Fourth Circuit Clarifies That IPv4 Addresses Are “Property” Under the Federal Fraud Statutes and Sets Harmless-Error Standard for Rule 11 Immigration Warnings to Naturalized Citizens

Introduction

United States v. MICFO, LLC concerns a sprawling scheme by Amir Golestan—founder and chief executive of Micfo, LLC—to obtain and resell coveted IPv4 Internet Protocol addresses through fraudulent applications to the American Registry for Internet Numbers (ARIN). A Charleston federal grand jury indicted both Golestan and the corporation on 20 counts of wire fraud (18 U.S.C. § 1343).

After a dramatic mid-trial plea change, Golestan sought to withdraw the pleas on three fronts: (1) Ciminelli had meanwhile invalidated the Second Circuit’s “right-to-control” fraud theory, (2) the district judge failed to give the immigration warning now required by Fed. R. Crim. P. 11(b)(1)(O), and (3) Golestan allegedly lacked authority to plead for Micfo. The district court denied withdrawal and imposed sentence; Golestan and Micfo appealed. In a published opinion by Judge Berner, the Fourth Circuit affirmed.

The judgment squarely establishes two doctrinal points of first impression for the circuit: (i) IPv4 address blocks constitute “property” for purposes of the federal mail and wire fraud statutes; and (ii) the omission of a Rule 11(b)(1)(O) immigration warning with respect to a naturalized U.S. citizen is error, but the error is harmless unless the record shows a reasonable probability that the warning would have altered the plea decision.

Summary of the Judgment

Property Element: The “right to assign, administer, monitor, and regulate” IPv4 addresses is a traditional property interest, placing Golestan’s conduct within § 1343. Ciminelli did not upend this theory because the prosecution was not predicated on the “right-to-control” doctrine.
Rule 11 Immigration Warning: A district court must deliver the Rule 11(b)(1)(O) warning in every plea colloquy, but the failure to do so was harmless here. Golestan was already a U.S. citizen, and nothing in the record suggested that learning about potential denaturalization would have changed his tactical calculus.
Plea Withdrawal: Applying the six-factor Moore test, the court held that Golestan and Micfo lacked a “fair and just reason” to withdraw. The 17-month delay, the absence of credible evidence of innocence, and the strength of the government's proof sealed the fate of the motion.
Ineffective Assistance/Corporate Authority: The record was undeveloped for a direct appeal of ineffective assistance, and Golestan’s sworn statement of managerial authority sufficed to bind Micfo.

Detailed Analysis

1. Precedents Cited and Their Influence

Ciminelli v. United States, 598 U.S. 306 (2023) – Abolished the Second Circuit’s “right-to-control” theory. The Fourth Circuit distinguished Ciminelli, reasoning that the United States charged Golestan with obtaining IP addresses—tangible economic interests—rather than merely deceiving ARIN out of information.
McNally (1987), Carpenter (1987), Pasquantino (2005) – Baseline cases affirming that fraud statutes guard traditional property interests, both tangible and intangible. The panel invoked them to frame IP addresses as alienable assets.
Cleveland v. United States, 531 U.S. 12 (2000) – Stands for the proposition that purely regulatory interests are not “property.” The court contrasted Cleveland with ARIN’s capacity to sell or transfer IPv4 blocks.
Padilla v. Kentucky, 559 U.S. 356 (2010) – Established counsel’s Sixth-Amendment duty to warn noncitizen clients of deportation risk. The Fourth Circuit imported Padilla to the Rule 11 context but limited relief through harmless-error analysis.
United States v. Moore, 931 F.2d 245 (4th Cir. 1991) – Articulated six factors for plea withdrawal. Those factors structured the district court’s and appellate court’s reasoning.
United States v. Adler, 186 F.3d 574 (4th Cir. 1999) – Previous circuit authority defining property as something “assignable, tradable, or alienable.” Critical for slotting IPv4 addresses within § 1343.
United States v. Kousisis, 145 S. Ct. 1382 (2025) – Recent Supreme Court statement that ordinary fraudulent-inducement theories remain viable post-Ciminelli; cited by the panel to buttress its reading.

2. The Court’s Legal Reasoning

A. IPv4 Addresses as Property

The panel reasoned that an IPv4 block is scarce, transferrable, market-valued, and subject to contract (Registration Services Agreements). Citing Adler, the court reiterated that the touchstone is whether the victim has an alienable right that can be bought or sold. Because ARIN could assign, sell, or transfer those addresses on the secondary market, Golestan’s misappropriation deprived ARIN of a cognizable property interest.

B. Distinguishing Ciminelli

Unlike the defendants in Ciminelli, who only deceived their victim into making a sub-optimal business decision, Golestan physically diverted the asset (the IP addresses) for resale, pocketing \$3.3 million. The Fourth Circuit labeled this a “traditional fraudulent-inducement theory,” expressly preserved by the Supreme Court in Kousisis.

C. Rule 11(b)(1)(O) Error and Harmless-Error Framework

Rule 11 now commands judges to warn defendants that “a defendant who is not a United States citizen may be removed … denied citizenship, and denied admission.” The court held that the rule technically applies to naturalized citizens as well, because denaturalization is a potential consequence. Skipping the warning is therefore “error.” But the panel borrowed from Dominguez Benitez: to show harmfulness, a defendant must demonstrate a “reasonable probability” that the additional information would have led him to persist in trial. On the record—overwhelming evidence, mid-trial capitulation, and no demonstrable surprise—the error was harmless.

D. Plea Withdrawal – Applying the Moore Factors

Knowing & Voluntary: Thorough colloquy; Golestan affirmed understanding.
Legal Innocence: Ciminelli does not negate guilt; no new exculpatory facts.
Delay: Seventeen months is “substantial,” militating against withdrawal.
Counsel: Both defendants acknowledged competent representation.
Prejudice / Waste: With factors 1–4 against defendants, court need not reach 5–6.

E. Ineffective Assistance & Corporate Authority

Because the record lacked detailed evidence of immigration advice (or lack thereof), the panel applied the customary rule that ineffective-assistance claims should proceed via 28 U.S.C. § 2255. For Micfo, the judge relied on Golestan’s sworn testimony that bankruptcy proceedings had elected him manager, satisfying Fed. R. Crim. P. 43(b)(1)’s representation requirement for organizational defendants.

3. Impact on Future Litigation

Cyber-property prosecutions: By expressly labeling IPv4 addresses as property, the Fourth Circuit equips prosecutors to pursue future fraud, theft, and cyber-hacking cases involving address blocks, domain names, NFTs, and other digital assets.
Wire/Mail Fraud Doctrine Post-Ciminelli: The opinion draws a clear line: depriving a victim of the asset itself is valid; depriving the victim of “potentially valuable economic information” is not. District courts within the circuit will now scrutinize indictments accordingly.
Plea Colloquy Practice: Judges in the Fourth Circuit are on notice that the safest course is to recite the Rule 11(b)(1)(O) warning in every plea colloquy—citizen or not—to forestall error. Defense counsel representing naturalized citizens must give denaturalization advice to avoid Padilla problems.
Corporate Criminal Procedure: The decision re-affirms that a single manager or authorized agent can bind a corporation so long as counsel is present, streamlining organizational guilty pleas.

Complex Concepts Simplified

IPv4 vs. IPv6: Think of IP addresses as phone numbers for computers; IPv4 is the older, shorter number in scarce supply, making it market-valuable.
ARIN: A nonprofit registrar that functions like a DMV for U.S./Canadian IP addresses—issuing, tracking, and recording ownership.
Right-to-Control Theory: A (now defunct) fraud theory saying it is illegal to deny a victim “valuable economic information” even if no money/property changed hands.
Rule 11(b)(1)(O): Part of the federal rules governing guilty pleas, requiring the judge to warn about deportation or denial of citizenship.
Denaturalization: Revocation of citizenship obtained through naturalization, usually for concealed criminal conduct or fraud.
Moore Factors: Six questions courts ask when a defendant tries to take back (withdraw) a guilty plea.

Conclusion

United States v. MICFO, LLC cements two significant propositions in Fourth Circuit jurisprudence: first, that IPv4 address blocks are indeed “property” within the meaning of the federal fraud statutes; second, that although a Rule 11 immigration warning is mandatory, its omission with respect to a naturalized citizen will be deemed harmless unless the defendant can plausibly show it would have altered his plea choice.

The ruling provides clarity at the intersection of cyber-assets and criminal fraud, guides district judges and practitioners on best practices for plea colloquies, and stakes out the circuit’s post-Ciminelli landscape. Prosecutors can confidently charge schemes involving digital assets; defense counsel must anticipate property-based fraud theories even when intangible; and courts must give, but can sometimes salvage, Rule 11 warnings. In short, the opinion offers a forward-looking template for addressing twenty-first-century property crimes and the procedural rigor of modern federal plea practice.