Financial Fraud: Alex Mgbolu Sentenced To Defraud in an International Mass Marketing Consumer Fraud Scheme
Former Canadian MoneyGram And Western Union Agent Sentenced To 6o Months’ Imprisonment On Fraud And Money Laundering Conspiracy Charges
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Alex Mgbolu, age 45, of Toronto, Canada, was sentenced February 23, 2017 to 60 months’ imprisonment by Chief United States District Court Judge Christopher C. Conner for conspiring to defraud hundreds of American citizens out of more than $2.1 million in an international mass marketing consumer fraud scheme. Chief Judge Conner also ordered Mgbolu to pay $1,372,602 in restitution.
According to United States Attorney Bruce D. Brandler, Mgbolu, a former Western Union and MoneyGram agent, pleaded guilty in August 2016, to conspiracy to commit mail fraud, wire fraud and money laundering.
Mgbolu conspired with Chima Nneji, William Nneji, and other unnamed individuals between July 2002 and May 2010, to commit the crimes. Mgbolu was extradited to the United States from Canada.
Mgbolui was the owner/operator of a Western Union agency called FA CAM Associates (FA CAM) and a MoneyGram agency also known as FA CAM. Both agencies were located in Toronto, Canada. Between July 2002 and May 2010, international mass marketing fraudsters allegedly instructed hundreds of consumer fraud victims across the United States to send Western Union and MoneyGram money transfers to Canada where the transfers were paid out by Mgbolu at FA CAM. Mgbolu concealed the fraudsters’ identity by entering false names and identification data into the Western Union and MoneyGram computer data bases. Analysts from the Toronto Police and U.S. Postal Inspection Service have determined that over 90% of the payee addresses and identification numbers entered at FA CAM were invalid. For his role in the scheme Mgbolu retained a portion of the money transfers before sending the balance of the proceeds on to the fraudsters.
As a Western Union agent, between July 2002 and April 2006, FA CAM paid out 213 money transfers totaling $453,119 that were reported by the senders as having been fraud induced. As a MoneyGram agent, FA CAM paid out 67 transfers totaling $149,723 between August 2006 and September 2007 that were reported by the senders as having been fraud induced.
After Western Union terminated FA CAM and MoneyGram restricted FA CAM’s ability to pay out money transfers, money transfer checks from other fraud-complicit MoneyGram Western Union agents in the greater Toronto area were deposited into FA CAM’s bank account. The deposit of fraudulently induced funds into what appears to be a legitimate business bank account and the subsequent reissuance of the proceeds via checks and wire transfers helps to launder the proceeds and conceal the identity of the fraudsters is known as “check pooling.”
Overall, between July 2002 and May 2010, FA CAM and the 13 complicit Western Union and MoneyGram agents paid out 907 money transfers totaling $2,127,410 that were reported by the senders as being fraud induced.
Codefendant Chima Nneji pleaded guilty to the same conspiracy charge before Judge Conner on July 21, 2016. Nneji was sentenced on December 7, 2016, to 45 months’ imprisonment and ordered to pay $381,729 in restitution.
The lower restitution amount is due in part to monies compensated to victims as part of the U.S. v. MoneyGram, deferred prosecution agreement in the Middle District of Pennsylvania which established a $100 million restitution fund in 2013 for MoneyGram customers that were victims of consumer fraud. A $586 million dollar restitution fund was also recently established for victims of consumer frauds who sent their monies through the Western Union money transfer system. Like the MoneyGram fund, the Western Union fund was established in January of this year as a result of a deferred prosecution agreement with the Middle District of Pennsylvania and the US Department of Justice.
Codefendant William Nneji remains a fugitive from justice.
The case was investigated by the Harrisburg Office of the United States Postal Inspection Service, and assisted by the Toronto Police. Assistant United States Attorney Kim Douglas Daniel prosecuted the case.
