Crime
Justice Served: Scammer Sentenced in Major Construction Payment Fraud
Another member of fraudulent funds transfer ring gets seven years in jail
Oludayo Kolawole John Adeagbo was sentenced Oct. 1 in federal court in Charlotte, N.C. to seven years in prison.
Photo courtesy U.S. General Services Administration
A dual British-Nigerian citizen who posed on the internet and through email as American contractor employees to defraud project owners will spend seven years in prison, a federal judge in North Carolina ruled Oct. 1. Prosecutors say the scheme netted $14 million, which could have been much higher, if suspicious banking activity had gone unnoticed.
Oludayo Kolawole John Adeagbo, 45, was a leader in a conspiracy to commit wire fraud and launder stolen funds using what authorities call a business email compromise, or BEC, scheme, according to prosecutors. The schemes typically use fake but real-seeming email addresses to redirect invoiced funds.
Adeagbo and the others registered for an account with a construction project data aggregator and bought information related to dozens of projects, including names of the owners and contractors, and the amounts of the contracts. They used the information to target victims, typically public entities such as universities and local governments, by impersonating contractors or other vendors.
In one example highlighted by prosecutors, Adeagbo registered the domain rodgersbuildersinc.com to impersonate Rodgers Builders, which has a real website at rodgersbuilders.com. The contractor was working on a project for Appalachian State University in North Carolina, and the scammers used an email at their fake domain with the name of a real Rodgers staffer to ask a university employee to update banking information to a new account.
A few days later, the university processed a $1.9-million payment for Rodgers, and directed the money into the scammers’ account.
“Adeagbo ran a sophisticated 21st century cyber-criminal operation hiding behind fake email accounts and anonymous internet addresses to steal from the innocent,” said Alamdar Hamdani, U.S. attorney for southern Texas, in a statement.
The scammers defrauded more than 30 city governments, colleges and other entities, and unsuccessfully targeted dozens more. Victims attempted to wire more than $48 million altogether, although banks halting suspicious transactions and authorities recovering funds before they left the country caught most of it. Still, prosecutors wrote in a court filing that “the scheme was outrageously successful, even when considering similar BEC schemes.”
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Prosecutors could not say exactly how much profit Adeagbo personally took from the scheme, but his online presence showed he purchased items such as luxury vehicles and expensive watches. He was extradited from the U.K. in 2022.
In addition to the prison term, U.S. District Court Judge Kenneth Bell sentenced Adeagbo to a year of supervised release and ordered him to repay more than $900,000 in restitution. An attorney representing Adeagbo did not immediately respond to inquiries.
BEC scams are a growing problem. According to the FBI, annual losses from such scams have risen from $1.2 billion in 2018 to $2.9 billion last year. Anyone who suspects they may have become a victim of a BEC scheme can report it to the FBI’s Internet Crime Complaint Center at bec.ic3.gov.
“The BEC is one of the fastest growing and most costly scams and the only way to fight it is through cooperation, often international cooperation, and this case is a prime example of partnerships working,” said Michael Nordwall, FBI executive assistant director, in a statement.
A second scammer involved in the scheme, Donald Ikenna Echeazu, 42, was sentenced last year to 18 months in prison and ordered to pay more than $655,000 in restitution. A third man, Olabanji Oladotun Egbinola, who prosecutors previously linked to the scheme, was sentenced last year to four years in prison and ordered to pay nearly $470,000 in restitution.
