Fraudulently Acquired IPv4 Addresses Revoked by ARIN
The US Registry for Internet Numbers, Ltd. (ARIN) won a legal case, against multi-year program designed to deceive the Internet community by approximately 735,000 IPv4 addresses. John Curran, President, and CEO of ARIN announced that the fraud had been discovered through an internal due diligence process.
ARIN is a non-profit organization responsible for distributing Internet numbers in the United States, Canada and parts of the Caribbean. The emerging market of IPv4 address transmission and growing demand has led to new attempts to fraudulently recover IPv4 addresses.
This is the first arbitration under the ARIN Registration Service Contract and the related process in the US District Court for the Eastern District of Virginia. ARIN has been able to prove the existence of a complicated scheme to fraudulently acquire resources, including many legalized official attestations sent to ARIN. “A company in South Carolina obtained and utilized 11 shelf companies across the United States, and intentionally created false aliases purporting to be officers of those companies, to induce ARIN into issuing the fraudulently sought IPv4 resources and approving related transfers and reassignments of these addresses. The defrauding party was monetizing the assets obtained in the transfer market, and obtained resources under ARIN’s waiting list process.” (ARIN Press Release).
The fraudulent entity adopts an aggressive position after ARIN requests to produce certain documents and explain its behavior. The suspects filed a motion for provisional detention orders and initial orders for ARIN in the US District Court and requested a hearing the following morning just before Christmas. “The aggressive posture was taken after ARIN indicated its intent to revoke addresses, while permitting defrauding entity to renumber to allow existing bona fide customers not to have service interrupted,” ARIN’s General Counsel told CircleID. “The litigation was filed against ARIN to seek an injunction to stop ARIN from revoking and enter arbitration. Some addresses were transferred for money prior to that demand, others were pending transfer and were never transferred due to ARIN investigation.”
Some fraudulently obtained addresses were transferred to third parties; however ARIN made no effort to pursue the parties that received the completed transfer, ARIN’s General Counsel told CircleID. The reason being: “(a) addressed were in another RIR service region (e.g. RIPE NCC and APNIC) and (b) ARIN did not see any evidence they knew of or participated in the fraud. In other words, they appeared to be bona fide 3rd parties.”
On May 1, 2019, ARIN obtained an arbitration award, which included revoking all fraudulent resources and $ 350,000 to ARIN for its legal fees.
UPDATE May 15, 2019: “Charleston Man and Business Indicted in Federal Court in Over $9M Fraud” – United States Department of Justice issues a statement announcing Amir Golestan, 36, of Charleston, and Micfo, LLC, were charged in federal court in a twenty-count indictment. The indictment charges twenty counts of wire fraud, with each count punishable by up to 20 years imprisonment.