Federal authorities have cracked what they say is one of the biggest email fraud cases in history — the offspring of the Nigerian Prince scams pursued by direct mail 30 years ago, but of a complexity that could not be imagined back then.
A 252-count indictment listing 80 defendants, most of them Nigerian nationals, was announced on Thursday by the U.S. Attorney’s office for the Central District of California.
The defendants -- including 14 who are located in the U.S., with 11 in the L.A. area -- were charged with conspiracy to commit fraud, conspiracy to launder money and aggravated identity theft. In addition, several were hit with fraud and money-laundering charges.
The lead defendants are Valentine Iro, of Carson, California, and Chukwudi Christogunus Igbokwe, of Gardena. Iro and Igbokwe, both of whom are Nigerian citizens, processed the payments and laundered the money in return for a cut off the top, the indictment alleges.
That money was funneled through major banks, but those institutions were “not complicit,” says Thom Mrozek, spokesperson for the U.S. Attorney’s Office.
“In fact, the banks have been extremely helpful to the investigation and to victims – in some cases, acting quickly to freeze accounts to stop potential losses to victims,” Mrozek adds.
Will there be charges against ISPs, ESPs, list suppliers and others who might have wittingly or unwittingly contributed?
“That is not my understanding,” Mrozek answers, “We will continue to investigate this network of con men and their facilitators.”
From one email list provider, the defendants purchased “a list of email addresses of real estate agents in New York State for use in sending emails intended to disseminate malicious software in furtherance of fraudulent schemes,” the indictment states.
The total amount of the swindle does not seem huge — $6 million was fraudulently transferred, and the total attempted theft was around $40 million. But the case is drawing national media attention.
The case largely centers on Business Email Compromise (BED), showing that international fraud artists have moved beyond bilking only the elderly and vulnerable.
In one instance, they inducted a San Diego company to transfer $45,783.97 from its City National Bank Account to a fraudulent HSBC account.
Other firms apparently paid sums as large as $900,000 after being fraudulently invoiced.
Typically, the defendants would identify prospects by hacking into their email systems, the indictment states.
The defendants also targeted a law firm, which sent a $83,140.98 wire transfer to the scammers. However, the alleged felons thought better of it.
Iro and a colleague expressed concern that the money “was from a U.S. law firm and discussed requesting that Chase return the funds in order to avoid further scrutiny for the transaction,” the indictment states.
Not that the elderly and vulnerable were forgotten.
The scam artists also targeted “persons looking for romantic partners or friendship on dating websites and other social media platforms,” the indictment continues.
To lure these victims, the thieves would create profiles using fictitious names, locations, images, and personas, allowing them to “cultivate relationships with prospective romance scam victims,” the indictment says.
One such victim identified as D.J. purchased a $25,000 money order from the United Southwest Bank in Minnesota and deposited into a Wells Fargo account set up by the network, the indictment states.
Mrozek notes that “the various frauds perpetrated in this case – BEC schemes, romance scam, etc. – are essentially update, more sophisticated versions of the ‘Nigerian prince’ scam
Several defendants were arrested, but others are fugitives.
Iro, Igbokwe and Chuks Eroha face added charges for trying to destroy their phones when the FBI executed a search warrant.
“Today, we have taken a major step to disrupt criminal networks that use BEC schemes, romance scams and other frauds to fleece victims,” states United States Attorney Nick Hanna. “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.”
The investigation is being led by the FBI, with help from the L.A. Country DA and Sheriff’s department, the U.S. department of State and the U.S. Postal Inspection Service.
Also credited are the U.S. Immigration and Customs Enforcement’s Homeland Security unit; the U.S. Citizenship and Immigration Service; U.S. Customs and Border Protection, the Ventura County District Attorney’s Office and the California Franchise Tax Board.