This Fraud Ring Used the Dark Web to Purchase Customers’ Personal Identifying Information, Accessed More Than 3,300 Customers’ Accounts, and Fraudulently Obtained More Than 1,200 Cellphones
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Angel M. Melendez, the Special Agent in Charge of the New York Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), announced charges today against 12 individuals involved in a nationwide fraud conspiracy from 2014 to the present: ISAAC CONCEPCION AQUINO, a/k/a “Kaka,” MARIO DIAZ, a/k/a “Memin,” TOMAS GUILLEN, a/k/a “Diddy,” RONNIE DE LEON, JOSE ARGELIS DIAZ, JOEL PENA, JHONATAN DIAZ, a/k/a “Nino,” EDDY MORROBEL, RUDDY SANCHEZ, MICHAEL ROQUE, RAYNIEL ROBLES, and JOANDRA TEJADA GONZALEZ. In connection with the fraud, the defendants and their associates improperly accessed more than 3,300 customers’ cellphone accounts, fraudulently obtained more than 1,200 cellphones, and caused losses exceeding $1 million. Six defendants were arrested in the Southern District of New York and will be presented today before Magistrate Judge Katharine H. Parker: MARIO DIAZ, a/k/a “Memin,” TOMAS GUILLEN, a/k/a “Diddy,” JOSE ARGELIS DIAZ, JHONATAN DIAZ, a/k/a “Nino,” EDDY MORROBEL, and RAYNIEL ROBLES. In addition, RONNIE DE LEON was arrested this morning in Ohio and will be presented this afternoon, in the Southern District of Ohio, before Chief Magistrate Judge Elizabeth A. Preston Deavers.
The following defendants remain un-apprehended at this time: ISAAC CONCEPCION AQUINO, a/k/a “Kaka,” JOEL PENA, RUDDY SANCHEZ, MICHAEL ROQUE, and JOANDRA TEJADA GONZALEZ.
U.S. Attorney Geoffrey S. Berman said: “The defendants allegedly engaged in a sophisticated nationwide conspiracy to hack into the accounts of ordinary people and exploit those accounts for their own gain, obtaining valuable electronic devices at others’ expense. The defendants allegedly perpetrated their scheme through various means, including buying victims’ account information over the dark web. Thanks to the dedicated work of our partners at HSI, this alleged ring of cellphone fraudsters will now face the call of justice.”
HSI Special Agent in Charge Melendez said: “Those arrested today were allegedly part of a fraud network operating in New York, the Dominican Republic and the Darknet. Their activities left a trail of unsuspecting victims across the United States and cost businesses significant losses. They traveled to 30 states to obtain cellphones that were later sold through fencing operations in the Bronx. Telecommunications fraud is a huge business and where there is a profit to be made by criminals, HSI’s longstanding El Dorado Task Force will follow the money to bring those perpetrators to justice.”
According to the allegations in the Complaint unsealed today:
From at least 2014 to the present, a group of individuals (the “Fraud Ring”) perpetrated a wide-ranging scheme to obtain valuable, new electronic devices – primarily iPhones, but also iPads, tablets, and watches – at others’ expense. During the course of the conspiracy, the Fraud Ring fraudulently obtained more than $1 million worth of devices. To facilitate the scheme, the Fraud Ring traveled to at least 30 different states, but often brought or shipped the fraudulently obtained cellphones back to the Bronx, where they regularly sold them.
The Fraud Ring regularly engaged in intrusions into existing customers’ accounts with cellular service companies and obtained new phones or “upgrade” phones by paying only a small fee in the store, while charging the vast majority of the purchase price to existing customers’ accounts, without the consent or knowledge of these existing customers. The scheme’s victims therefore included both customers, whose identities were stolen and/or whose accounts were accessed without authorization, and cellphone service providers, which typically bore financial losses for fraudulently obtained devices.
The Fraud Ring used various mechanisms to perpetrate their scheme, including buying cellphone customers’ personal identifying information (“PII”) over the dark web; phishing, in which the Fraud Ring sent a link to cellphone customers that, if pressed, allowed the Fraud Ring to hack into the customers’ accounts; using fraudulent identifications to persuade retail store employees that conspirators were someone else; and opening accounts using social security numbers that appeared to match conspirators’ names but in fact belonged to victims.
During the course of the investigation, HSI executed a search warrant on a suspected hub of the Fraud Ring in Mt. Vernon, New York (the “Residence”). Law enforcement encountered six of the 12 charged defendants in the Residence and seized (among other things) approximately 47 electronic devices, including 12 computers. Two IP addresses associated with the Residence were used to access at least approximately 3,300 cellphone company customer accounts, and to fraudulently purchase at least approximately 1,294 cellphones. The seized computers contained various indicators of involvement in the fraud, including:
· A 15-minute-long “How-to” video, which detailed the steps necessary to commit cellphone fraud, including how to use victim PII to fraudulently purchase devices;
· Many indicators that the computers had accessed the darkweb, several websites where victim PII is sold (sometimes for as little as $3), and cryptocurrency exchanges, including for Bitcoin; and
· Numerous Google searches in furtherance of the fraud (e.g., “best buy upgrade checker phone,” “att activate phone,” “verizon.com check order status,” “check my order status sprint,” “add authorized user last name,” “California driver license number format,” “Utah driver license photo,” and “most common last names for Spanish rich people”).
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Each of the 12 defendants is charged with one count of conspiracy to commit wire fraud, which carries a maximum penalty of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory minimum penalty of two years in prison, which must run consecutively to any other term of imprisonment imposed. The maximum and mandatory minimum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Michael D. Neff and Brett M. Kalikow are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.