Department of Justice
U.S. Attorney’s Office
Central District of California
Thursday, August 22, 2019
Massive International Fraud and Money Laundering Conspiracy Detailed in Federal Grand Jury Indictment that Charges 80 Defendants
LOS ANGELES – A 252-count federal grand jury indictment unsealed today charges 80 defendants, most of whom are Nigerian nationals, with participating in a massive conspiracy to steal millions of dollars through a variety of fraud schemes and launder the funds through a Los Angeles-based money laundering network.
The indictment was unsealed after law enforcement authorities this morning arrested 14 defendants across the United States, with 11 of those arrests taking place in the Los Angeles region. Two defendants were already in federal custody on other charges, and one was arrested earlier this week. The remaining defendants are believed to be abroad, with most them located in Nigeria.
The indictment alleges that the 80 defendants and others used various online fraud schemes – including business email compromise (BEC) frauds, romance scams, and schemes targeting the elderly – to defraud victims out of millions of dollars. According to a criminal complaint also unsealed today, co-conspirators based in Nigeria, the United States and other countries contacted the lead defendants in the indictment – Valentine Iro, 31, of Carson, and Chukwudi Christogunus Igbokwe, 38, of Gardena, both Nigerian citizens – for bank and money-service accounts that could receive funds fraudulently obtained from victims. Once members of the conspiracy convinced victims to send money under false pretenses, Iro and Igbokwe coordinated the receipt of funds and oversaw an extensive money-laundering network, according to the 145-page indictment.
The indictment and criminal complaint allege that Iro and Igbokwe, who were among those arrested this morning, were involved in schemes resulting in the fraudulent transfer of at least $6 million in fraudulently-obtained funds – and the overall conspiracy was responsible for the attempted theft of at least an additional $40 million.
The fraudsters targeted victims in the United States and across the globe, including individuals, small and large businesses, and law firms. Some of the victims of the conspiracy lost hundreds of thousands of dollars to fraud schemes, and many were elderly.
“This case is part of our ongoing efforts to protect Americans from fraudulent online schemes and to bring to justice those who prey upon American citizens and businesses,” said United States Attorney Nick Hanna. “Today, we have taken a major step to disrupt criminal networks that use BEC schemes, romance scams and other frauds to fleece victims. This indictment sends a message that we will identify perpetrators – no matter where they reside – and we will cut off the flow of ill-gotten gains.”
“Today’s announcement highlights the extensive efforts that organized criminal groups will engage in to perpetrate BEC schemes that target American citizens and their hard-earned assets,” said Assistant Director in Charge Paul Delacourt of the FBI’s Los Angeles Field Office. “Billions of dollars are lost annually, and we urge citizens to be aware of these sophisticated financial schemes to protect themselves or their businesses from becoming unsuspecting victims. The FBI is committed to working with our partner agencies worldwide to continue to identify these cyber criminals and to dismantle their networks.”
Iro and Igbokwe essentially were brokers of fraudulent bank accounts. According to the indictment, Iro and Igbokwe collected bank accounts, fielded requests for bank account information, provided that information to co-conspirators around the world, and laundered the money obtained from victims – all of this in exchange for a cut of the money stolen from victims of the various fraud schemes.
If a bank account with a specific business name was required to trick a business-victim into making a payment, Iro and Igbokwe often coordinated with “money mules” to open accounts that could receive funds obtained, according to court documents. In addition to making the fake business name mirror the name of a legitimate company, members of the conspiracy routinely filed fictitious business name statements with the Los Angeles County Registrar/Recorder’s Office that were presented to banks when the fraudulent accounts were opened.
Once a victim deposited funds into a bank account or a money services account, Iro and Igbokwe allegedly coordinated with others to further launder the funds. Members of the conspiracy sometimes wired funds to other bank accounts under their control; in other cases, they simply withdrew funds as cash or negotiable instruments such as cashier’s checks.
When stolen funds were withdrawn as cash, the defendants frequently used illicit money exchangers to move funds overseas, generally avoiding transferring the funds directly through banking institutions, the indictment alleges. To do this, Iro and Igbokwe coordinated the transfer of a victim’s funds from a fraudulent bank account they controlled to U.S. bank accounts belonging to illicit money exchangers. Those money exchangers, in turn, used a Nigerian banking application to transfer other funds in naira (₦), the currency of Nigeria, from Nigerian bank accounts they controlled to the Nigerian bank accounts specified by Iro and Igbokwe. This method was used to transfer millions of dollars to Nigerian co-conspirators without directly transferring funds overseas. The indictment alleges that Jerry Ikogho, 50, of Carson (who was taken into custody on Sunday), and Adegoke Moses Ogungbe, 34, of Fontana, were among those who served as illicit money exchangers for the conspiracy.
Each of the 80 defendants named in the indictment is charged with conspiracy to commit fraud, conspiracy to launder money, and aggravated identity theft. A number of the defendants also face substantive fraud and money laundering charges.
Additionally, Iro, Igbokwe, Ikogho, Ogungbe and three other defendants –Izuchukwu Kingsley Umejesi, 30, of Los Angeles, Tityaye Marina Mansbangura, 33, of Palmdale, and Obi Madekwe, 31, of Nigeria – are charged with operating illegal money transmitting businesses. Ogungbe and Mansbangura were also among those arrested this morning, and Umejesi is a fugitive currently being sought by authorities.
Iro, Igbokwe and Chuks Eroha, 39, face additional charges for attempting to destroy their phones when the FBI executed a search warrant in July 2017. Iro also is charged with lying to the FBI in an interview conducted during the search. The complaint alleges that, when the FBI arrived to conduct the court-authorized search at Iro’s apartment in Carson, Iro broke his phone in half, while Igbokwe and Eroha threw phones from a bedroom window of the apartment. While Iro claimed he previously had broken the phone during an argument with his wife, the complaint details how the FBI was able to determine that the phone was operational until seconds after the FBI knocked on Iro’s apartment door to execute the search warrant. Eroha is believed to have fled to Nigeria shortly after the FBI executed the warrant.
The charges contained in the criminal complaint and indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty in court.
This investigation is being led by the Federal Bureau of Investigation.
The Los Angeles County District Attorney’s Office, the Los Angeles County Sheriff’s Department, and the United States Department of State provided substantial assistance during the investigation.
Several agencies provided support during today’s takedown or during the investigation, including the United States Postal Inspection Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Citizenship and Immigration Services, U.S. Customs and Border Protection, the Ventura County District Attorney’s Office and the California Franchise Tax Board.
Many of the FBI’s Legal Attachés provided assistance throughout this investigation, as did the Criminal Division’s Office of International Affairs, and foreign authorities around the world. In particular, the FBI and U.S. Attorney’s Office thank the National Crime Agency in the United Kingdom and the Public Prosecutor’s Office of Osnabrück, Germany for their contributions.
This case is being prosecuted by Assistant United States Attorneys Anil J. Antony and Joseph B. Woodring of the Cyber and Intellectual Property Crimes Section.
An American online publisher focusing on the tech industry, TechCrunch, has revealed that a whopping five million emails were sent within 10 days by a group of 80 Internet scammers who were rounded up in an earth-shaking clampdown on fraudsters in the United States on Thursday.
Out of the 80 individuals involved, 78 of them are Nigerians residing variously in the United States and Nigeria.
A spokesperson for the U.S. Attorneys Office for the Central District of California, Thom Mrozek, confirmed that the indicted persons were arrested during raids on Thursday — mostly in the Los Angeles area.
“A total of 80 defendants are allegedly involved in the scheme,” the medium said of the early morning raids.
The 145-page indictment, unsealed Thursday, said the 80 named individuals are charged with conspiracy to commit “mail and bank fraud, as well as aggravated identity theft and money laundering.”
Most of the individuals alleged to be involved in the scheme are based in Nigeria, Mrozek said.
TechCrunch reported that, for 10 days in March, millions of unsuspecting people were caught in these scammers’ massive spam campaigns.
“Each email looked like it came from someone the recipient knew: the spammer took stolen email addresses and passwords, quietly logged into their email account, scraped their recently sent emails and pushed out personalized emails to the recipient of that sent email with a link to a fake site, pushing a weight loss pill or a bitcoin scam,” the online publishing outfit reported.
“The emails were so convincing more than 100,000 people clicked through,” it said, providing the details of how it employed tech security researchers to track the online activities of the fraudsters.
“We know this because a security researcher found the server leaking the entire operation. The spammer had forgotten to set a password,” it wrote.
It noted that, as of the time it accessed one of the scammers’ servers’, the rig was no longer running, probably in an effort to avoid getting blacklisted by anti-spam providers. “But the server was primed to start spamming again,” TechCrunch said.
It revealed that there were “more than three million unique exposed credentials sitting on the spammer’s server.”
The server was hosted on intelimost.com, with no contact information for the spammer, TechCrunch said; and contacted the hosting provider, Awknet, urging it to pull the scammers’ server offline. Awknet obliged.
“We found a massive spam operation and sunk its servers,” TechCrunch said.
The Federal Bureau of Investigation indictment sheet obtained by The PUNCH is revealing.
The 145-page FBI charge sheet contains the names of the defendants in the multi-billion-dollar fraud case, the names of their indicted co-conspirators, and those of the un-indicted co-conspirators.
Listing the objects of the conspiracy, the charge sheet states that, “Beginning on a date unknown to the Grand Jury, but no later than October 7, 2014, and continuing through an unknown date, but no earlier than on or about May 2, 2018, in Los Angeles County, within the Central District of California, and elsewhere, the defendants and others known and unknown to the Grand Jury, knowingly conspired:
“a. to conduct and attempt to conduct, financial transactions, affecting interstate and foreign commerce, knowing that the property involved in the financial transactions represented the proceeds of some form of unlawful activity, which, in fact, involved the proceeds of specified unlawful activity — namely, wire fraud, in violation of Title 18, United States Code, Section 1343; mail fraud, in violation of Title 18, United States Code, Section 1341; and bank fraud, in violation of Title 18, United States Code, Section 1344(2) — and knowing that the transactions were designed in whole and in part to conceal and disguise the nature, location, source, ownership, and control of the proceeds, in violation of Title 18, United States Code, Section 1956(a)(1)(B)(i);
“b. to transport, transmit, and transfer, and attempt to transport, transmit, and transfer, funds from a place in the United States to a place outside of the United States, knowing that the property involved in the financial transactions represented the proceeds of some form of unlawful activity, and which property was, in fact, the proceeds of specified unlawful activity — namely, wire fraud, in violation of Title 18, United States Code, Section 1343; mail fraud, in violation of Title 18, United States Code, Section 1341; and bank fraud, in violation of Title 18, United States Code, Section 1344(2) — and knowing that the transactions were designed in whole and in part to conceal and disguise the nature, location, source, ownership, and control of the proceeds, in violation of Title 18, United States Code, Section 1956(a)(2)(B)(i); and
“c. to engage and attempt to engage in monetary transactions involving criminally derived property of a value greater than $10,000, affecting interstate and foreign commerce, which was derived from specified unlawful activity — namely, wire fraud, in violation of Title 18, United States Code, Section 1343; mail fraud, in violation of Title 18, United States Code, Section 1341; and bank fraud, in violation of Title 18, United States Code, Section 1344(2) and knowing that the funds represented the proceeds of some form of unlawful activity, in violation of Title 18, United States Code, Section 1957.”
The suspects face 252 counts bordering on fraud, intent to commit fraud, impersonation and related crimes, according to the introductory allegation charge sheet.
The Prosecutor added that the United States of America will seek “forfeiture as part of any sentence, pursuant to Title 18, United States Code, Sections 982 and 1028 and Title 28, United States Code, Section 2461(c) in the event of any defendant’s conviction of the offenses set forth in any of Counts One Hundred Seventy-One through Two Hundred Fifty-Two of this Indictment.
“Any defendant so convicted shall forfeit to the United States of America the following:
“(a) All right, title and interest in any and all property, real or personal, constituting, or derived from, any proceeds obtained, directly or indirectly, as a result of the offense;
” (b) Any personal property used or intended to be used to commit the offense; and
“(c) To the extent such property is not available for forfeiture, a sum of money equal to the total value of the property described in subparagraphs (a) and (b).
“Pursuant to Title 21, United States Code, Section 853(p), as incorporated by Title 18, United States Code, Sections 982(b) and 1028(g), any defendant so convicted shall forfeit substitute property, up to the total value of the property described in the preceding paragraph if, as the result of any act or omission of said defendant, the property described in the preceding paragraph, or any portion thereof: (a) cannot be located upon the exercise of due diligence; (b) has been transferred, sold to or deposited with a third party.”
EFCC to help FBI fish out Nigerians indicted in $46m fraud in US - Magu
EFCC boss, Ibrahim Magu, said the commission will work with the FBI to investigate Nigerians indicted in a $46 million fraud case in the US - Magu said the home based-Nigerians who collaborated with the ones in the US will be made to face the full wrath of the law - The EFCC chief, however, said the FBI has not reached out to the commission over the fraud case The acting chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, says the commission will collaborate with the Federal Bureau of Investigation (FBI) to the Nigerians indicted in a $46 million fraud case in the United States. The fraudsters, majority based in Nigeria, were, according to FBI, involved in a series of coordinated internet scam obtained from victims in the United States and other parts of the world. The American security agency on Thursday, August 22 said 14 of the suspects had been arrested while the remaining defendants were “believed to be abroad with most of them located in Nigeria.” Afe Babalola makes stunning revelation, says DSS not empowered by law to arrest Following the release of the names of all the Nigerians indicted in the fraud case, ThisDay newspaper, citing anonymous sources on Friday, August 23, said the EFCC boss met with a select team at the headquarters in Abuja, to strategise on how to arrest the Nigeria-based members of the fraud syndicate. Meanwhile, speaking at the EFCC headquarters in Abuja also on Friday, Magu reportedly confirmed that the agency had commenced investigation into the matter. He said the commission was investigating to ascertain the involvement of Nigerians who collaborated with the ones indicted in the US. “We will investigate it and we will leave no stone unturned. We will go after those who collaborated with the ones in the US and they will be made to face the full wrath of the law,” Magu was quoted to have said. The EFCC boss noted that the commission was collaborating with the FBI in two operations notably Operation “Wire-wire” which commenced in 2018 and Operation “Rewire” presently ongoing, both aimed at containing cybercrime. He said the joint operation involved Malaysia, Canada, Indonesia and the United States.