Wednesday, July 28, 2021

Hushpuppi Pleads Guilty: Sentence Estimate? 11-14 Years

On July 27, 2021, Ramon Olorunwa Abbas, also known as Hushpuppi, decided that his best plan would be to avoid spending the rest of his life in prison was to plead guilty.  I've actually never seen a plea agreement with so much redacting, but we can still see SOME of what he is pleading to in the 29 page plea agreement that was posted today on PACER, the Public Access to Court Electronic Records.

"Beginning no later than or about January 18, 2019 through on or about June 9, 2020, defendant knowingly combined, agreed, and conspired with multiple other persons ("coconspirators") to conduct financial transactions into, within, and outside the United States involving property that represented the proceeds of wire fraud.   ... The coconspirators targeted multiple victims and laundered and/or attempted to launder funds fraudulently obtained, and attempted to be fraudulently obtained, through bank cyber-heists, business email compromise ("BEC") frauds, and other fraud schemes."

In particular, he admits that he helped launder the money:
  •  stolen from a bank in Malta (which we know is the Bank of Valetta from public news sources which was hacked by North Korean hackers) and 
  • the BEC funds stolen from a law firm in New York State, 
  • and the funds stolen from two companies located in the UK. (one of which was likely an English Premier League Club, from previous court filings.)

"Defendant admits" that he conspired to launder the funds, and that he knew they were funds that were the proceeds of fraud.  "Defendant also admits the truth of the allegations in Overt Acts 1 to 17."

Overt Acts 1 to 17

What were these Overt Acts 1 to 17?  These are from a previous court filing.  The first set, Overt Acts 1 - 12, all make reference to "UIUC-1" who we now believe is Ghaleb Alaumary, then age 37, from Mississauga, Canada.

Overt Act No. 1 - 18JAN2019 - ABBAS provides bank account information for a bank in Romania to be used to receive a 5 Million Euro wire transfer

Overt Act No. 2 - 18JAN2019 - ABBAS confirms via electronic message that the Romanian bank account is "for large amounts" 

Overt Act 3 - 18JAN2019 - ABBAS confirms that he will clear the funds from the Romanian account right away.

Overt Act 4 - 10FEB2019 - ABBAS provides another bank account, this time in Bulgaria, to receive an additional 5 million Euros.

Overt Act 5 - 12FEB2019 - ABBAS is informed the first 500,000 Euros have been deposited to Romania and confirms he will let his people know.

Overt Act 6 - 12FEB2019 - ABBAS confirms he is ready to receive more funds in the Romanian account. "Yes please"

Overt Act 7 - 12FEB2019 - ABBAS sends a screenshot of the Romanian Bank account to UICC-1, showing the IBAN numbers, Account numbers, and account balance for the account.

Overt Act 8 - 13FEB2019 - ABBAS sends a new screenshot of the Romanian Bank account to UICC-1.

Overt Act 9 - 10MAR2019 - UICC-1 asks for a bank account in Dubai that can receive "5m" saying "Brother I need it now or we will lose our chance pls."  ABBAS sends him the information for a Dubai bank account.

Overt Act 10 - 08MAY2019 - UICC-1 asks for an account that can "handle millions and not block" and Hushpuppi gives him the details of a bank account in Mexico.

Overt Act 11 - 13MAY2019 - UICC-1 tells ABBAS that the Mexican bank account will receive 100 Million pounds from an English Premier League Club and 200 Million pounds from a victim UK company and wants to know if he can proceed.  Abbas seems to express concern here, saying these accounts "cost a lot of money now to open." 

Overt Act 12 - 13MAY2019 - UICC-1 tells ABBAS that he has "10 more to do" after the Premier League Club job and says he will need to use each bank account for 2 contracts. 

Overt Act 13 - 15OCT2019 - Abbas "or a coconspirator" induce the Victim Law Firm to send $922,857.76 from their Quontic Bank account in New York to a Chase Account.

Overt Act 14 - 17OCT2019 - ABBAS sends a screenshot to UICC-1 showing a wire transfer of $396,050 from the Chase Account to a CIBC account in the name of UICC-2. 

Overt Act 15 - 17OCT2019 - UICC-2 was in California and informed by UICC-1 to look for the wire transfer to the CIBC Account

Overt Act 16 - 17OCT2019 - UICC-2 confirmed they had received the funds

Overt Act 17 - 17OCT2019 - UICC-1 told ABBAS that they $396,050 from the Chase account had been received into the CIBC account.

The Qatari Scam and the Watch

Hushpuppi also admits that he conspired to defraud a Qatari construction company that was seeking funds to build an international school.  Hushpuppi used the alias "Malik" and offered to help them open a bank account in the United States where a $15 Million loan could be deposited.  He arranged for a coconspirator to open a Wells Fargo bank account in Canoga Park, California, after creating a fictitious company with the Los Angeles County Registrar.  Then another coconspirator in Nigeria created a false "power of attorney" document and sent that information to Wells Fargo in December of 2019.  The victim was convinced that he needed to deposit funds into the account in order to secure the $15 Million loan.  However, after depositing $330,000, Hushpuppi and his colleagues stole the money, sending $230,000 to a Wells Fargo account belonging to a luxury watch seller and $100,000 to a Capital One bank account belonging to another co-conspirator.  

That's how Hushpuppi came to have a Richard Mille RM11-03 watch (co-created by Richard Mille Engineer Fabrice Namura and McLaren Automotive design director Rob Melville).  The watch was picked up in New York by one person, then flown from JFK Airport in New York to the UAE by another person, who delivered the watch to Hush on January 4, 2020, who immediately posted it on Instagram, calling it a New Year's present to himself.

Hushpuppi boasted on Instagram: "Quarter a million dollar watch as New Years gift to they self #RichardMille #RM1103 #EpainThem

As for the $100,000 that went to "Coconspirator D?"  Hush instructed them to send two cashier's checks one for $40,000 and one for $10,000 and use them to buy Hush a St. Kitts passport and a Nevis citizenship and passport.  He received his passport in February 2020.  The rest of the funds were converted to Naira.

Later, Hush and his coconspirators made another play at the Qatari businessman and convinced him that he had to pay "taxes" on the $15,000,000 imaginary loan in order to receive it.  To pay his taxes, the Qatari victim sent $299,983.58 into a bank account in Kenya. 

The Penalties of Crime

Altogether, in the Plea Agreement Hush agrees that he and his co-conspirators stole: 
  • $14,700,000 from a Foreign Financial Institution
  • $7,740,000 from UK victim companies
  • $922,857.76 from the New York Law Firm
  • and $809,983.58 from the Qatari victims.
"Defendant admits that all of the money laundering described above was sophisticated, extensive, and involved multiple persons." 

In the United States there are Sentencing Guidelines that are supposed to be used by the judge to ensure that sentences are standardized and consistent across different courts.  These sentencing guidelines are explained in the U.S. laws and each judge and prosecutor in Federal Courts is well aware of these guidelines.

The defendant agrees that these are fair interpretations of how to determine a sentence:
  • Underlying Offense Level:  7 Points 
  • Fraud Scheme outside the U.S. using Sophisticated Means:  +2 Points 
  • Conviction under 18 USC § 1956 (which is the law on Money Laundering):  + 2 Points 
  • Sophisticated Money Laundering: +2 Points 
  • Financial Losses between $9.5 Million and $25 Million:  +20 points 
Total Sentencing Guideline Points: 33 Points

According to the Sentencing Guidelines Table available on the United States Sentencing Commission website, a 33 Point offense with no previous criminal history SHOULD indicate a sentence of between 135 and 168 months, or 11 1/4 to 14 years.

Hushpuppi and his lawyer both understand this and have signed the plea agreement anyway.  While there may be extenuating circumstances lying behind some of the redacted pages, here is Hushpuppi's signature to these terms:

However, who is to say what else may be stated in the plea agreement behind all of the Redaction markings? Seven pages of the 29 page document look like this!  

For comparison, Ghaleb Alaumary, in many ways the man who HushPuppi was working for, pled guilty to his crimes in November 17, 2020.  The sentencing guidelines were similar, however Alaumary received a stiffer penalty for the amount of money stolen.  He has not yet been sentenced, but under the sentencing guidelines, Alaumary has a "35 offense level" which makes the recommendation 14 to 17.5 years in prison.  Alaumary had previous criminal convictions, however those were in Canada, and I am unsure whether they would alter the sentencing guidelines in a U.S. court.

Alaumary's Guilty Plea Sentencing Guidelines calculation

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