Blue Cross of Minnesota snagged in multimillion-dollar Nigerian fraud scheme

Two Nigerian nationals have been indicted in what prosecutors describe as a fraudulent business email compromise scheme that targeted several Minnesota-based health care companies including Blue Cross and Blue Shield of Minnesota.

According to an indictment filed last week, Eagan-based Blue Cross was lured into wrongly wiring nearly $8 million to bank accounts that were represented as belonging to Minneapolis-based Fairview Health Services.

Two other unidentified health insurers based in the Twin Cities also wired $2.8 million and $1.5 million, respectively.

“Defendants and their co-conspirators fraudulently induced Fairview Health vendors into making more than $13 million in payments to accounts controlled by defendants and their co-conspirators,” states the indictment filed Wednesday in the U.S. District Court of Minnesota.

U.S. Attorney Andrew Luger brought the indictment against Shodiya Babatunde, 43, and Jamui Ahmed, 41, who were identified in a news release as citizens and residents of Nigeria who remain fugitives from justice.

“Blue Cross was able to recoup most of the funds involved in this case and has taken additional measures to further strengthen our protections against deceptive financial practices,” the health insurer said in a prepared statement.

“We worked with the banks involved to reverse fraudulent transactions and recoup funds.”

Defendants created a fake “spoofed” internet domain that was designed to look like it was controlled by Fairview, the indictment states, while also creating email accounts that mimicked those of Fairview’s CEO, general counsel and a business analyst at the health system.

Fairview did not respond to requests for comment.

With the spoofed email accounts for executives, defendants allegedly carried out a “phishing” scheme in which they sent emails to Fairview employees to access an internet link and provide information such as names and passwords. With this information, Babatunde and Ahmed obtained access to Fairview’s Optum Pay account for collecting payments from health insurers, according to the indictment, and changed banking information on vendor accounts to direct funds that were meant for Fairview into unauthorized bank accounts.

“Defendants Babatunde and Ahmed also used their spoofed Fairview Health email accounts to send emails purporting to be from Fairview Health executives to Fairview Health vendors including Blue Cross [and] Blue Shield of Minnesota” and two other insurers, the indictment states.

One of these other insurers is a nonprofit based in Minneapolis, according to the filing, while the other is a nonprofit with headquarters in Bloomington.

On or about July 29, 2020, Blue Cross of Minnesota made approximately 18 wire transfers totaling nearly $8 million, the indictment says, to an account controlled by the defendants and their co-conspirators.

This case is the result of an investigation conducted by the FBI, according to the news release. It says an indictment is merely an allegation and defendants are presumed innocent until proven guilty beyond a reasonable doubt in court.