Four accused in business email compromise scheme which reaped millions from victims

Four men accused of participating in credit card fraud and business email compromise (BEC) schemes were arrested on Friday.

California residents Joel Zubaid, David Goran and Julian Rebiga, and Nevada resident Martin Mizrahi, are accused of defrauding businesses, individuals and banks of more than $9.2 million during a three month period in mid-2021. 

A grand jury indictment released on Friday outlines how the four men primarily used email scams targeting specific businesses to initiate fraudulent wire transfers. 

In one case, the four allegedly gained access to the email address of the chief financial officer at a community development organization, which they used to request wire transfers from the organization’s bank account. Ultimately, nearly $3.5 million was transferred, with $1.57 million going to an account allegedly controlled by two of the defendants. The funds were allegedly transferred to other accounts and converted to Bitcoin.

In another case, they allegedly took over the email account of an employee at a company owned by a private equity fund. They then initiated a payment to the purported employee of around $2 million, according to the indictment.

The men also allegedly conducted widespread credit card fraud, on cards issued in third parties’ names without their consent. Nearly $4 million was charged in this fashion, with the defendants writing email justifications for the charges after some were disputed.  

The charges – which relate to wire fraud, bank fraud, money laundering and identity theft – will be brought in the Southern District of New York. The United States Secret Service and FBI participated in the investigation. If convicted, each of the charges carry maximum sentences of 20 to 30 years in prison.

From June 2016 to December 2021, $43 billion in losses to BEC scams were reported globally, with a sharp rise reported during lockdowns related to the COVID-19 pandemic, according to the FBI.