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US, European law enforcement take down $3M high-end online fraud scheme

Romanian nationals arrested for porting false ads on websites including eBay, Cars.com, AutoTrader.com and CycleTrader.com

By Layer 8 on Wed, 12/05/12 - 5:17pm.

The US Department of Justice, working with a team of international law enforcement officials today said it took out an online fraud scheme that sold some $3 million worth of all manner of high-end items such as cars, motorcycles and boats on  eBay, Cars.com, AutoTrader.com and CycleTrader.com.

Trouble was, none of the high-end items really existed. 

According to the DoJ, the defendants allegedly employed co-conspirators who corresponded with victim buyers by email, sending fraudulent certificates of title and other information designed to lure the victims into parting with their money.  Sometimes, the defendants allegedly pretended to sell cars from nonexistent auto dealerships in the United States and even created phony websites for these fictitious dealerships.

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According to the complaint, after the "sellers" reached an agreement with the victim buyers, they would often email them invoices purporting to be from Amazon Payments, PayPal or other online payment services, with wire transfer instructions, the DoJ stated.   

However, the defendants and their co-conspirators allegedly used counterfeit service marks in designing the invoices so that they would appear identical to communications from legitimate payment services.  The fraudulent invoices directed the buyers to send money to the American bank accounts that had been opened by what the DoJ said were foreign national co-conspirators known as "arrows."  Finally, the arrows would allegedly collect the illicit proceeds and send them to the defendants in Europe by wire transfer and other methods.  For example, the arrows allegedly forwarded one of the defendants  $18,000 cash in fraud proceeds hidden inside hollowed-out audio speakers.  Other arrows allegedly used the proceeds to purchase Audemars Piguet watches, and then sent the watches to the defendants abroad.

The DoJ said in at least one transaction, one of the defendants or "seller" allegedly pretended to be the widow of an Iraq war veteran who was selling her family's mobile home so that she could care for her children.  In other transactions, the defendants allegedly duped victims into sending tens of thousands of dollars for non-existent vehicles, including Lexus, Audi, Ford, Chevrolet, Dodge, Toyota, Mercedes, Porsche and BMW cars; Big Dog Mastiff and Ninja motorcycles; a Fleetwood Storm motor home; and boats.

So, in a criminal complaint unsealed today in US District Court in the Eastern District of New York Romanian nationals Emil Butoi, 34, Aurel Cojorcaru, 43, Nicolae Ghebosila, 43, Cristea Mircea, 30, Ion Pieptea, 36, and Nicolae Simion, 37, and Albanian national Fabian Meme, 42, were each  charged with one count of wire fraud conspiracy and one count of money laundering conspiracy.   Butoi, Cojocaru, Meme, Mircea, Pieptea and Simion are also each charged with one count of passport fraud conspiracy. Butoi, Cojorcaru, Ghebosila, Mircea, Pieptea and Simion were arrested today and Meme is already incarcerated in the Czech Republic.  

As part of the scheme, Cojocaru, Meme, Butoi and others produced high-quality fake passports so that the  arrows  could use the passports as identification to open American bank accounts.  The complaint alleges that Cojocaru was recorded on video during the investigation displaying new holograms that he was using to create more authentic-looking passports, the DoJ stated. 

Law enforcement officials in Romania, the Czech Republic, the United Kingdom and Canada were involved in the busts.  If convicted, the defendants each face a maximum sentence of 20 years in prison on the wire fraud conspiracy and money laundering conspiracy counts, and 10 years in prison on the passport fraud conspiracy count.

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