Thousands defrauded out of nearly US$215M, including Canadians, in global hacking scheme

A photograph of a spam folder in an email service.

A United States federal jury has convicted 25 people for running an international hacking scheme that defrauded more than 1,000 victims out of nearly US$215 million from dozens of U.S. states and 19 countries, including Canada.

According to a news release published on Thursday by the U.S. Attorney’s Office from the Northern District of Ohio, evidence and court documents highlighted that individuals, businesses, and organizations from the U.S. were targeted and hacked by fraud groups with connections to Nigeria in what is sometimes referred to as “business email compromise.”

Their primary goal was to gain access to individuals’ email accounts, before their counterparts could begin digging through their business practices and contacts by monitoring their activities.

“After gaining sufficient intelligence about the nature of a hacking victim’s activities, the co-conspirators would send a fraudulent email to either the hacking victim, or to someone communicating with the hacking victim, requesting payment,” the authorities said.

This information was the used to craft fraudulent emails in which the victims were convinced to make the payments under the guise of being a legitimate business transaction. Once the payment had been wired, the suspects would use a “web” of fake bank accounts and cash transfer systems to launder and distribute to stolen funds.

Nearly $50 million from the stolen money was used to buy cashier’s checks, presented for payment to a Chicago-area money service business owned and operated by co-defendant Lon Goodman, called the New Dolton Currency Exchange.

Goodman allegedly “routinely” accepted these payments with false information and continued to work with these individuals, despite multiple warnings from banks about the checks being obtained through fraudulent means.

“When it became too risky to accept cashier’s checks in an individual’s name, Goodman would nonetheless accept checks from those individuals payable to shell companies that those individuals controlled,” the news release stated.

Wire transfers sent by victims ranged from tens of thousands to millions of dollars. One business was allegedly defrauded out of $2.7 million via a shell company bank account that was controlled by a conspiracy member.

Investigators found nearly $1.2 million worth of cashier’s checks, cryptocurrency and cash during the investigation.

In addition to that, they also found a Patek Philippe Nautilus watch valued at $45,000, an Audemars Piguet Royal Oak watch valued at $30,000, a Richard Mille Felipe Massa watch valued at $140,000 and a 4,423 square-foot residence in Lawrenceville, Georgia.

Out of the 25 defendants, Oluwafemi Michael Awoyemi, 40, of Romeoville, Ill., Aruan Drake, 37, of Atlanta, and Peter Reed, 35, of Oak Forest, Ill., were convicted for wire fraud conspiracy.

Awoyemi and Drake were also convicted of a money laundering conspiracy.

Twenty-two more people pleaded guilty to wire fraud and money laundering conspiracy, following the conviction of the Awoyemi, Drake and Reed.