How a Nigerian Man Used Stolen Data From 800 Americans to Commit Fraud
A Nigerian man has been sentenced to eight years in prison in the United States after participating in hacking and fraud schemes that exposed the personal information of about 800 customers of American tax preparation businesses.
Chukwuemeka Victor Amachukwu, 40, and his associates used stolen customer information to file fraudulent tax returns and obtain government payments, according to the US Department of Justice.
The group sought at least $8.4 million in fraudulent tax refunds and successfully obtained about $2.5 million. The conspirators also collected at least $819,000 through fraudulent applications for a US government loan programme.
Amachukwu was sentenced by US District Judge Paul G. Gardephe after pleading guilty to conspiracy to commit computer intrusions and conspiracy to commit wire fraud.
The case goes beyond stolen data. Prosecutors also linked Amachukwu to a separate investment fraud that generated more than $7 million in fraudulent proceeds.
How the Nigerian man accessed customers’ personal data
According to the US Attorney’s Office for the Southern District of New York, Amachukwu, his co-conspirator Kingsley Uchelue Utulu and other Nigeria-based associates began targeting American tax preparation businesses around 2019.
The group used spear-phishing emails to gain unauthorised access to the companies’ electronic systems.
Spear-phishing involves sending targeted messages designed to trick specific individuals into revealing information or granting access to digital accounts and systems.
Once inside the businesses’ systems, the conspirators stole tax records and other identifying information belonging to approximately 800 customers.
The affected businesses operated in New York, Texas and other parts of the United States.
The stolen information provided the group with details it could use to impersonate victims and pursue financial benefits in their names.
How stolen customer data helped the group obtain millions
After accessing the records, the conspirators used stolen identities to submit fraudulent tax returns to the Internal Revenue Service and state tax authorities.
They sought refunds totalling at least $8.4 million. However, court documents indicate that they obtained at least $2.5 million from the tax fraud scheme.
The group also exploited stolen identities to submit fraudulent applications to the US Small Business Administration’s Economic Injury Disaster Loan programme.
The programme provided financial assistance to eligible businesses affected by the COVID-19 pandemic. Prosecutors said the conspirators obtained at least another $819,000 through fraudulent applications.
These activities meant the scheme extended beyond the affected businesses and their customers. It also involved attempts to obtain public funds through the misuse of stolen identities.
Nigerian man also linked to $7 million investment fraud
The hacking operation was not the only fraud scheme connected to Amachukwu.
According to prosecutors, he participated in a separate investment scam involving purportedly valuable standby letters of credit.
A standby letter of credit is a bank-backed financial instrument that guarantees payment if a customer fails to meet certain obligations.
In this case, prosecutors said the investments offered to victims did not exist.
Amachukwu allegedly impersonated a wealthy overseas financier to persuade victims to invest in the fictitious financial instruments. He and his associates obtained more than $7 million from the scheme.
The investment fraud added another substantial amount to the losses linked to the offences.
What the US court ordered after the sentencing
Alongside the eight-year prison term, Amachukwu received one year of supervised release after completing his sentence.
The court also ordered him to pay $3,647,629.39 in restitution to victims and forfeit $10,846,634.39.
Restitution is intended to compensate victims for losses, while forfeiture allows authorities to recover money or assets connected to criminal activity.
The Federal Bureau of Investigation assisted with the investigation. Assistant US Attorney Daniel G. Nessim prosecuted the case through the Southern District of New York’s Complex Frauds and Cybercrime Unit.
US Attorney Jamie McDonald said Amachukwu had believed he could operate safely from outside the country while targeting American victims.
His conviction and sentence demonstrate that investigators can pursue cybercrime and financial fraud across national borders.
For the customers whose records were stolen, the case also highlights the risks associated with unauthorised access to businesses that hold sensitive personal and financial information.