Join me to hear the story of Amir Golestan and his company Micfo’s scheme to fraudulently obtain and sell nearly a quarter million IP addresses! This is eCrimeBytes.com Season 2 Episode 16 Act 2: Selling Fraudulent Internet Addresses With Amir Golestan – Act 2: Make Fat Stacks.
Be sure to checkout out our prior act for the background:
Sources:
- https://www.justice.gov/usao-sc/pr/charleston-county-man-sentenced-5-years-federal-prison-wire-fraud
- https://www.justice.gov/usao-sc/pr/tech-company-and-ceo-plead-guilty-twenty-counts-wire-fraud-mid-trial
- https://www.courtlistener.com/docket/15573090/united-states-v-golestan/
- https://krebsonsecurity.com/2023/10/tech-ceo-sentenced-to-5-years-in-ip-address-scheme/
- https://www.linkedin.com/in/golestan/ (Photo)
- https://www.linkedin.com/company/micfo-llc/
- https://www.youtube.com/@amirgolestan
- https://twitter.com/micfo (Photos)
- https://twitter.com/micfo/status/1057706166820712449 (Photo)
- https://www.live5news.com/2023/09/21/charleston-county-man-sentenced-after-pleading-guilty-wire-fraud/ (Photo)
Transcript:
00:00:10:01 – 00:00:40:38
Keith
Hey, you crazy bastards! Welcome back to eCrimeBytes, where I research the court documents and roast the criminals so you don’t have to. I left you on season two, Episode 16. This is Amir Golestan, and he is selling fraudulent Internet addresses. This is Act two. Back in Act One, I brought to you this concept that there’s IP addresses and these addresses the required to get on the Internet.
00:00:40:42 – 00:01:13:48
Keith
So if you want to put your phone on the Internet or your computer, you need an IP address to be assigned to your device so other devices can talk to it. So there is this organization out there called ARIN, and it stands for American Registry of Internet Numbers. And they control this finite set of IP addresses. And since it’s finite and more and more people want to get on the Internet. You can imagine IP addresses, they hold some monetary value that eventually they go up over time because it’s a finite set.
00:01:13:48 – 00:01:28:35
Keith
So as more people want to get on the Internet, you know, back in the day they might cost about ten bucks an IP address. And by the end of this case, you’ll see they cost about $19 an IP address. So the cost per IP address starts to go up.
00:01:28:35 – 00:01:40:52
Keith
So Amir Golestan, he owns this company named Micfo, and he set up something called Channel Partners, which ends up being just tons of fake companies behind the scenes.
00:01:40:57 – 00:02:18:17
Keith
And then he sets up fake people that are officers of this companies and fake websites of these companies. Why? Well, to talk to ARIN in order to get IP addresses assigned to these fake companies from ARIN in much greater numbers than if he were to just talk to ARIN through himself and Micfo just one company. So at the end of Act One I left you with, he now owns about three quarter million IP addresses and it ranges from about $9 to $14 million.
00:02:18:18 – 00:02:43:36
Keith
That’s that’s the value of these IP addresses. And under normal circumstances, ARIN, probably would not have assigned so many IP addresses to just one individual and one entity. So this whole thing that I’m bringing you is fraudulent from the get go because it’s fake people, fake companies, fake everything in order to get these IP addresses for Amir to make money.
00:02:43:36 – 00:03:07:12
Keith
So with all that background, Amir wants to sell these IP addresses. As you imagine, he’s sitting on a goldmine, right? He went to a third party broker and initially he sold about 65,000 IP addresses for $13 each, and he made about $851,000 on it. So a crap ton of money, right?
00:03:07:12 – 00:03:08:41
Keith
He then went to
00:03:08:41 – 00:03:16:41
Keith
his pile of IP addresses, picked another 65,000 and went out there and made another transaction.
00:03:16:45 – 00:03:27:20
Keith
And this time it was for $1 million. So already these are just two transactions is almost at $2 million, probably almost pure profit, I imagine at this point.
00:03:27:20 – 00:03:45:36
Keith
So then he decides, I’m going for it, man. I’m going for it. He decides he wants to sell 327,000 IP addresses at $19 apiece for a total of over $6.2 million. And
00:03:45:36 – 00:03:54:25
Keith
it was so many IP addresses in this proposed sale that this is where ARIN said, Hold the fuck up.
00:03:54:25 – 00:04:18:12
Keith
What’s going on over here? And that’s where they detected the fraud at the time, and they were able to prevent this transaction. So he’s sitting on at least about $2 million, and he almost was going to make about another $6.2 million based upon what I would say is a pretty simple fraud scheme. If you can understand how the Internet works behind the scenes.
00:04:18:12 – 00:04:37:18
Keith
Amir definitely did, because that was his job as CEO of this company, as a cloud services provider. So as you can imagine, if I can make this a world, a real world analogy for you, it would be like if one corporation went up and bought a whole neighborhood. But they use strawman individuals. It looks like, you know,
00:04:37:18 – 00:04:39:53
Keith
the Jones family came in and bought one house.
00:04:39:58 – 00:05:01:58
Keith
The Smith family came in, bought another house. The Riley family came in and bought another house. But really all these families were just giving it to this company. And the company owned it at the end of the day. So you can imagine if one company owned this really sought after neighborhood, they could pretty much set whatever price they want for the houses if everybody wants to get into this neighborhood.
00:05:02:03 – 00:05:22:06
Keith
Right. They would make money off that fraud. That’s kind of what is happening here in the computer sense and in IP address sense. So I gave you the physical house example. Same thing sort of is happening on the Internet. It’s just happening with these numbers, this finite set of numbers.
00:05:22:06 – 00:05:40:02
Keith
So because ARIN figured this out, they decided to sue Micfo and Amir Golestan back in 2018 and when this happened, when this lawsuit happened.
00:05:40:06 – 00:06:09:15
Keith
If you’re not familiar with lawsuits, don’t worry. Back in the day, I wasn’t either. So there’s there’s two types of lawsuits in America. There is criminal, which is usually what I bring you in these cases. It’s when police officers are involved and then there is civil, which is sort of people suing people without police officers involved. And it’s like grievances, like you’re trying to take my property or you are breaking a contract or something along those lines.
00:06:09:20 – 00:06:43:34
Keith
That’s the realm that ARIN is suing Micfo and Golestan in here. And then that’s when the criminal prosecutors looked and said, wait a minute, what the fuck is going on over here? And they decided to do a criminal investigation as well. So very, very bad moment in time for Amir Golestan. Okay. So they do their investigation, the prosecutors do, and they come back and May 14th of 2019 with an indictment, 20 counts.
00:06:43:39 – 00:07:14:53
Keith
And if you’re wondering what 20 counts, it was those 20 counts of wire fraud that I brought to you in Act One, where it was each instance of these fake officers signing these affidavits about owning these fake companies and needing these IP addresses for fake purposes. So basically, that wire fraud covers all that fraud that they did was setting up the companies and the fake people and everything.
00:07:14:58 – 00:07:30:23
Keith
So when the indictment came out, you know, it goes through the usual legal process where they say, hey, what do you plead? And he says, not guilty and he’s out on bond. And the bond was 500,000 unsecured bond and he was out. And June 3rd of 2019.
00:07:30:23 – 00:07:35:09
Keith
So some time goes by and something happens and I couldn’t figure out why.
00:07:35:11 – 00:07:55:57
Keith
I try to listen when there’s gaps like this. Trust me, when I don’t give you these gaps because I’m lazy, I give these gaps a lot of times because there’s just no information that I can pull. And there was no information about their or why this happened, but it happened. November 2021 Golestan decides he doesn’t want a jury trial.
00:07:55:57 – 00:08:13:24
Keith
He wants a bench trial, which means he wants to leave his fate in the hands of one person, the judge. Now, lawyers can argue the reasons why this happens. Just generally, I’m not a lawyer. Just generally, as a layman, I will tell you,
00:08:13:24 – 00:08:20:30
Keith
it seems like you do that when you want the person to interpret the law and not use emotion.
00:08:20:35 – 00:08:43:50
Keith
You would hope a judge would use logic more than emotion, and a jury would probably rule on a little more emotion than they would logic. So sometimes a defendant would say, I really hope a jury would emotionally rule in my favor on this and you would want to go with a jury. Well, I think here for some reason, he decided that emotion isn’t going to work in his favor.
00:08:43:50 – 00:08:49:04
Keith
And he wants to just have a judge preside over his trial and have no jury.
00:08:49:04 – 00:09:07:35
Keith
I think it would be easier for him to muddy the waters with a jury and all these technical terms that I’m throwing at you and if you can muddy the waters with a jury, you might get a not guilty. If they can’t understand the concept that the person is being accused of. A judge,
00:09:07:35 – 00:09:10:36
Keith
I think one person you probably have a little more
00:09:10:36 – 00:09:42:12
Keith
easier time educating him or her about this topic than you may a jury. A jury may just not even care. Whereas a judge, you know, it’s their job. They’re being paid to care about this. So anyways, okay, so in preparing for a trial, there was one particular government witness that popped up in the government documents that I wanted to highlight for you, because this was Victoria Latham, Latham or Latham, not sure I’ll say Latham.
00:09:42:16 – 00:10:14:25
Keith
She is a former employee of Micfo, she is a government witness and she is Mr. Golestan’s executive assistant. And at the end of the day the Government says her testimony. I don’t have her actual testimony, but I have what the Government said she was going to testify about and she said there was this spreadsheet called quote unquote Project G77, and that is how Golestan tracked his channel partner companies.
00:10:14:30 – 00:10:22:37
Keith
So I can imagine that testimony right there. Golestan probably saw it was like, Holy shit, I can’t I can’t have that testimony is not going to be good.
00:10:22:37 – 00:10:39:18
Keith
So November 15th of 2021, the bench trial starts with just the judge. The government starts their case. That’s how it starts. The government has to prove what it needs to prove in the indictment, those 20 counts.
00:10:39:23 – 00:11:07:27
Keith
So it starts to go through the you know, starting what I started with at the beginning of, hey, this is what an IP addresses. This is how you get one. This is what ARIN is. It starts to go through that process and it starts to give it’s case of here’s my witnesses and the next day and November 16th, 2021, Golestan and Micfo pleaded guilty to all 20 counts just said, hey, fuck it, guilty.
00:11:07:31 – 00:11:30:18
Keith
I don’t know why there was nothing in the court paperwork that said why. This is one of those things that I really wish there was a document out there of the reason why, but he pled guilty on part way in to day two. So I can only imagine it was probably testimony from a witness like I just brought to you with Ms.
00:11:30:18 – 00:11:46:20
Keith
Latham. I imagine you had witnesses on the stand getting into very damning evidence like this. And Golestan probably went, Holy shit, this is not good. It’s probably better if I just say I’m guilty now and hope for a more lenient sentence.
00:11:46:20 – 00:11:51:10
Keith
So in this time. Micfo obviously
00:11:51:10 – 00:12:07:33
Keith
he’s guilty, right? And that’s Micfo’s part of it. So it goes into bankruptcy and it has a trustee and Amir’s still kind of associated with it until December 29th of 2021.
00:12:07:33 – 00:12:21:27
Keith
He decides to resign from his company Micfo. So now it’s just basically it’s now owned by a trustee. And I believe that’s because it owes more than it’s bringing in.
00:12:21:27 – 00:12:41:44
Keith
And June 7th of 2022, there’s a preliminary order of forfeiture. So the government or the court says all IP addresses are now ours. And also from the sales, they’re taking back about well just over $3.3 million.
00:12:41:53 – 00:13:00:24
Keith
So quite a bit that Amir Golestan and Micfo made these transactions. And remember, he was stopped on his lion’s share transaction that was over $6 million. So he made $3 million. But he was going he was going for broke for six. And I imagine he was probably going to try to sell them all by the time he was done.
00:13:00:24 – 00:13:18:34
Keith
So on July 22nd of 2022, Amir’s bond is revoked because he pled guilty. And, you know, things are being forfeited and he’s heading toward prison. Right. So you imagine his bonds revoked. He’s going. He’s sitting in custody now. Probably gives him some time to think.
00:13:18:34 – 00:13:28:33
Keith
In April 25th of 2023, His sentencing is scheduled. Okay. A whole bunch of shit happens at this point.
00:13:28:33 – 00:13:51:37
Keith
And I apologize. You can’t really see it in a timeline, but so imagine he just got detained. He’s sitting in there and I imagine jail’s not pleasant. A few months later. It’s now April 25th of 2023. They say, hey, we’re going to start to schedule your sentencing. He goes the next day he goes up. No, no, forget. Nope, I want to withdraw my guilty plea.
00:13:51:42 – 00:14:13:05
Keith
I don’t know why. Again, this information was not it was not something I was able to pull through the public system. I tried to pull it. It says the document doesn’t exist. There’s a document out there somewhere that says why he tried to withdraw his guilty plea. I know he tried to. And then the court later says, nope, you can’t.
00:14:13:05 – 00:14:36:11
Keith
So I was able to get my hands on another document where the court says, you know, your motion to withdraw. And then there was a second motion to reconsider. When they said no on that motion, they said all these motions for your guilty plea to be revoked, no, we’re not taking it because all your arguments are just the same arguments that you’ve been making and just none of it’s new and we’re just not having it.
00:14:36:11 – 00:15:01:35
Keith
So your guilty plea stands, buddy. So on September 13th of 2023, sentencing rolls around. It’s okay. To recap, he was detained, probably was like, holy shit. Tried to revoke his plea. He doesn’t want to be detained anymore and now he’s going to get sentence and he’s probably standing there with his fingers crossed, going to please, please, please, please, please, no prison sentence.
00:15:01:39 – 00:15:02:56
Keith
And the judge comes back and
00:15:02:56 – 00:15:38:58
Keith
he or she says, 60 months counts one through 20 to run concurrently. So he has to spend five years in prison. And furthermore, you remember there was a forfeiture of over $3 million that he made on these IP addresses. But the court also says restitution, buddy restitution in almost $77,000 has to go back to ARIN to pay their costs of all the stuff that they had to deal with investigations and all that stuff related to you, that was that cost and you’re paying it.
00:15:38:58 – 00:15:47:54
Keith
So after he’s in prison, he’s given a supervised release term of two years, which is a little shorter than the average a lot of times at three years.
00:15:47:54 – 00:16:06:12
Keith
And like I said, until it’s paid for, he has to pay a $77,000 restitution to ARIN. And you can imagine he gets that. And I just just from seeing that
00:16:06:12 – 00:16:28:08
Keith
he tried to withdraw his guilty plea. I imagine he doesn’t like prison. And so that probably led to his next next decision, which was on September 14th of 2023, he dropped a notice of appeal because he probably looked at that sentence and was like, Holy shit, five years. No way. So he’s going to try to appeal as much as possible.
00:16:28:13 – 00:16:47:02
Keith
And that’s that’s the point where I started this research. So appeal is in motion. So maybe someday I’ll be able to figure out what it is that his appeal said, and we’ll be able to pull more information on this case. But I thought that this case was incredibly interesting. We’re at the end of it now. Some final thoughts.
00:16:47:02 – 00:17:05:24
Keith
I picked this case because it was a nerdier subject. The object of the crime here was IP addresses. As a layman, you didn’t need to know what they were for. If you were a computer person like me. It made a little more interesting because is what we deal with every day on the Internet, and it was an interesting way to monetize this whole crime.
00:17:05:29 – 00:17:19:34
Keith
But at the end of the day, it still boiled down to plain fraud. It boiled down to something he got fraudulently that other people wanted that was in short supply, that he was able to put a hefty price on and make money. That’s basically how fraud works.
00:17:19:34 – 00:17:23:17
Keith
There’s a lot of money to be had in IP address ownership.
00:17:23:17 – 00:17:38:22
Keith
I knew it just generally before this case, but after I started putting some numbers to the crimes in this case, it was just astounding to me that it was millions of dollars that one person could rack up in this in this type of scheme.
00:17:38:22 – 00:17:45:31
Keith
And that’s because whenever there’s a low supply of something but high demand in anything, a market is going to pop up.
00:17:45:31 – 00:18:09:45
Keith
And it popped up with this IP address sale market. And that’s what Amir Golestan used for his fraud. Now, one last point here. This is another one of those cases where I thought it was pretty interesting where he pled guilty to everything. Now I kind of think it happened in this case because they were already in the middle of trial.
00:18:09:45 – 00:18:34:27
Keith
So the government already went to the expense of the trial. The jurors were already picked. They already the jurors were already fed once they had lunch the day before. So things are in motion. And I imagine his only choice to plead guilty at this point were probably was probably to all the counts. But you can see, you know, like what, a couple of months later when he was actually detained, he tried to take it all back.
00:18:34:27 – 00:18:42:28
Keith
So you didn’t see him take it back when he was out of prison. But then you saw him go back to prison and get ready for sentencing. And then he tried to take it all back.
00:18:42:28 – 00:18:56:10
Keith
And with that, that’s it. That’s the case. Hey, listen, if there’s anything you liked in this episode, please thumbs up. Like, follow, subscribe, whatever the positive thing is on the application that you’re watching me on.
00:18:56:15 – 00:19:20:44
Keith
If you haven’t been to our website, please go. It’s ecrimebytes dot com and bytes is spelled the computer way b y as in yellow milk t e s. I’m now going to pop up the thumbnail for our bonus episode that’s coming tomorrow. This is not next week. This is tomorrow. This is the bonus episode for this week. This is Pat the bat and Dr. Alario updates. Now.
00:19:20:44 – 00:19:46:29
Keith
Pat the bat was the one that we did and in season one where Seth and I brought to you this hired hitman of sorts that would go out there and flex a little muscle for the right amount of money. And pat the bat went out and shot up somebody’s house and luckily nobody was hurt in one case. And then he went out there and firebombed somebody else’s house.
00:19:46:33 – 00:20:06:50
Keith
Luckily, nobody was hurt. The house is pretty well damaged. But when he did it, he looked like an absolute complete fucking idiot and he could have probably burnt the whole house down. But they missed and didn’t. It didn’t even actually throw the firebomb in the house. They threw it on the side of the house and they sound like idiots and like, fuckin light it, man.
00:20:06:50 – 00:20:29:26
Keith
Fuckin light it fuckin light it. And it’s just it’s. I’ll play the video for you in this episode. It’s. It’s just jaw dropping, trust me. So I really, really hope you come back and join me because there are some updates. I’m going to give you a real quick get up to speed in case you haven’t seen our episodes, but then I’m going to give you the updates on what happened in both of those cases because they were sentenced, both of them.
00:20:29:31 – 00:20:45:33
Keith
They were sentenced. And in one case, yeah, the sentence was about right. And then the other case, the sentence was completely off and not even close in my opinion. So stay tuned for that. I hope to see you soon. Thanks. Bye.
Leave a Reply