A multi-national cryptocurrency fraud ring that allegedly defrauded victims worldwide over a quarter of a billion dollars has come under increased scrutiny from the US Department of Justice (DOJ).
The case now has 27 defendants in total after the charges were filed under the Racketeer Influenced and Corrupt Organisations Act (RICO). Malone Lam, a 20-year-old who is at the centre of the investigation, is charged with planning one of the biggest individual cryptocurrency thefts in American history.
Lam is suspected of stealing over 4,100 Bitcoin, or about US $230 million, from a single victim in Washington, DC.
Lam, who went by multiple internet aliases such as "Anne Hathaway" and "$$$," is accused of collaborating with Jeandiel Serrano (also known as "VersaceGod") to carry out a complex social engineering attack on a guy identified as an extremely wealthy early crypto investor.
After bombarding the victim with phoney Google security warnings warning of unauthorised login attempts, Lam and Serrano are said to have called the guy and impersonated Google support professionals. Investigators say they misled the victim into revealing multi-factor authentication codes, allowing them to access his accounts and steal a fortune in cryptocurrency.
Following the theft, Lam and Serrano are accused of laundering the stolen funds in a variety of ways and using their wealth to fund a lavish lifestyle. Lam is claimed to have bought at least 31 expensive cars, including custom Lamborghinis, Ferraris, Porsches, Mercedes G Waggons, a Rolls-Royce, and a McClaren, some of which were worth more than $3 million. He also rented many high-end residences in Los Angeles and Miami, some for up to $68,000 per month, and spent hundreds of thousands of dollars on nightclub trips.
Now, the DOJ has revealed that more defendants have been indicted in connection with the racketeering scheme. According to court documents, the defendants, who met through online gaming platforms, performed a variety of roles, including database hackers, organisers, target identifiers, callers, money launderers, and burglars who physically broke into victims' homes to steal their hardware cryptocurrency wallets.
According to court documents, one of the defendants, 21-year-old Joel Cortes of Laguna Niguel, California, assisted members of the gang by "changing stolen virtual currency into fiat currency and shipping the currency across the United States, hidden in squishmallow stuffed animals, each containing approximately $25,000 apiece.”
When it came to drawing attention to themselves, other gang members allegedly adopted Lam's strategy by, among other things, renting private jets, buying luxury handbags valued at tens of thousands of dollars to give to young women they deemed attractive, and paying up to US $500,000 per night for nightclub services.
Lam is accused of continuing to engage with the group even after his arrest in September 2024, assisting them in stealing cryptocurrencies and arranging for his claimed associates to purchase luxury Hermes Birkin handbags for his girlfriend in Miami, Florida.
This case serves as a stark reminder of the ever-increasing confluence of cyber fraud and psychology. While the crypto technology is new, the scam is old as time: acquire trust, play the long game, and walk away with the loot.
