Fifteen Romanian nationals have pleaded guilty to a variety of charges tied to their participation in a multimillion-dollar online auction fraud scheme targeting Internet users in the US.
A Department of Justice (DoJ) statement announcing the pleas described the defendants as participating in a scam where they posted false advertisements, typically for vehicles and other high-priced goods, on popular sites such as eBay and Craigslist.
They would then convince victims interested in purchasing these nonexistent products to send money in advance using what the DoJ described as "persuasive narratives." For instance, the scammers would often impersonate military personnel seeking to sell the advertised item in a hurry before deployment.
The criminals went to considerable lengths to make their fake auctions appear as convincing as possible to potential victims. For instance, the online accounts they used to post their fictitious products and to communicate with potential victims were often established with stolen identities. The invoices they provided to victims usually bore the trademarks and logos of legitimate auction and seller sites, such as eBay Motors and Craigslist. The scammers would set up fake Facebook profiles for the individuals who had purportedly put items up for sale.
In addition, they even provided call-center services, where members of the group would pose as customer-service representatives for eBay and other companies to answer questions related to a potential sale or to assure potential victims of the authenticity of a sale.
Any money that the group managed to extract from victims would be converted into cryptocurrency and funneled out to foreign-based accounts in a complex money-laundering scheme, the DoJ said.
"Through the use of digital currencies and trans-border organizational strategies, this criminal syndicate believed they were beyond the reach of law enforcement,” said Assistant Director Michael D’Ambrosio, U.S. Secret Service, Office of Investigations, in the DoJ statement.
Alexandria Online Fraud Network
The 15 members who pleaded guilty are part of a 20-person cybercrime ring operating out of Bucharest that US law-enforcement has previously identified as the Alexandria Online Fraud Network.
Among those who pleaded guilty are Bogdan-Stefan Popescu, 30; Liviu-Sorin Nedelcu, 34; Vlad-Călin Nistor, 33; and Beniamin-Filip Ologeanu, 30, all of Romania.
Popescu, who operated a car wash in Bucharest, pleaded guilty to a conspiracy count for his role in receiving fraudulently obtained cryptocurrency from other members of the gang and getting it exchanged to fiat currency and depositing the currency into various bank accounts. He also helped other gang members with photographs and language to use in fake advertisements and with anonymizing their IP addresses. In addition, he helped arrange the call-center services that were often used in the auction scams.
Nedelcu was part of the team that posted the advertisements for fictitious products and established fictitious entities for selling nonexistent products. Nistor was the owner and founder of a Bitcoin exchange that helped gang members convert illegally obtained Bitcoin into fiat currency. He helped Popescu exchange some $1.8 million in Bitcoin into the local currency. Ologeanu's role was to convert payments made by victims into different forms of payment, such as prepaid debit cards and cryptocurrency. He also helped post advertisements on various sites for fictitious products.
The DoJ statement did not disclose when the 15 individuals who pleaded guilty were arrested. But the arrests were made after a federal grand jury in Kentucky returned indictments against members of the group in July 2018.
Twelve of the individuals were extradited to the US last year and are awaiting sentencing. Three remain at large and are fugitives from justice. Two other individuals connected to the defrauding scheme are scheduled to go on trial in September in US District Court for the Eastern District of Kentucky.