Tech Company and CEO Plead Guilty to Twenty Charges of Wire Fraud Mid-Trial | USAO-SC


Charleston, South Carolina — Acting U.S. Attorney Rhett DeHart today announced that Micfo, LLC, a Charleston-based tech company, and its CEO, Amir Golestan, 38, of Charleston, have both pleaded guilty to twenty counts. wire fraud charge. Specifically, the two defendants pleaded midway through a federal trial after evidence presented in the case showed Golestan, acting through Micfo, created fictitious people and businesses to sell Internet address rights fraudulently obtained for millions of dollars.

“Corporate and executive malfeasance can be difficult to detect and even more difficult to prosecute, and this case is a prime example of the success we can achieve despite this difficulty when working with our federal and agency partners,” he said. said Acting US Attorney DeHart. . “This office greatly appreciates the hard work of the Federal Bureau of Investigation (FBI) and the American Registry for Internet Numbers (ARIN) on this matter. I would especially like to acknowledge the efforts of ARIN’s Client Manager John Sweeting, General Counsel Michael Abejuela and their outside counsel, Steve Ryan and Sam Neel of McDermott Will & Emery LLP.

“Bad guys often avoid accountability by masking their criminal conduct through complicated business procedures or by operating in areas unknown to most people,” said criminal chief Nathan Williams, who sued the case alongside Assistant US Attorney Amy Bower. “The world of Internet resources is one of those areas. However, this case shows that the FBI and the US Attorney’s Office, along with other partner agencies, are capable of detecting complex crimes and prosecuting corporate and executive criminals. “

“As many corporate fraud criminals often do, Golestan made the mistake of assuming that his scheme would go undetected,” said Susan Ferensic, special agent in charge of the FBI field office at Columbia. “Make no mistake, the FBI and our local, state and federal partners will work tirelessly to uncover and prosecute the criminals who harm our Internet infrastructure. “

“ARIN is grateful for the hard work of the US Attorney’s Office in South Carolina and the FBI in holding Mr. Golestan and Micfo accountable for the complex fraud perpetrated against ARIN,” said John Curran, President and CEO of ARIN . “Sir. The Golestan scheme has harmed ARIN and our Internet Registry customer community, and we hope this result will send a clear message to any other party considering fraudulent schemes to obtain or transfer Internet resources.

Evidence presented during the trial showed that Golestan launched Micfo in Charleston in 1999. The company presented itself as providing web hosting and other Internet services. From February 2014 until the federal indictment in this case in May 2019, Golestan, as CEO of Micfo, created ten separate and fictitious companies which he called “Channel Partners”. The goal of these channel partners was to obtain addressing rights to ARIN Internet Protocol (IP) version 4 (IPv4) addresses.

IPv4 addresses are digital labels assigned to every device connected to a computer network that uses the Internet for communication. ARIN is a non-profit organization that administers IP address rights, allocations, and transfers in the United States, Canada, and parts of the Caribbean. To obtain an IP address allocation from ARIN, in accordance with its policies, an entity must provide a needs-based justification. With ARIN’s pool of IPv4 addresses depleted, demand increased, resulting in an aftermarket where the prices of a single IPv4 address increased dramatically.

Golestan created the fictitious Channel Partners, which sometimes included the creation of fictitious web pages and employees, to make businesses appear legitimate and meet ARIN’s justification policies for assigning IPv4 addresses based on needs. Golestan, using the bogus companies, obtained the rights from ARIN to hundreds of thousands of IPv4 addresses worth tens of millions of dollars. After Golestan fraudulently obtained the rights to the IPv4 address, he began selling those rights for millions of dollars.

As a result of its fraudulent scheme, Golestan pocketed around $ 3.5 million, with an additional $ 6.2 million pending deposit that would have gone to Golestan had it not been taken. Although Golestan and his company went to trial first, after two days and the testimony of eight government witnesses, Micfo and Golestan pleaded guilty to twenty counts of wire fraud without a plea agreement.

Golestan faces a maximum sentence for each count of 20 years in federal prison, a fine of $ 250,000, 3 years of supervision to follow the jail term and restitution. Micfo, the company, faces a fine of up to $ 500,000 on each count. United States District Judge Richard M. Gergel has accepted the guilty pleas and will sentence Golestan after receiving and reviewing a conviction report prepared by the United States Probation Office.

The matter was investigated by the FBI. Assistant U.S. Attorneys Nathan Williams and Amy Bower are pursuing the case.

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