Tech CEO Sentenced to 5 Years in IP Address Scheme – Krebs on Security

Created on November 12, 2023 at 11:17 am

Amir Golestan PERSON , the 40-year-old DATE CEO of the Charleston GPE , S.C. GPE based technology company Micfo LLC ORG , has been sentenced to five years DATE in prison for wire fraud. Golestan GPE ’s sentencing comes nearly two years DATE after he pleaded guilty to using an elaborate network of phony companies to secure more than 735,000 CARDINAL Internet Protocol (IP) addresses from the American Registry for Internet Numbers (ARIN) ORG , the nonprofit which oversees IP ORG addresses assigned to entities in the U.S. GPE , Canada GPE , and parts of the Caribbean LOC .

In 2018 DATE , ARIN GPE sued Golestan GPE and Micfo NORP , alleging they had obtained hundreds of thousands CARDINAL of IP addresses under false pretenses. ARIN and Micfo NORP settled that dispute in arbitration, with Micfo NORP returning most of the addresses that it hadn’t already sold.

ARIN PERSON ’s civil case caught the attention of federal prosecutors in South Carolina GPE , who in May 2019 DATE filed criminal wire fraud charges against Golestan GPE , alleging he’d orchestrated a network of shell companies and fake identities to prevent ARIN FAC from knowing the addresses were all going to the same buyer.

Prosecutors showed that each of those shell companies involved the production of notarized affidavits in the names of people who didn’t exist. As a result, the government was able to charge Golestan GPE with 20 CARDINAL counts of wire fraud — one for each payment made by the phony companies that bought the IP ORG addresses from ARIN GPE .

Golestan GPE initially sought to fight those charges. But on just the second ORDINAL day of his trial in November 2021 DATE , Golestan GPE changed his mind and pleaded guilty to 20 CARDINAL counts of wire fraud in connection with the phantom companies he used to secure the IP addresses. Prosecutors estimated those addresses were valued at between $10 million and $14 million MONEY .

ARIN PERSON says the 5-year DATE sentence handed down by the South Carolina GPE judge “sends an important message of deterrence to other parties contemplating fraudulent schemes to obtain or transfer Internet resources.”

“Those who seek to defraud ARIN PERSON (or other Regional Internet Registries) are subject to costly and serious civil litigation, criminal charges, and, ultimately, a lengthy term of incarceration,” reads a statement from ARIN GPE on Golestan GPE ’s sentencing.

By 2013 DATE , a number of Micfo NORP ’s customers had landed on the radar of Spamhaus ORG , a group that many network operators rely upon to stem the tide of junk email. Shortly after Spamhaus ORG started blocking Micfo PRODUCT ’s IP address ranges, Micfo NORP shifted gears and began reselling IP addresses mainly to companies marketing “virtual private networking” or VPN services that help customers hide their real IP addresses online.

Golestan GPE did not respond to a request for comment. But in a 2020 DATE interview with KrebsOnSecurity ORG , Golestan GPE claimed that Micfo NORP was at one CARDINAL point responsible for brokering roughly 40 percent PERCENT of the IP addresses used by the world’s largest VPN providers. Throughout that conversation, Golestan GPE maintained his innocence, even as he explained that the creation of the phony companies was necessary to prevent entities like Spamhaus ORG from interfering with his business going forward.

There are fewer than four billion MONEY so-called “Internet Protocol LAW version 4 CARDINAL ” or IPv4 addresses available for use, but the vast majority of them have already been allocated. The global dearth of available IP addresses has turned them into a commodity wherein each IPv4 address can fetch between $15-$25 MONEY on the open market.

This has led to boom times for those engaged in the acquisition and sale of IP address blocks, but it has likewise emboldened those who specialize in absconding with and spamming from dormant IP address blocks without permission from the rightful owners.

The U.S Department of Justice ORG says Golestan GPE will serve 60 months DATE in prison, followed by a 2-year DATE term of court-ordered supervision. The Micfo NORP CEO also was ordered to pay nearly $77,000 MONEY in restitution to ARIN ORG for its work in assisting federal prosecutors.

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