coordinated effort to disrupt Business Email Compromise (BEC) schemes that are
designed to intercept and hijack wire transfers from businesses and
individuals, including many senior citizens.
Operation reWired, a coordinated law enforcement effort by the U.S.
Department of Justice, U.S. Department of Homeland Security, U.S. Department of
the Treasury, U.S. Postal Inspection Service, and the U.S. Department of State,
was conducted over a four-month period, resulting in 281 arrests in the United
States and overseas, including 167 in Nigeria, 18 in Turkey and 15 in
Ghana. Arrests were also made in France,
Italy, Japan, Kenya, Malaysia, and the United Kingdom (UK). The operation also resulted in the seizure of
nearly $3.7 million.
BEC, also known as “cyber-enabled financial fraud,” is a
sophisticated scam often targeting employees with access to company finances
and businesses working with foreign suppliers and/or businesses that regularly
perform wire transfer payments. The same
criminal organizations that perpetrate BEC also exploit individual victims,
often real estate purchasers, the elderly, and others, by convincing them to
make wire transfers to bank accounts controlled by the criminals. This is often
accomplished by impersonating a key employee or business partner after
obtaining access to that person’s email account or sometimes done through
romance and lottery scams. BEC scams may
involve fraudulent requests for checks rather than wire transfers; they may
target sensitive information such as personally identifiable information (PII)
or employee tax records instead of, or in addition to, money; and they may not
involve an actual “compromise” of an email account or computer network. Foreign citizens perpetrate many BEC
scams. Those individuals are often
members of transnational criminal organizations, which originated in Nigeria
but have spread throughout the world.
“The Department of Justice has increased efforts in taking
aggressive enforcement action against fraudsters who are targeting American
citizens and their businesses in business email compromise schemes and other
cyber-enabled financial crimes,” said Deputy Attorney General Jeffrey
Rosen. “In this latest four-month
operation, we have arrested 74 people in the United States and 207 others have
been arrested overseas for alleged financial fraud. The coordinated efforts
with our domestic and international law enforcement partners around the world
has made these most recent actions more successful. I want to thank the FBI,
more than two dozen U.S. Attorney’s Offices, U.S. Secret Service, U.S. Postal
Inspection Service, Homeland Security Investigations, IRS Criminal
Investigation, U.S. Department of State’s Diplomatic Security Service, our
partners in Nigeria, Ghana, Turkey, France, Italy, Japan, Kenya, Malaysia, and
the UK, and our state and local law enforcement partners for all of their hard
work to combat these fraud schemes and protect the hard-earned assets of our
citizens. Anyone who engages in
deceptive practices like this should know they will not go undetected and will
be held accountable.”
“The FBI is working every day to disrupt and dismantle the
criminal enterprises that target our businesses and our citizens,” said FBI
Director Christopher A. Wray.
“Cooperation is the backbone to effective law enforcement; without it,
we aren’t as strong or as agile as we need to be. Through Operation reWired, we’re sending a
clear message to the criminals who orchestrate these BEC schemes: We’ll keep
coming after you, no matter where you are.
And to the public, we’ll keep doing whatever we can to protect you. Reporting incidents of BEC and other
internet-enabled crimes to the IC3 brings us one step closer to the
perpetrators.”
“The Secret Service has taken a multi-layered approach to
combating Business Email Compromise schemes through our Global Investigative
Operations Center (GIOC),” said U.S. Secret Service Director James M. Murray.
“Domestically, the GIOC assists Secret Service Field Offices and other law
enforcement partners with analysis and investigative tactics to enhance the
impact of local BEC investigations.
Internationally, the GIOC targets and identifies transnational organized
crime networks that perpetrate these cyber-enabled financial fraud
schemes. Through this approach, the
Secret Service continues to strive to protect the citizens of the United States
and our financial infrastructure from these complex crimes.”
“Homeland Security Investigations (HSI), together with its
law enforcement partners, has proven once again, that cyber-enabled financial
fraud will not be tolerated in the United States,” said Acting Director Matthew
T. Albence of U.S. Immigration and Customs Enforcement (ICE). “Operation
reWired sends a clear message to criminals, that no matter how or where crimes
are committed, we will do everything within our means to dismantle criminal
enterprises that seek to manipulate U.S. institutions and taxpayers.”
“The consequences of this type of fraud scheme are far
reaching, affecting not only people in the United States, but also across the
world,” said Chief Postal Inspector Gary Barksdale. “This investigation is just another example
of how effective law enforcement agencies can be when they join forces. By working together, we can keep our
communities and our vulnerable populations safe from financial
exploitation. The U.S. Postal Inspection
Service is proud to be at the forefront of the fight against fraud and Postal
Inspectors will continue to adapt to the ever changing landscape to stop the
scammers and protect our customers.”
“In unraveling this complex, nationwide identity theft and
tax fraud scheme, we discovered that the conspirators stole more than 250,000
identities and filed more than 10,000 fraudulent tax returns, attempting to
receive more than $91 million in refunds,” said Chief Don Fort of IRS Criminal
Investigation. “We will continue to work
with our international, federal and state partners to pursue all those responsible
for perpetrating this fraud, preying on innocent victims and attempting to
cheat the U.S. out of millions of dollars.”
“The investigation of these crimes crossed international
borders,” said Director Todd J. Brown of the U.S. Department of State’s
Diplomatic Security Service (DSS). “Today’s
charges are another successful example of our commitment to working together
with both foreign colleagues abroad as well as local, state and federal law
enforcement partners here at home in the pursuit of those who commit
cyber-related financial crimes.”
A number of cases involved international criminal
organizations that defrauded small to large sized businesses, while others
involved individual victims who transferred high dollar funds or sensitive
records in the course of business. The
devastating effects these cases have on victims and victim companies affect not
only the individual business but also the global economy. According to the Internet Crime Complaint
Center (IC3), nearly $1.3 billion in loss was reported in 2018 from BEC and its
variant, Email Account Compromise (EAC), nearly twice as much as was reported
the prior year. BEC and EAC are
prevalent scams and the Justice Department along with our partners will
continue to aggressively pursue and prosecute the perpetrators, including money
mules, regardless of where they are located.
Money mules may be witting or unwitting accomplices who
receive ill-gotten funds from the victims and then transfer the funds as
directed by the fraudsters. The money is
wired or sent by check to the money mule who then deposits it in his or her own
bank account. Usually the mules keep a
fraction for “their trouble” and then wire the money as directed by the
fraudster. The fraudsters enlist and
manipulate the money mules through romance scams or “work-at-home” scams,
though some money mules are knowing co-conspirators who launder the ill-gotten
gains for profit.
BEC scams are related to, and often conducted together with,
other forms of fraud such as:
“Romance scams,”
where victims are lulled into believing they are in a legitimate relationship,
and are tricked into sending or laundering money under the guise of assisting
the paramour with an international business transaction, a U.S. visit, or some
other cover story;
“Employment
opportunities scams,” where victims are convinced to provide their PII to apply
for work-from-home jobs, and, once “hired” and “overpaid” by a bad check, to
wire the overpayment to the “employer’s” bank before the check bounces;
“Fraudulent online
vehicle sales scams,” where victims are convinced they are purchasing a
nonexistent vehicle and must pay for it by sending the codes of prepaid gift
cards in the amount of the agreed upon sale price to the “seller;”
“Rental scams,”
where a scammer agrees to rent a property, sends a bad check in excess of the
agreed upon deposit, and requests the overpayment be returned via wire before
the check bounces; and
“Lottery scams,”
where victims are convinced they won an international lottery but must pay fees
or taxes before receiving the payout.
Starting in May 2019, this coordinated enforcement action
targeted hundreds of BEC scammers. Law
enforcement agents executed over 214 domestic actions including arrests, money
mule warning letters, and asset seizures and repatriations totaling nearly $3.7
million. Local and state law enforcement
partners on FBI task forces across the country, with the assistance of multiple
District Attorney’s Offices, also arrested alleged money mules for their role
in defrauding victims.
Among those arrested on federal charges in BEC schemes
include:
Following an
investigation led by the FBI’s Chicago Division, Brittney Stokes, 27, of
Country Club Hills, Illinois, and Kenneth Ninalowo, 40, of Chicago, Illinois,
were charged in the Northern District of Illinois with laundering over $1.5
million from proceeds of BEC scams.
According to the indictment, a community college and an energy company
were defrauded into sending approximately $5 million to fraudulent bank
accounts controlled by the scammers.
Banks were able to freeze approximately $3.6 million of the $5 million
defrauded in the two schemes. Law
enforcement officials seized a 2019 Range Rover Velar S from Stokes and approximately
$175,909 from Stokes and Ninalowo.
As a result of a
joint investigation by the FBI, HSI, and DSS, Opeyemi Adeoso, 44, of Dallas,
Texas, and Benjamin Ifebajo, 45, of Richardson, Texas, were arrested and
charged in the Northern District of Texas with bank fraud, wire fraud, money
laundering, and conspiracy. Adeoso and
Ifebajo are alleged to have received and laundered at least $3.4 million. In furtherance of their scheme, they are
alleged to have assumed 12 fictitious identities and defrauded 37 victims from
across the United States.
As part of a
larger investigation by the FBI and the USSS in Miami, Yamel Guevara Tamayo,
36, of Miami, Florida, and Yumeydi Govantes, 39, of Miami, Florida, were
charged in the Southern District of Florida with laundering more than $950,000
of proceeds of BEC scams. The two
individuals were also responsible for recruiting approximately 18 other
individuals to serve as money mules, who laundered proceeds of BEC scams for an
international money laundering network.
The victims of the BEC scams included title companies, corporations, and
individuals. The individuals were
indicted June 18, 2019 and arrested June 20, 2019. The change of plea for both individuals is
scheduled for Sept. 16.
In an
investigation by FBI Atlanta, two individuals were charged in the Northern
District of Georgia for their involvement in a Nigeria-based BEC scheme that
began with a $3.5 million transfer of funds fraudulently misdirected from a
Georgia-based health care provider to accounts across the United States. Two Nigerian nationals, Emmanuel Igomu, 35,
of Atlanta, Georgia, and Jude Balogun, 29, of San Francisco, California, have
been arrested on charges of aiding and abetting wire fraud for their part in
receiving and transmitting monies derived from the BEC.
Following an
investigation by the FBI, Cyril Ashu, 34, of Austell, Georgia; Ifeanyi Eke, 32,
of Sandy Springs, Georgia; Joshua Ikejimba, 24, of Houston, Texas; and Chinedu
Ironuah, 32, of Houston, Texas, were charged in the Southern District of New
York with one count of conspiracy to commit wire fraud and one count of wire
fraud for their involvement in a Nigeria-based BEC scheme that impacted
hundreds of victims in the United States, with losses in excess of $10 million.
An indictment is merely an allegation and the defendants are
presumed innocent until proven guilty beyond a reasonable doubt in a court of
law.
The cases were investigated by the FBI, U.S. Secret Service,
U.S. Postal Inspection Service, ICE’s Homeland Security Investigations (HSI),
IRS Criminal Investigation and U.S. Department of State’s Diplomatic Security
Service. U.S. Attorney’s Offices in the
Districts of Arizona; Central, Eastern and Southern California; Colorado;
Delaware; Southern Florida; Northern Georgia; Northern Illinois; Kansas;
Eastern Louisiana; Massachusetts; Nebraska; Nevada; Southern New York; Middle
North Carolina; Northern Ohio; Oregon; Northern, Western and Southern Texas;
Western Tennessee; Eastern Virginia; Eastern Washington, and elsewhere have
ongoing investigations some of which have resulted in arrests in Nigeria. The Justice Department’s Computer Crime and
Intellectual Property Section, Money Laundering and Asset Recovery Section, and
Office of International Affairs of the Criminal Division provided
assistance. District Attorney’s Offices
of Harris County, Texas; Fort Bend County, Texas; and Washington County,
Arkansas are handling state prosecutions.
Additionally, private sector partners and the Nigerian Economic and
Financial Crimes Commission, Ghana Police Service (GPS) and Economic and
Organized Crime Office (EOCO), Turkish National Police (TNP) Cyber Department,
Direction Centrale de la Police aux Frontieres (PAF) of France, Squadra Mobile
Di Caserta and Italian National Police, National Police Agency of Japan, Tokyo
Metropolitan Police Department (TPMD), Royal Malaysian Police, Directorate of
Criminal Investigations (DCI) of Kenya and the National Crime Agency (NCA),
North Wales Police, Metropolitan Police Service and Hertfordshire Constabulary
of the UK provided significant assistance.
This operation serves as a model for international
cooperation against specific threats that endanger the financial well-being of
each member country’s residents. Deputy
Attorney General Rosen expressed gratitude for the outstanding efforts of the
participating countries, including law enforcement actions that were
coordinated and executed by the Economic and Financial Crimes Commission (EFCC)
in Nigeria to curb business email compromise schemes that defraud businesses
and individuals alike.
The Justice Department’s efforts to confront the growing
threat of cyber-enabled financial fraud led to the formation of the BEC
Counteraction Group (BCG), which assists U.S. Attorney’s Offices and the
Department with the coordination of BEC cases and the centralization of related
expertise. The BCG facilitates
communication and coordination between federal prosecutors, serves as a bridge
between federal prosecutors and federal agents, centralizes and manages
institutional knowledge and training, and participates in efforts to educate
the public about protecting themselves and their organizations from BEC scams.
The BCG draws upon the expertise of the following sections
within the Department’s Criminal Division: the Computer Crime and Intellectual
Property Section, which regularly investigates and prosecutes cases involving
computer crimes, including network intrusions; the Fraud Section, which manages
complex litigation involving sophisticated fraud schemes; the Money Laundering
and Asset Recovery Section, which brings experience in seizing assets obtained
through criminal activity; the Office of International Affairs, which plays a
central role in securing international evidence and extradition; and the
Organized Crime and Gang Section, which contributes strategic guidance in
prosecuting complex transnational criminal cases.
Operation reWired was funded and coordinated by the FBI and
the Justice Department’s International Organized Crime Intelligence and
Operations Center (IOC-2) and follows “Operation Wire Wire,” the first
coordinated enforcement action targeting hundreds of BEC scammers. That effort, announced in June 2018, resulted
in the arrest of 74 individuals, the seizure of nearly $2.4 million, and the
disruption and recovery of approximately $14 million in fraudulent wire transfers.
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