Business Crime: convictions in international phishing scam

In late 2009, the USA's FBI and authorities in Egypt began charging defendants resulting from Operation Phish Phry.

Investigators found that computer users (the FBI calls them "hackers but actually this appears to be a mistaken description) based in Egypt obtained bank account numbers and related personal identification information from an unknown number of bank customers by sending out large numbers of e-mails designed to solicit personal information and bank login information from bank customers. Even now the FBI knows that there were a "large" but as yet ascertained number of victims.

The e-mails directed victims to fake reproductions of bank websites which had all the appearances of genuine sites but which were created for the sole purpose of tricking victims into completing an on-line form with all details necessary to access their on-line bank accounts.

Once they accessed the accounts, the individuals operating in Egypt communicated via text messages, telephone calls, and Internet chats with conspirators in the United States. Through these communications, members of the criminal ring co-ordinated the illicit online transfer of funds from the compromised accounts to newly created fraudulent accounts.

The United States part of the ring was directed by three people, including Nichole Michelle Merzi, one of the defendants who was convicted yesterday. The leaders of the USA part of the scheme directed associates to recruit runners to set up bank accounts where the funds stolen from the compromised accounts could be transferred and withdrawn. A portion of the illegally obtained funds withdrawn were then transferred via wire services to the Egyptian conspirators who had originally provided the bank account information obtained through phishing.

Five defendants were found guilty in a Federal court in Los Angeles yesterday and will be sentenced on 31 October. One defendant was found not guilty, a further defendant has pleaded guilty and one defendant is a fugitive. Charges against two others were withdrawn and two further defendants are awaiting trial.

Due Diligence Information

Convicted 28 March 2010

Nichole Michelle Merzi, 25, of Oceanside, who was found guilty of conspiracy, computer fraud, bank fraud, and aggravated identity theft;

Tramond S. Davis, 21, of Las Vegas, Nevada, who was found guilty of conspiracy;

Shontovia D. Debose, 22, of Las Vegas, Nevada, who was found guilty of conspiracy;

Anthony Donnel Fuller, 22, of Corona, who was found guilty of conspiracy and two counts of bank fraud; and

Me Arlene Settle, 22, of Garden Grover, who was found guilty of conspiracy and two counts of bank fraud.

Previously convicted:

Kenneth Joseph Lucas, 26, of Los Angeles - pleaded guilty to conspiracy, bank fraud and aggravated identity theft, and

Jonathan Preston Clark, 26, of Los Angeles - pleaded guilty to conspiracy and bank fraud.