RICHMOND, Va. (WRIC) — Six men plead guilty in the Richmond Federal District Court to a $1.5 million fraud that involved identity theft, a chain of fictitious furniture stores and a phishing hack of servers, located in Virginia, that contained sensitive financial data.
According to a statement of facts — confirmed by all six defendants as a condition of their plea agreements — over a five year period from April 2017 to January of this year, the defendants posed as customers at various furniture stores, compromised the information of other furniture stores, and ultimately defrauded the stores and financial institutions of almost $1.5 million.
The six men — Mahmoud Aljibawi, Wael Jibawi, Yanal Khrisat, Mohammad Jibawi, Jamel Eljebawe and Alaelddin Aljibawi — faced 18 counts ranging from identity theft to computer fraud, and were ordered to pay $1,487,957.86 in restitution.
Playing Both Sides
The key to the men’s fraud was the existence of “lease-to-own” financing, a model often used by furniture and appliance stores, where an intermediary finance company pays for the goods up front, then collects payments, with interest, from the customer over the following months and years.
Below is an illustrated example using one of the defrauded companies, West Creek Financial.
That’s how the process normally works, but the six defendants used a complex sleight of hand to take the money and run.
They ran 25 furniture stores — some of which were legitimate stores and some of which never existed at all — and used them to apply to financing companies, like the Richmond-based West Creek, for partnership to offer consumer credit to their customers.
Once they were approved to offer “lease-to-own” agreements to paying customers, they began to submit credit card and lease applications to the companies using a mixture of stolen identities and fabricated information.
After the applications were improved, the company’s “customers” began to purchase thousands of dollars of furniture, which the stores then assured the companies had been successfully delivered.
The companies dutifully paid the stores up front for the goods, only to lose it all when the “customers” failed to pay what they owed.
Expanding the Operation
They didn’t stop there. Once they had an account with West Creek, they called the company’s support hotline posing as employees of a store called “Bernie and Phyl’s,” an existing customer of West Creek’s based in Massachusetts.
They managed to convince West Creek to let them set up an online payment account for the store, then promptly rerouted funds destined for the stores to their own bank accounts.
Then, using a tool called a VPN to hide their identities, they accessed West Creek’s servers in Northern Virginia, submitting several fake lease agreements and siphoning that money as well.
While all of this fraud occurred in Virginia — committed against a Virginia company and on Virginia-based servers — the six defendants were all 700 miles away, in Chicago, Ill.
Over the next five years, and using all 25 of their companies, the men would go to defraud Okinus, Greenwave Finance, Synchrony Bank and Wells Fargo, raking in an estimated $1.5 million.
Synchrony Bank, which offers credit cards for retail stores, lost over $500,000 over the course of six months in 2018.
One hundred thirty-three Synchrony cards were used at just one of the men’s businesses. The bank only realized the purchases were fraudulent when the cards’ owners — some from as far away as California and Florida — called to complain.
The defendants plead guilty to the following charges, and were ordered to pay restitution in the following amounts:
- Mahmoud Aljibawi – 2 counts wire fraud, 1 count computer fraud, 1 count using a fictitious name – $514,744.80
- Wael Jibawi – 2 counts wire fraud, 1 count computer fraud, 1 count using a fictitious name – $189,935
- Yanal Khrisat – 2 counts wire fraud, 1 count computer fraud, 1 count using a fictitious name – $56,500.33
- Mohammad Jibawi – 2 counts wire fraud, 1 count computer fraud, 1 count using a fictitious name – $297,713.73
- Jamel Eljebawe – 2 counts wire fraud, 1 count using a fictitious name – $122,260
- Alaelddin Aljibawi – 2 counts wire fraud, 1 count using a fictitious name – $306,804