A Charleston technology company and its CEO have both pleaded guilty to 20 counts of wire fraud.
The pleas from Micfo LLC, a Charleston tech company, and its CEO, Amir Golestan, came midway through a federal trial after prosecutors presented evidence that Golestan took in millions by creating fictitious personas and companies and selling internet address rights he fraudulently obtained, the U.S. Attorney’s office for the District of South Carolina said in a news release.
Through his scheme, Golestan pocketed roughly $3.5 million, with another $6.2 million waiting for him in escrow had he not been caught, the U.S. attorney said.
Under each count, Golestan faces a maximum penalty of 20 years in federal prison, a $250,000 fine, and three years supervision following imprisonment and restitution. Micfo faces a maximum fine of $500,000 under each count.
“Like many corporate fraud criminals often do, Golestan made the mistake of assuming his scheme would not be discovered,” Special Agent in Charge of the FBI Columbia Field Office Susan Ferensic said in a statement. “Make no mistake, the FBI along with our local, state and federal partners, will work nonstop to uncover and pursue charges for criminals who adversely affect our internet infrastructure.”
Golestan founded Micfo in Charleston in 1999, saying it provided web hosting and other internet services.
Between February 2014 and May 2019, when Golestan and Micfo were indicted, Golestan created 10 different, fabricated companies referred to as “Channel Partners.” Through the companies, Golestan obtained address rights to Internet Protocol version 4 addresses from the American Registry for Internet Numbers, the news release said. Like a street address, IPv4 addresses are numerical labels used to identify network computers.
“Corporate wrongdoers often avoid accountability by obscuring their criminal conduct through complicated business procedures or by operating in areas unfamiliar to most people,” said Criminal Division Chief Nathan Williams, who prosecuted the case alongside Assistant U.S. Attorney Amy Bower, in a statement. “The world of internet resources is one of those areas. However, this case shows that the FBI and U.S. Attorney’s Office, along with other agency partners, are capable of detecting complex crimes and prosecuting corporate and executive criminals.”
District Judge Richard M. Gergel accepted the guilty pleas, but as of press time had not sentenced Golestan.
Acting U.S. Attorney M. Rhett DeHart offered a special thanks to the FBI and ARIN, particularly ARIN’s Chief Customer Officer John Sweeting, General Counsel Michael Abejuela, and their outside counsel Steve Ryan and Sam Neel from McDermott Will & Emery LLP.
“Corporate and executive malfeasance can be difficult to detect and even harder to prosecute, and this case is an excellent example of the success we can achieve in spite of this difficulty when we work with our federal and agency partners,” DeHart said in a statement.