The American Registry for Internet Numbers, Ltd. (ARIN) has won a legal case against an elaborate multi-year scheme to defraud the Internet community of approximately 735,000 IPv4 addresses, the organization has revealed. While the specifics of the findings are not released, John Curran, ARIN President and CEO said the fraud was detected as a result of an internal due diligence process.

ARIN is a nonprofit member-based organization responsible for distributing Internet number resources in the US, Canada, and parts of the Caribbean. The emerging IPv4 address transfer market and increasing demand have resulted in more attempts to obtain IPv4 addresses fraudulently.

— This is the first arbitration ever brought under an ARIN Registration Services Agreement, and related proceedings in the U.S. District Court for the Eastern District of Virginia. ARIN was able to prove an intricate scheme to fraudulently obtained resources that included many falsely notarized officer attestations sent to ARIN. "A company in South Carolina obtained and utilized 11 shelf companies across the United States, and intentionally created false aliases purporting to be officers of those companies, to induce ARIN into issuing the fraudulently sought IPv4 resources and approving related transfers and reassignments of these addresses. The defrauding party was monetizing the assets obtained in the transfer market, and obtained resources under ARIN's waiting list process." (ARIN Press Release)

— The defrauding entity adopted an aggressive posture after ARIN requested that it produce certain documents and explain its conduct. The suspected party filed a motion for a Temporary Restraining Order and Preliminary Injunction against ARIN in U.S. District Court, and demanded a hearing the following morning (the Friday just before Christmas). "The aggressive posture was taken after ARIN indicated its intent to revoke addresses, while permitting defrauding entity to renumber to allow existing bona fide customers not to have service interrupted," ARIN’s General Counsel told CircleID. "The litigation was filed against ARIN to seek an injunction to stop ARIN from revoking and enter arbitration. Some addresses were transferred for money prior to that demand, others were pending transfer and were never transferred due to ARIN investigation."

— Some fraudulently obtained addresses were transferred to third parties; however ARIN made no effort to pursue the parties that received the completed transfer, ARIN’s General Counsel told CircleID. The reason being: "(a) addressed were in another RIR service region (e.g. RIPE NCC and APNIC) and (b) ARIN did not see any evidence they knew of or participated in the fraud. In other words, they appeared to be bona fide 3rd parties."

— ARIN obtained the arbitration award on May 1, 2019, which included revocation of all resources issued pursuant to fraud and $350,000 to ARIN for its legal fees.

— UPDATE May 15, 2019: "Charleston Man and Business Indicted in Federal Court in Over $9M Fraud" – United States Department of Justice issues a statement annoucing Amir Golestan, 36, of Charleston, and Micfo, LLC, were charged in federal court in a twenty-count indictment. The indictment charges twenty counts of wire fraud, with each count punishable by up to 20 years imprisonment.