Feds' International Phishing Sting Nets Five; More Than 100 Involved

phishingFive members of an international cyber-crime ring were convicted on federal charges for their part in a phishing scheme that fooled consumers into revealing personal information that was then used to siphon their bank accounts.

The five scammers found guilty by a federal jury were among 53 defendants charged in the fall of 2009 as part of Operation "Phish Phry," a U.S.-Egyptian investigation that eventually resulted in charges against 100 people, the largest number of defendants ever charged in a U.S. cybercrime case. To date, the operation has led to 46 convictions in Los Angeles federal court.Operation Phish Phry busted an international scam whereby Egyptian hackers obtained account numbers and related personal information from bank customers by getting them to respond to phishing emails masquerading as official correspondence from banks and credit card companies.

The phishing emails instructed bank customers to visit bogus websites, where they were asked to enter passwords, account numbers, and other personal information. Because the phony websites contained bank logos, legal disclaimers and other details designed to confer legitimacy, victims had no idea they were unrelated to their financial institutions.

Once Egyptian members of the crime ring collected account information from the fake sites, they contacted U.S. members of the gang via text messages, phone calls and chat rooms to coordinate the transfer of funds from the victims' accounts to new ones created to receive the stolen money.

A spokesman for the U.S. attorney's office said estimated losses total approximately $1 million, but stressed that number may change.

The U.S. arm of the phishing ring was run by three people, including Nichole Michelle Merzi, one of the five defendants just convicted. Along with Merzi, the two other U.S. ringleaders were Kenneth Joseph Lucas, 26, and Jonathan Preston Clark, 26, both of Los Angeles. Lucas already pleaded guilty to conspiracy, bank fraud and aggravated identity theft, while Clark previously pleaded guilty to conspiracy and bank fraud. Both will be sentenced in June.

The U.S. ringleaders' roles included ordering underlings to recruit "runners" to establish bank accounts where the stolen funds could be transferred and then withdrawn. The newly created accounts were also used by the U.S. members of the gang to pass along a percentage of each theft to their Egyptian co-conspirators via wire transfer for their role in the scam.

The five defendants convicted on March 25 were:
  • Nichole Michelle Merzi, 25, of Oceanside, Calif. who was found guilty of conspiracy, computer fraud, bank fraud and aggravated identity theft.
  • Tramond S. Davis, 21, of Las Vegas, who was found guilty of conspiracy.
  • Shontovia D. Debose, 22, of Las Vegas, who was found guilty of conspiracy.
  • Anthony Donnel Fuller, 22, of Corona, Calif. who was found guilty of conspiracy and two counts of bank fraud.
  • Me Arlene Settle, 22, of Garden Grove, Calif. who was found guilty of conspiracy and two counts of bank fraud.
The five defendants are scheduled to be sentenced in October. The conspiracy and bank fraud charges carry maximum sentences of 30 years in federal prison. Aggravated identity theft carries a minimum sentence of two years that will be added to their sentences.

The jury that convicted the five defendants found another not guilty. One defendant has agreed to plead guilty, and one is a fugitive.

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