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U.S. Charges 80 in Massive Online Fraud Scheme

The United States Department of Justice this week unsealed an indictment that charges 80 defendants, most of them Nigerians, for their roles in a massive fraud and money laundering scheme. 

The United States Department of Justice this week unsealed an indictment that charges 80 defendants, most of them Nigerians, for their roles in a massive fraud and money laundering scheme. 

The unsealing follows the arrest of 14 defendants across the United States in the same case. Two defendants were already in custody on other charges and one was arrested earlier this week. The individuals are believed to be abroad, most of them in Nigeria.

According to the indictment, the 80 individuals participated in online fraud schemes such as business email compromise (BEC), romance scams, and schemes targeting the elderly, aimed at defrauding victims out of millions of dollars. 

A criminal complaint that the US DoJ also unsealed alleges that lead defendants provided co-conspirators based in Nigeria, the United States and other countries with bank and money-service accounts to receive fraudulent funds from victims. 

The lead defendants in the indictment are two Nigerian citizens, Valentine Iro, 31, of Carson, and Chukwudi Christogunus Igbokwe, 38, of Gardena, both of them arrested this week. 

The two coordinated the receipt of funds and supervised an extensive money-laundering network. The schemes Iro and Igbokwe were involved in resulted in the fraudulent transfer of at least $6 million. Overall, the conspiracy also attempted to steal an additional $40 million.

The defendants targeted individuals, small and large businesses, and law firms in the United States and around the world. Some of the victims lost hundreds of thousands of dollars, and many were elderly.

Iro and Igbokwe acted as brokers of fraudulent bank accounts. They collected bank accounts, fielded requests for bank account information and delivered the information to co-conspirators, and also laundered the money obtained from victims. The two received a cut of the money stolen from victims. 

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The indictment also alleges that Iro and Igbokwe often coordinated with “money mules” to open accounts to receive funds obtained from business-victims. 

Members of the scheme created fake business names mirroring those of legitimate companies and routinely filed fictitious business name statements with the Los Angeles County Registrar/Recorder’s Office, to present those to banks when opening fraudulent accounts.

As soon as a victim deposited funds into a bank account or a money services account, Iro and Igbokwe coordinated the laundering of the funds. Money was sometimes wired to other bank accounts or simply withdrawn as cash or negotiable instruments such as cashier’s checks.

Illicit money exchangers were frequently used to move funds overseas, usually avoiding making transfers directly through banking institutions. Funds were transferred from fraudulent bank accounts to U.S. bank accounts of illicit money exchangers, who in turn transferred other funds from Nigerian bank accounts to the Nigerian bank accounts specified by Iro and Igbokwe. 

Using this method, the defendants allegedly transferred millions of dollars to Nigerian co-conspirators while avoiding to directly transfer funds overseas. 

According to the indictment, Jerry Ikogho, 50, of Carson (arrested on Sunday), and Adegoke Moses Ogungbe, 34, of Fontana, were among the individuals serving as illicit money exchangers for the conspiracy.

The 80 are charged with conspiracy to commit fraud, conspiracy to launder money, and aggravated identity theft. Some of the defendants also face fraud and money laundering charges.

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 also charged with operating illegal money transmitting businesses. Umejesi is the only one who remains a fugitive.

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. 

Related: 20 Indicted in Multimillion-Dollar Online Fraud Scheme

Related: Russian Charged With Stealing $1.5 Million From IRS

Written By

Ionut Arghire is an international correspondent for SecurityWeek.

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