On June 10, 2020, the two men were arrested in Dubai, United Arab Emirates, for extensive international online scams and flown to the United States to face separate trials.
Hushpuppi, who initially pleaded not guilty, changed his plea to guilty in April 2021, just before the start of a full-fledged trial. The US District Court for the Central District of California, where prosecutors charged him, sentenced him to 11 years in prison and ordered him to pay $1.7 million in restitution in November 2022.
Woodberry, accused of defrauding a US company of approximately $188,000, maintained his innocence for over two years as well. According to court documents obtained by PREMIUM TIMES, he made a U-turn and pleaded guilty to one count of wire fraud during a change of plea hearing at the US District Court for Northern Illinois this April.
In a ruling issued on April 6, the judge, Robert Gettleman, accepted the defendant’s change of plea.
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He set July 11 for sentencing after accepting Woodberry’s plea agreement with US prosecutors.
The judge referred the case to the Probation Department for a pre-sentence investigation and report, which would help him decide what sentence to impose.
He gave the US government 60 days before the sentencing date to provide a list of victims and their full current contact information to the Probation Office and the courtroom deputy in order to obtain the court’s order of restitution.
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“Any amounts subject to restitution shall be included on the list.” If the government is unable to provide the complete victim list 60 days before sentencing, they must file a motion requesting an extension of time to compile the information, according to the judge.
Woodberry and Fraud
In pleading guilty, Woodberry admitted to defrauding a New York company known as “Victim Company B” of nearly $188,000 through online scams involving business email compromise schemes.
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According to US prosecutors, beginning in January 2019, Mr Ponle and his co-conspirators “were engaged in a business email compromise scheme targeting Victim Company B and other companies, which resulted in a fraudulent wire of approximately $188,191.50 to a bank account.”
How fraudulent plot was hatched
According to the court filing, the scheme began on or before January 16, 2019, when one or more of Mr Ponle’s co-schemers gained unauthorised access to Victim Company B’s email account.
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According to the prosecutors, they hacked into the email account by obtaining the account credentials fraudulently.
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“Once access to this email account (“Victim Company B Email Account”) was obtained, the co-schemers changed certain security settings in the email account to conceal their activity from the actual email account user,” prosecutors wrote in Woodberry’s plea agreement.
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Immediately after, on January 16, 2019, an email was sent from the compromised Victim Company B’s email account to another email account of the company requesting a $188,191.50 payment be made to Victim Company B’s supplier.
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According to prosecutors, the email contained instructions for the money to be wire transferred to a bank account set up by Whiteberry.
“PONLE was aware that he had no legal claim to the funds and that the email was intended to defraud Victim Company B into paying money owed to the supplier to an account controlled by PONLE rather than the supplier.”
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“Approximately $188,191.50 was sent to the 8208 account as a result of the email.” “PONLE acknowledges that the wire was processed through the Federal Reserve System and sent from an account held in New York, New York to an account ending in Nashville, Tennessee,” according to the plea agreement.
According to the document, Mr Ponle received a message from Individual B on January 17, 2019, informing him that “the money is in.”
Individual B, at Woodberry’s request, converted approximately $119,000 of the proceeds of the fraudulent wire transfer to Bitcoin. “Individual B then sent the Bitcoin to PONLE’s Bitcoin wallet.”
How a bogus bank account was created
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According to the plea agreement, Woodberry established the fraudulent bank account from which he received the proceeds of the fraud nine days before requesting payment through Victim Company B’s compromised email account on January 16, 2019.
According to the prosecutors, on 7 January 2019, Mr Ponle, using the alias “Mark Kain,” sent a message from outside the United States to “Individual B” asking Individual B to open a bank account in the name of a Victim Company B supplier.
Individual B was allegedly told by Woodberry to “set up a separate business account just to receive the money.”
Individual B opened an account under the name “[Individual B] d/b/a [Victim Company B supplier]” at Mr Ponle’s request and sent the account number, which ended in 8208, and routing number to him, according to the court filing.
On January 10, 2019, he notified Individual B that the wire to the Victim Company B supplier account would be “$188K.”
The prosecutor is requesting that the court order the defendant to pay full restitution in the amount owed at the time of sentencing.
Hushpuppi, Woodberry’s ally, was described by the US government last year as “a prolific international fraudster who conspired to launder tens of millions of dollars through a series of online scams.”
Hushpupi, according to the government, “flaunted his luxurious, crime-funded lifestyle on social media.”
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His Instagram account, which he used to flaunt his expensive lifestyle, has since been deactivated at the request of the US government.
