The Chicago Syndicate: Crypto

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Showing posts with label Crypto. Show all posts
Showing posts with label Crypto. Show all posts

Thursday, December 01, 2022

Operation Crypto Runner Targets Networks Laundering Money Stolen from Fraud Victims via Cryptocurrency #Crypto #Cryptocurrency #Bitcoin #FTX

According to unsealed court documents, 21 individuals have been charged for their roles in transnational money laundering networks, including those that laundered millions of dollars stolen from United States fraud victims through romance scams, business email compromises, technical support schemes, and other fraud schemes.

U.S. Attorney Brit Featherston of the Eastern District of Texas, William Smarr, Special Agent in Charge of the U.S. Secret Service’s (USSS) Dallas Field Office, and Inspector in Charge Thomas Noyes of the U.S. Postal Inspection Service announced Operation Crypto Runner, an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation into transnational cryptocurrency money laundering networks that facilitate the movement of fraud proceeds from victims in the United States to foreign criminal organizations.

“These defendants orchestrated highly organized and sophisticated schemes to launder fraud proceeds through cryptocurrency,” said U.S. Attorney Brit Featherston. “Today’s announcement sends a clear message that money laundering networks that service fraud schemes targeting American victims, especially the elderly, will not be tolerated, and those operating such networks will be held accountable. By acting as domestic money launderers for foreign co-conspirators, these defendants played indispensable roles that allowed foreign actors to reach from overseas to target victims in communities across the United States.”

“Today’s announcement demonstrates the investigative capabilities of the Secret Service and highlights the success of our collaborative efforts through Operation Crypto Runner to dismantle and disrupt transnational money laundering networks,” said William Smarr, Special Agent in Charge of the U.S. Secret Service’s Dallas Field Office. “These arrests are just the beginning. We are committed to bringing each of the remaining perpetrators to justice.”

“These cases stem from a multi-year operation initiated in the Eastern District of Texas by Postal Inspectors and the Secret Service,” said Thomas Noyes, Inspector in Charge of the Postal Inspection Service’s Fort Worth Division. “Cybercrime has become an all-too-common way for foreign criminal actors to prey on Americans. Interagency cooperation is essential to be effective in disrupting organized crime. I commend the exceptional work of our law enforcement partners and emphasize our agency’s ongoing commitment to combatting fraud and money laundering schemes.”

To date, the Operation has disrupted more than $300 million in annual money laundering transactions, seized and forfeited millions in cash and cryptocurrency, and identified thousands of victims.

Some of the schemes alleged in the indictments include the following:

  • U.S. v. Zenobia Walker, 6:20-CR-91-JCB/KNM (11/19/2020)
    Zenobia Walker, 65, of Temple Hills, Maryland, pleaded guilty on January 6, 2022, to conspiracy to operate an unlicensed money transmitting business and was sentenced to 18 months in federal prison on November 2, 2022. Walker was involved in a scheme in which she received cash by mail, money orders, wire transfers, and cashier’s checks obtained from victims of romance scams and from victims of other fraud schemes. The funds were deposited into Walker’s personal bank accounts and withdrawn and deposited into other bank accounts in order to exchange the funds for cryptocurrency. Between December 2019 and September 2020, Walker exchanged $308,800.00 for cryptocurrency on behalf of her foreign co-conspirators.

  • U.S. v. Tulasidas Konda, 6:20-CR-31-JDK/JDL (4/23/2021)
    Tulasidas Konda, 57, of Amelia Court House, Virginia, pleaded guilty on May 5, 2021, to conspiracy to commit money laundering. Konda led and organized a multi-year money laundering conspiracy involving the laundering of criminal proceeds derived from various scams. Konda’s organization opened bank accounts and mailboxes that were used to receive and transact victim funds, received the victim funds, engaged in subsequent financial transactions, routinely structured in amounts under $10,000 in an effort to evade reporting requirements and to conceal the nature and source of the criminal proceeds, and moved the criminal proceeds to foreign co-conspirators. Konda’s organization routinely exchanged the criminal proceeds for cryptocurrency and directed the cryptocurrency to wallets under the control of their foreign co-conspirators. In the course of the operation, Konda was personally responsible for laundering $4,172,061.58 in criminal proceeds.

  • U.S. v. Deependra Bhusal, 6:21-CR-32-JDK/JDL (4/23/2021)
    Deependra Bhusal, 46, of Irving, Texas, pleaded guilty on April 30, 2021, to conspiracy to commit money laundering and was sentenced to 46 months in federal prison on April 6, 2022. Bhusal was a key member of the Konda Organization. In the course of the operation, Bhusal was personally responsible for laundering $1,437,358.99 in criminal proceeds.

  • U.S. v. Lois Boyd, et al., 6:21-CR-43-JDK/KNM (6/16/2021)
    Lois Boyd, 76, of Amelia Court House, Virginia, pleaded guilty on June 14, 2022, to a violation of the Travel Act. Boyd, also a member of the Konda Organization, is alleged to have conspired with others to receive victim money derived from a variety of fraud schemes and launder the proceeds through cryptocurrency. Boyd routinely structured deposits in order to avoid transaction reporting requirements and to conceal the nature and source of the criminal proceeds. Boyd and others in the Konda Organization exchanged the criminal proceeds for cryptocurrency and directed the cryptocurrency to wallets under the control of their foreign co-conspirators. In August 2020, Boyd and others traveled to Longview, Texas, where they attempted to exchange more than $450,000 for Bitcoin.

  • U.S. v. John Khuu, 6:22-CR-62-JCB/JDL (5/18/2022)
    John Khuu, 27, of San Francisco, California was named in an indictment returned by a federal grand jury charging him in a money laundering conspiracy. According to the indictment, Khuu is alleged to have conspired with others to launder the proceeds of his drug trafficking organization through cryptocurrency. The defendant allegedly distributed counterfeit pharmaceutical pills and other controlled substances on dark web markets to customers across the United States. Customers paid for their purchases by transferring cryptocurrency, usually Bitcoin, from their dark web market customer accounts to one of Khuu’s vendor accounts. Khuu and his co-conspirators traded the Bitcoin for U.S. currency and laundered the proceeds through hundreds of transactions and dozens of financial accounts. During the course of the conspiracy, Khuu and his co-conspirators allegedly laundered more than $5,350,000.00. On August 17, 2022, Khuu was also charged by a federal grand jury in the Northern District of California in a two-count indictment charging him with unlawful importation of a controlled substance.

  • U.S. v. Randall V. Rule, et al., 6:22-CR-64-JDK/KNM (5/18/2022)
    Randall V. Rule, 71, of Reno, Nevada, and Gregory C. Nysewander, 64, formerly of Irmo, South Carolina, were named in an indictment returned by a federal grand jury charging them with money laundering conspiracy, money laundering, and a conspiracy to violate the Bank Secrecy Act. According to the indictment, Rule and Nysewander are alleged to have conspired with others to launder the proceeds of wire fraud and mail fraud schemes through cryptocurrency. The defendants converted funds from romance scams, business email compromises, and real estate scams, and other fraudulent schemes into cryptocurrency and sent the cryptocurrency to accounts controlled by foreign and domestic co-conspirators. The defendants and their co-conspirators made false representations and concealed material facts, in order to avoid discovery of the fraudulent nature of deposits, wires, and transfers, such as providing instructions to co-conspirators and victims to label wire transfers as “loan repayments” and “advertising.” The defendants also made false representations and concealed material facts when completing account opening documents and when communicating with financial institutions and cryptocurrency exchanges. During the course of the conspiracy, Rule, Nysewander, and their co-conspirators allegedly laundered more than $2.4 million. Rule and Nysewander are also charged with willfully violating the money services business requirements of the Bank Secrecy Act.

  • U.S. v. Sharena Seay, 6:22-CR-110-JDK/JDL (8/17/2022)
    Sharena Seay, 37, of Jacksonville, Florida, was named in an indictment returned by a federal grand jury charging her with money laundering. According to the indictment, Seay is alleged to have laundered the proceeds of her drug trafficking operations through cryptocurrency. The defendant allegedly supplied alpha-Pyrrolidinopentiophenone (alpha-PVP), which is often called “flakka,” and similar synthetic cathinones, such as Eutylone or alpha-PiHP. Seay distributed alpha-PVP and other controlled substances to various customers across the United States. Customers who purchased controlled substances from Seay paid for their purchases with cash. Seay laundered the cash proceeds through cryptocurrency in order to purchase more controlled substances on the dark web and to conceal her criminal activity. During the course of the conspiracy, Seay allegedly laundered more than $1.2 million.

  • U.S. v. Fnu Ankush, et al., 6:22-CR-111-JCB/KNM (8/17/2022)
    Fnu Ankush, 35, of Fishers, Indiana, Jenisha Katuwal, 40, of Fishers, Indiana, Sukhwinder Sandhu, 44, of Philadelphia, Pennsylvania, Inder Singh, 37, of Philadelphia, Pennsylvania, Mukul Khanna, 37, of Philadelphia, Pennsylvania, Satinder Singh, 36, of Philadelphia, Pennsylvania, Ramneek Singh, 28, of Levittown, New York, Muninder Singh, 52, of Fairfax, Virginia, Sandeep Heir, 43, of Fresno, California, and Rachel Mullins, 36, of Jacksonville, Florida, were named in an indictment returned by a federal grand jury charging them in a wire and mail fraud conspiracy. According to the indictment, the defendants facilitated technical support schemes by creating a financial infrastructure in the United States that involved establishing shell companies with names intended to resemble names of legitimate companies. The defendants opened and controlled business bank accounts in the names of the shell companies in order to facilitate the computer tech scheme. The defendants also established websites for many of the shell companies in order to make the shell companies appear legitimate. Then, through false and fraudulent pretenses, representations, and promises, and concealment of material facts, the defendants and their co-conspirators persuaded victims to deposit, wire, or transfer funds into designated bank accounts or to mail funds to designated addresses.

These efforts are part of Operation Crypto Runner, an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

In October 2017, the Elder Abuse Prevention and Prosecution Act (EAPPA) was signed into law. The EAPPA’s purpose is to increase the federal government’s focus on preventing elder abuse and exploitation. Subsequently, the Department of Justice launched the Elder Justice Initiative (EJI). Through the EJI, the Department has participated in hundreds of criminal and civil enforcement actions involving misconduct that targeted vulnerable seniors. The Department has conducted hundreds of trainings and outreach sessions across the country. The EJI website contains useful information, including educational resources about prevalent financial scams so you can guard against them.

In August 2020, the Eastern District of Texas announced its own initiative, in partnership with law enforcement and private financial institutions, to identify and prosecute transnational elder fraud. This EDTX initiative is designed to combat these criminal organizations, both foreign and domestic, as well their networks of associates and money mules who launder the stolen funds.

The investigations arising from the operation are being conducted by the U.S. Secret Service and the U.S. Postal Inspection Service and are being led and prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld and L. Frank Coan, Jr., with assistance from the Criminal Division’s Fraud Section and Computer Crime and Intellectual Property Section and the Department’s Office of International Affairs.

Tuesday, July 26, 2022

Details of Guilty Plea by Michael Stollery, CEO of TBIS, for Cryptocurrency Fraud #Crypto #Cryptocurrency #Cyber

The CEO of Titanium Blockchain Infrastructure Services Inc. (TBIS) pleaded guilty in the Central District of California for his role in a cryptocurrency fraud scheme involving TBIS’s initial coin offering (ICO) that raised approximately $21 million from investors in the United States and overseas.
Titanium Blockchain Infrastructure Services


According to court documents, Michael Alan Stollery, 54, of Reseda, California, was the CEO and founder of TBIS, a purported cryptocurrency investment platform, and touted TBIS as a cryptocurrency investment opportunity, luring investors to purchase “BARs,” the cryptocurrency token or coin offered by TBIS’s ICO, through a series of false and misleading statements. Although he was required to do so, Stollery did not register the ICO regarding TBIS’s cryptocurrency investment offering with the U.S. Securities and Exchange Commission (SEC), nor did he have a valid exemption from the SEC’s registration requirements.

Stollery admitted that, to entice investors, he falsified aspects of TBIS’s white papers, which purportedly offered investors and prospective investors an explanation of the cryptocurrency investment offering, including the purpose and technology behind the offering, how the offering was different from other cryptocurrency opportunities, and the prospects for the offering’s profitability. Stollery also planted fake client testimonials on TBIS’s website and falsely claimed that he had business relationships with the Federal Reserve and dozens of prominent companies to create the false appearance of legitimacy. Stollery further admitted that he did not use the invested money as promised but instead commingled the ICO investors’ funds with his personal funds, using at least a portion of the offering proceeds for expenses unrelated to TBIS, such as credit card payments and the payment of bills for Stollery’s Hawaii condominium.

Stollery pleaded guilty to one count of securities fraud. He is scheduled to be sentenced on November 18 and faces up to 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.


Tuesday, July 05, 2022

Florida Man is Among 3 Men Charged in $100 Million Cryptocurrency Fraud #Conspiracy #MoneyLaundering #Ponzi #Stuart

A federal grand jury indicted Emerson Pires, 33, and Flavio Goncalves, 33, both of Brazil, and Joshua David Nicholas, 28, of Stuart, Florida, in connection with a global cryptocurrency-based fraud that generated around $100 million in revenues from investors. The indictment charges all three defendants with one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud. The indictment also charges Pires and Goncalves with conspiracy to commit international money laundering.
EmpiresX cryptocurrency charged as a reputed Ponzi Scheme


According to the indictment, Pires and Goncalves founded EmpiresX, a cryptocurrency investment platform and unregistered securities offering. Pires and Goncalves, along with Nicholas, the company’s so-called “Head Trader,” fraudulently promoted EmpiresX. They misled investors about, among other things, a purported proprietary trading “bot” that they claimed could generate guaranteed returns to investors in EmpiresX.

As alleged in the indictment, Pires and Goncalves then laundered investors’ funds through a foreign-based cryptocurrency exchange, and paid out early EmpiresX investors with money obtained from later investors in a Ponzi-style scheme.

Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, FBI Miami Field Office, and Anthony Salisbury, Special Agent in Charge, Homeland Security Investigations (HSI), Miami Field Office, made the announcement.

“Our office is committed to protecting investors from sophisticated scammers seeking to capitalize on the relative novelty of digital currency,” said United States Attorney Gonzalez. “As with any emerging technology, those who invest in cryptocurrency must beware of profit-making opportunities that appear too good to be true.”

“The technology has changed, but the crime remains the same,” said George L. Piro, Special Agent in Charge of FBI Miami. “Unscrupulous fraudsters are nothing new to the investment world - what’s changing is they are now pushing their criminal activity into the cryptocurrency realm. Investors beware. Conduct your due diligence before investing. The FBI would like to commend Homeland Security Investigations for their close cooperation on this case.”

“This case should serve as a warning to any individuals who look to illegally capitalize on the perceived ambiguity of the crypto market to take advantage of innocent investors” said HSI Miami Special Agent in Charge Anthony Salisbury. “HSI will continue to work with our partners to pursue anyone who utilizes these types of schemes to victimize would be customers.”

FBI and HSI are investigating the case.

Sunday, July 13, 2014

Update on #GameOverZeus and #Cryptolocker Disruption

The Justice Department filed a status report with the United States District Court for the Western District of Pennsylvania updating the court on the progress in disrupting the GameOver Zeus botnet and the malicious software known as Cryptolocker. The disruption began in late May, when the Justice Department implemented a series of Court-authorized measures to neutralize GameOver Zeus and Cryptolocker—two of the most sophisticated and destructive forms of malicious software in existence.

In the status report, the Justice Department informed the court that the technical and legal measures undertaken to disrupt GameOver Zeus and Cryptolocker have proven successful, and that significant progress has been made in remediating computers infected with GameOver Zeus.

The Justice Department reported that all or nearly all of the active computers infected with GameOver Zeus have been liberated from the criminals’ control and are now communicating exclusively with the substitute server established pursuant to court order. The Justice Department also reported that traffic data from the substitute server shows that remediation efforts by Internet service providers and victims have reduced the number of computers infected with GameOver Zeus by 31 percent since the disruption commenced.

The Justice Department also reported that Cryptolocker has been neutralized by the disruption and cannot communicate with the infrastructure used to control the malicious software. As a result, Cryptolocker is effectively non-functional and unable to encrypt newly infected computers.

Computer users who believe they may be infected with GameOver Zeus are encouraged to visit the Department of Homeland Security’s dedicated GameOver Zeus webpage, which is located at www.us-cert.gov/gameoverzeus. Among other resources, the webpage includes links to tools from trusted vendors that can detect and remove the GameOver Zeus infection.

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