The FBI recently concluded a rather unique case of identity theft: it found one company trying to steal $23 million by pretending to be a whole other company.
In a release, the FBI said the crime was made possible by what it called a remarkable coincidence: two private security companies with nearly identical names.
One of the firms, based in Michigan, was named Executive Outcome Inc. The other, based in South Africa, was called Executive Outcomes Inc. According to court papers, Executive Outcomes had provided military equipment, military security, and training to the Government of Sierra Leone in 1995-1997, and was making debt recovery efforts through the Sierra Leone legal system.
According to the FBI criminal activities started in late 2001, when a British debt collector called the Michigan-based Executive Outcome, run by Pasquale John DiPofi. The collection agency asked if DiPofi wanted help collecting $23 million owed by the government of Sierra Leone for military equipment, security, and training. They forgot to mention one little detail however: The millions of dollars weren't owed to DiPofi's company. It was owed to the South African company Executive Outcomes.
In spite of knowing the truth, DiPofi hired the collection agency to pursue the debt. He and an employee, Christopher Belan - an ex-police officer, then began producing documents to back up their claim, the FBI said in court. DiPofi also registered a new company in Michigan and in England to mirror the name of the South African company.
The debt collector filed paperwork with the government of Sierra Leone on DiPofi's behalf. That's when alarm bells went off: Sierra Leone had already agreed to a payment plan with the South African company, the FBI said. The government balked when the new claim was submitted.
One would think that would have scared DiPofi off, but it didn't. A legal skirmish followed between DiPofi and the South African company, the FBI said. The FBI got involved after a representative of the South African company got a phone call urging him not to be "greedy" and to reach a settlement with DiPofi's company soon-or else. The representative also received a letter with several interior pictures of his homes in London and Paris. That representative called in the help.
Long story short, the FBI searched DiPofi's office and found evidence of the forged documents. In the end all DiPofi and Belan got was prison time. Both pled guilty to conspiracy, wire fraud, and other charges. Each received prison time and paid $51,000 to the South African representative they threatened to compensate for the extra security he hired.
Dipofi was sentenced in federal court today to 40 months in prison, $51,674 in restitution, a $300 special assessment, and a three-year term of supervised release after being convicted of conspiracy, wire fraud, and income tax evasion, in connection with his scheme to defraud the government of Sierra Leone, Africa, and other victims of over $23 million. Belan reportedly got 37 months an a similar restitution requirement.
"This probably started as a crime of opportunity," said Special Agent William Fleming in a release. "When the call came in, the coincidences of the similar company names and all that money on the table must have been a huge temptation."
By some accounts identity theft of individuals is up 200% over the past year. And the Internet Crime Complaint Center (IC3) reported last week that it had logged its 1 millionth consumer complaint about alleged online fraud or cyber crime.
Since it opened shop in 2000, IC3 has referred 461,096 criminal complaints to federal, state, and local law enforcement agencies around the country for further consideration.
The vast majority of cases were concerning fraud and involved financial loss on the part of the complainant. The total dollar loss from all referred cases of fraud was estimated to be $647.1 million with a median dollar loss of $270 per complaint.