American living in Brazil admits to business email compromise scheme
For Immediate Release
U.S. Attorney's Office, Southern District of Texas
HOUSTON – A 58-year-old U.S. citizen has pleaded guilty to wire fraud, announced U.S. Attorney Alamdar S. Hamdani.
Michael Knighten aka Michael Sabatine had been living in Brazil but was extradited in June 2022.
Knighten admitted he participated in a business email compromise (BEC) scheme which defrauded a number of companies including several in Houston. Using his alias, he sent fraudulent emails requesting changes to payment information on invoices due to vendors. This included where payments should be made, one of which was to a bank in Las Vegas. However, the accounts were not the vendor’s actual bank account.
He had fraudulently used the name and passport of a relative to contact the owner of this bank account in Las Vegas by email. Knighten had him set up a company and accept deposits and make disbursements until he could come to Las Vegas and set up his own account.
Knighten also used his alias in emails to Bennu Oil and Gas Company in Houston beginning in March 2014. He fraudulently represented himself to be the financial director of Ceona Offshore and requested payments due to Ceona from Bennu. In May 2014, he sent additional emails to Bennu and caused the company to send a wire transfer in the amount of $651,125, to a bank account in Portugal.
After making this payment, Bennu uncovered the fraud and was able to freeze some of the funds, but still suffered a loss of $224,000.
As part of his plea, Knighten admitted the companies he defrauded suffered total losses of over $3 million.
“Knighton defrauded several companies, large and small, out of millions of dollars using business email compromise schemes,” said Hamdani. “BEC scams have become a serious problem, targeting not just companies but individuals, often from the comfort of an overseas hideaway. Despite that, we will not rest until we bring scammers, like Knighton, to justice, no matter where they reside. Note that criminals will continue to use phishing emails to try to obtain important information which can lead to serious financial losses. So, stay alert!”
U.S. District Judge Lee H. Rosenthal will impose sentencing Aug. 31. At that time, Knighten faces up to 20 years in prison and a possible $250,000 maximum fine.
Knighten has been and will remain in custody pending that hearing.
The FBI conducted the investigation. Assistant U.S. Attorney John Braddock is prosecuting the case.
Updated May 15, 2023