An online syndicate of mostly Nigerian nationals facing fraud and money laundering charges defrauded no fewer than 18 corporate organisations and 14 individuals across the world of several millions of dollars, an unsealed indictment released by the United States Department of Justice (DoJ) has shown.
Some of the companies defrauded were based in Nigeria, India, South Korea, China, and the United States.
The 80-member syndicate was so adept at scamming corporate entities and individuals of money that some of their victims were defrauded multiples times within hours and in some cases, several members of the syndicate defrauded the same victim within a number of days.
The syndicate also used a web of bank accounts in the United States, Nigeria and the Caribbean to launder the funds it stole from its victims.
On Thursday, the DoJ unsealed a federal grand jury indictment of 77 Nigerians and three others who appeared to have been part of a fraudulent syndicate that specialises in defrauding American businesses and individuals.
According to a copy of the 252-count indictment, the syndicate primarily defrauds its victims via the use of business email compromise (BEC), escrow fraud, and romance scams.
According to the DoJ, BEC involves the unauthorised access to a business email account, with the aim of blocking or redirecting communications to and from the email account.
This is with the aim of using the compromised email account or a related fraudulent email account to communicate with personnel from a victim’s company, tricking them into making an unauthorised wire transfer.
Escrow fraud, which is similar to BEC, is when a hacker gains unauthorised access into an email account of an escrow company or real estate agent and then communicating with an unsuspecting client who is seeking to buy a property to make down-payment for a property into a fraudulent bank account.
Romance scams target persons looking for romantic partners or friendships on dating sites or social media platforms.
The scammers create fake profiles using fictitious names, locations, images to cultivate a relationship with a prospective victim who is later convinced to send money, and other gifts to the scammer or asked to conduct a transaction on behalf of the scammer.
The unsealed indictment described how the fraud ring defrauded unsuspecting individuals and businesses through a network of complicated individuals, fictitious businesses and banks in the U.S. and Nigeria.
Elaborate scamming strategies
The report revealed that the syndicates make use of Valentine Iro, Chukwudi Igbokwe, and Chuks Eroha, three U.S.-based Nigerian point men.
On the request of other members of the syndicate, the trio “would select a bank account or money service account that had previously been opened in order to receive fraudulently-obtained funds, which could receive the fraudulently-obtained funds.”
Other members of the syndicate will then provide “the account information for a bank account or money service account, which could receive the fraudulently-obtained funds”. Or they could open a bank account or money services account that could receive fraudulently-obtained funds.
The bank accounts are then opened under the name of a fake company registered by Messrs Iro, Igbokwe, Eroha and others through the Los Angeles County Registrar-recorder clerk’s office.
The men will then send other members of the syndicate the information of the false bank accounts that will be used to receive the fraudulently-obtained funds.
The point men usually reach an agreement with other members of the ring on the percentage they and other members of the ring will get for handling and laundering the fraudulently obtained money.
The syndicate usually uses false pretence, representations, and promises, and concealment of facts to persuade a victim to deposit wire, or transfer funds into the bank accounts or money service accounts opened by Messrs Iro, Igbokwe, and Eroha.
When the money is paid into the account, Messrs Iro, Igbokwe and Eroha would usually withdraw the money through cash withdrawals, wire transfers, teller transfers, checks, and deposit some into further accounts used and controlled by them and other co-conspirators before the victims of the crime became aware of the fraudulent nature of the transactions.
When a bank questions the sources of the funds and transactions, the trio and their co-conspirators would lie and provide false information about the ownership and source of the fund.
The funds are then deposited into the bank accounts of fraudulent or unregistered money exchangers, who will then transfer other funds from their Nigerian bank accounts to other Nigerian bank accounts of other members of the syndicate.
Sometimes the trio will direct others to transfer some of the funds from Nigerian bank accounts that they controlled to the Nigeria bank accounts of their co-conspirators.
How funds were received and disbursed
The unsealed indictment also included details of how the syndicate received funds from victims and disbursed them to other members of the victims.
The details showed that a large chunk of the fraudulently-obtained funds was purportedly used to purchase cars.
Around September 3, 2015, Mr Iro sent the account details, including the account number and routing number of a Chase Bank checking account to one of the defendants, Paschal Ogbonna, who was doing business as VOI Enterprises in Carson California with the instruction to have a victim identified as M.S.
At about the same time, an unidentified co-conspirator fraudulently induced M.S to send a wire transfer of $23,000 from her BOA account to Iro’s Chase’s account.
The next day Mr Iro withdrew $14,000 from his Chase account and wrote on the withdrawal slip: “for Lexus RX330 and RX300”. He also sent a cheque of $1,500 from his chase account which he identified as “2002 Nissan Optima”.
Not done with M.S, four days later, another member of the syndicate tricked the victim to send a wire transfer of approximately $46,500 from her BOA account to Mr Iro Chase’s account.
On the same day, Mr Iro withdrew $8,000 from his account which he identified on the withdrawal slip as “Mercedes 2011 and Lexus 350 2008.
Two days later he withdrew $3,000 from his account and wrote “for Acura MDX2007” on the slip. He also withdrew $9,000 on the same day from the account.
On the same day, another unidentified co-conspirator convinced M.S to send $4,700 from her account. Keeping to pattern, Mr Iro withdrew $7,700 from his account vis cheque and wrote “Camry 207 and Camry 05 on the Memo”.
On September 14, M.S also sent $17,000 to the syndicate through Mr Iro’s Chase account. Mr Iro withdrew a total of $35,000 in three transactions on the same day.
Web of bank transfers
In one instance, the syndicate defrauded a company, identified as Victim Company 2, of $186,686 which was sent from the company’s United Bank for Africa account to Mr Iro’s Chase bank 9837 account in February 2016.
On receiving the money, Mr Iro proceeded to transfer the money, in bits, into a network of bank accounts in at least four banks and money service accounts within 10 days.