A Georgia man was sentenced to 10 years in prison after being convicted of money laundering and conspiracy in connection with a digital fraud network that included business email compromise (BEC) attacks, romance scams, and healthcare benefits frauds, the U.S. Department of Justice announced.
Malachi Mullings, 31, from Sandy Springs scammed over $4.5 million from his victims and laundered the proceeds through 20 bank accounts opened in the name of a shell company, The Mullings Group LLC.
The scams relied on a variety of common techniques used in BEC scams and targeted elderly individuals of a health care benefit program, private companies and romance scam victims.
“In one instance, Mullings laundered $310,000 that was fraudulently diverted from a state Medicaid program and had been intended as reimbursement for a hospital,” the Justice Department said. In another instance, Mullings was able to get $260,000 from a romance scam, which he used to buy a Ferrari.
The sentencing of Mullings comes after he pleaded guilty in January 2023 to one count of conspiracy to commit money laundering and seven counts of various money laundering offenses.
Mullings was first charged in February 2022, along with nine others from multiple states across the country. They were all charged in connection with multiple business email compromise, money laundering and wire fraud schemes that targeted Medicare, state Medicaid programs, private health insurers, and numerous other victims, which resulted in more than $11.1 million in total losses.
“These defendants defrauded numerous individuals, companies, and federal programs, resulting in millions of dollars in financial losses to vital federal programs meant to provide assistance to those in need,” said U.S. Attorney Ryan Buchanan, at the time.
“Millions of American citizens rely on Medicaid, Medicare, and other health care systems for their health care needs. These subjects utilized complex financial schemes, such as BECs and money laundering, to defraud and undermine health care systems across the United States,” said Luis Quesada, who at the time was Assistant Director of the FBI’s Criminal Investigative Division.
“Elder fraud and romance fraud schemes utilized by the subjects often target our most vulnerable citizens and the FBI is committed to pursuing justice for those who were victimized by these schemes.”
Together, the fraud schemes of these 10 scammers deceived five state Medicaid programs, two Medicare Administrative Contractors, and two private health insurers, who made payments to them and their co-conspirators instead of depositing the reimbursement payments into bank accounts belonging to the hospitals.
Elder Fraud Growing: FBI Data
Elder fraud complaints increased by 14% in 2023, according to a recently released report by the FBI’s Internet Crime Complaint Center (IC3). The associated losses reported by those over the age of 60 topped at $3.4 billion, an almost 11% increase in reported losses from 2022.
While tech support scams were the most widely reported kind of elder fraud, personal data breaches, confidence and romance scams, non-payment or non-delivery scams, and investment scams rounded out the top five most common types of elder fraud reported to IC3 last year.
Investment scams were the costliest elder fraud in 2023 and cost victims more than $1.2 billion in losses last year. Tech support scams, business email compromise scams, confidence and romance scams, government impersonation scams, and personal data breaches, all respectively cost victims hundreds of millions of dollars in 2023.
On the state level, Florida ranked second in the country for the number of complaints and reported losses.
“It’s disturbing to hear the stories of financial hardship these schemes create,” said FBI Tampa Field Special Agent Rodney Crawford.
“Combatting the financial exploitation of those over 60 years of age continues to be a priority of the FBI,” said FBI Assistant Director Michael Nordwall, who leads the Bureau’s Criminal Investigative Division. “Along with our partners, we continually work to aid victims and to identify and investigate the individuals and criminal organizations that perpetrate these schemes and target the elderly.”
The agency regards elderly fraud as a more insidious threat than the report shows. Many of these crimes likely go unreported, as “only about half” of the fraud scam complaints that get through to IC3 include IC3 data, the report said.
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