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The game with IP addresses brought the entrepreneur fame and years behind bars.
Amir Golestan, 40, CEO of the Charleston, South Carolina-based IT company Micfo LLC, was sentenced to 5 years in prison on charges of fraud involving electronic communications. The verdict comes almost two years after Golestan pleaded guilty to using a complex network of fictitious companies to obtain more than 735,000 Internet addresses from the American Registry for Internet Numbers (ARIN), a nonprofit organization that oversees the issuance of IP addresses in the United States, Canada and parts of the Caribbean. islands.
In 2018, ARIN sued Golestan and Micfo LLC, claiming that they obtained hundreds of thousands of IP addresses under false pretenses. ARIN and Micfo settled the dispute through arbitration, and Micfo returned most of the addresses that the company had not yet sold.
The ARIN case has attracted the attention of South Carolina federal prosecutors. In May 2019, Golestan was charged with criminal fraud involving the use of electronic communications. The prosecution claimed that he created a network of fictitious companies and false identities to prevent ARIN from recognizing that all addresses go to the same buyer.
Prosecutors showed that each of the fictitious companies produced notarized powers of attorney in the names of non-existent people. As a result, Golestan was charged with 20 counts of fraud — one for each payment made by fictitious companies.
At first, Golestan tried to fight the charges, but on the second day of the trial in November 2021, he changed his mind and pleaded guilty. The prosecutor's office estimated the cost of IP addresses between $10 million and $14 million.
ARIN said in a statement that the 5-year sentence imposed by the South Carolina court contains "an important warning to other parties contemplating fraudulent schemes to obtain or transfer Internet resources."
By 2013, a number of Micfo clients had come to the attention of Spamhaus, a company that helps many large organizations counteract email spam. Shortly after Spamhaus started blocking Micfo's IP address ranges, Micfo changed direction and began reselling IP addresses primarily to VPN service providers.
In an interview with KrebsOnSecurity in 2020, Golestan stated that at one point Micfo was "responsible for mediating" about 40% of the IP addresses used by the world's largest VPN providers. Golestan then explained that the creation of fictitious companies was necessary to ensure that organizations such as Spamhaus, in the future, "did not interfere in his business."
Less than 4 billion billion IPv4 addresses are available for use, but most of them have already been allocated. The global decline in available IP addresses has turned them into a commodity, and the cost of each IPv4 address can reach from $15 to $25 on the open market.
The US Department of Justice states that Golestan will spend 5 years in prison, after which he will spend 2 years under judicial supervision. Micfo's CEO was also ordered to pay nearly $77,000 to ARIN for their assistance to federal prosecutors.
Amir Golestan, 40, CEO of the Charleston, South Carolina-based IT company Micfo LLC, was sentenced to 5 years in prison on charges of fraud involving electronic communications. The verdict comes almost two years after Golestan pleaded guilty to using a complex network of fictitious companies to obtain more than 735,000 Internet addresses from the American Registry for Internet Numbers (ARIN), a nonprofit organization that oversees the issuance of IP addresses in the United States, Canada and parts of the Caribbean. islands.
In 2018, ARIN sued Golestan and Micfo LLC, claiming that they obtained hundreds of thousands of IP addresses under false pretenses. ARIN and Micfo settled the dispute through arbitration, and Micfo returned most of the addresses that the company had not yet sold.
The ARIN case has attracted the attention of South Carolina federal prosecutors. In May 2019, Golestan was charged with criminal fraud involving the use of electronic communications. The prosecution claimed that he created a network of fictitious companies and false identities to prevent ARIN from recognizing that all addresses go to the same buyer.
Prosecutors showed that each of the fictitious companies produced notarized powers of attorney in the names of non-existent people. As a result, Golestan was charged with 20 counts of fraud — one for each payment made by fictitious companies.
At first, Golestan tried to fight the charges, but on the second day of the trial in November 2021, he changed his mind and pleaded guilty. The prosecutor's office estimated the cost of IP addresses between $10 million and $14 million.
ARIN said in a statement that the 5-year sentence imposed by the South Carolina court contains "an important warning to other parties contemplating fraudulent schemes to obtain or transfer Internet resources."
By 2013, a number of Micfo clients had come to the attention of Spamhaus, a company that helps many large organizations counteract email spam. Shortly after Spamhaus started blocking Micfo's IP address ranges, Micfo changed direction and began reselling IP addresses primarily to VPN service providers.
In an interview with KrebsOnSecurity in 2020, Golestan stated that at one point Micfo was "responsible for mediating" about 40% of the IP addresses used by the world's largest VPN providers. Golestan then explained that the creation of fictitious companies was necessary to ensure that organizations such as Spamhaus, in the future, "did not interfere in his business."
Less than 4 billion billion IPv4 addresses are available for use, but most of them have already been allocated. The global decline in available IP addresses has turned them into a commodity, and the cost of each IPv4 address can reach from $15 to $25 on the open market.
The US Department of Justice states that Golestan will spend 5 years in prison, after which he will spend 2 years under judicial supervision. Micfo's CEO was also ordered to pay nearly $77,000 to ARIN for their assistance to federal prosecutors.
