An alleged elaborate scheme to fraudulently obtain and monetise increasingly scare internet protocol version 4 address allocations from the American Registry of Internet Numbers (ARIN) has landed a man in South Carolina and the cloud provider he runs in a US federal court.
Amir Golestan, 36, of Charleston, South Carolina, and his company Micfo set up 11 shelf companies that purported to be individual businesses, United States prosecutors said.
Several address blocks were resold to spammers, and Micfo was listed in the Spamhaus Registry of Known Spam Operations.
The companies had fake web sites and false officers, and were used by Golestan and Micfo to obtain IPv4 allocations from ARIN, starting in 2014.
ARIN cottoned onto the elaborate scheme in 2018, and applied for arbitration to have the IP addresses returned.
In total, Golestan and Micfo obtained rights to 757,760 IPv4 addresses with a market value between US$9,850,880 and 14,397,440, prosecutors said.
The arbitrator found for ARIN and ordered the IP addresses to be returned as they had been fraudulently obtained by Golestan and Micfo.
As part of the order, Golestan and Micfo were ordered to pay US$350,000 in costs by the arbitrator.
ARIN hailed the arbitration order, the first ever under its Registration Services Agreement as very favourable with its chief executive John Curran warning that fraud will not be tolerated.
Due to increasing demand and an emergent market for transfers, ARIN has seen more attempts at fraudulently obtaining IPv4 addresses.
The Federal Bureau of Investigation took Golestan to court for the IP address fraud, where he was charged with twenty counts of wire fraud, each of which carries a maximum punishment of 20 years in prison.
Golestan says he started Micfo from his bedroom in Dubai at the age of 16, turning it into a global infrastructure as a service cloud computing provider.
The company now claims to have 55 data centres around the world, including one in Sydney.