DOJ Charges 12 in $263M Crypto Theft Scheme

The U.S. Department of Justice (DOJ) has charged a dozen individuals, both American and foreign nationals, for their involvement in a sophisticated online racketeering conspiracy. This scheme resulted in the theft of $263 million worth of cryptocurrency, as detailed in a May 15 press release. The defendants, primarily aged between 18 and 21, face a range of charges including RICO conspiracy, conspiracy to commit wire fraud, money laundering, and obstruction of justice.

The alleged crime ring was led by 20-year-old Malone Lam, who orchestrated crypto-oriented cyberattacks to steal digital assets from online databases. The group was structured with various roles, including database hackers, organizers, target identifiers, callers, money launderers, and residential burglars who targeted hardware virtual currency wallets.

The stolen cryptocurrency was converted into fiat currency and used to fund an extravagant lifestyle. The defendants spent the illicit funds on nightclub services costing up to $500,000 per evening, luxury handbags valued in the tens of thousands of dollars, and high-end watches priced between $100,000 and $500,000. They also purchased luxury clothing, rental homes in Los Angeles, the Hamptons, and Miami, private jet rentals, a team of private security guards, and a fleet of at least 28 exotic cars ranging in value from $100,000 to $3.8 million.

To launder the stolen funds, the defendants used various mixers and exchanges, employing techniques such as ‘peel chains,’ pass-through wallets, and virtual private networks to conceal their identities. Prosecutors allege that Lam continued to collaborate with the enterprise to collect donations, obtain stolen crypto, and purchase luxury goods for his Miami-based girlfriend.

The potential prison sentences for the accused, if found guilty, will be determined by federal sentencing guidelines. The DOJ's action highlights the increasing scrutiny and enforcement efforts against cryptocurrency-related crimes, underscoring the need for robust regulatory frameworks and vigilant law enforcement to combat such activities.