How the rising crypto business can be exploited. When the police apprehended scammer Evan Leslie McMahon in March 2019. But discovered much more than just the pirated Netflix logins. That allowed his victims to watch The Witcher on the cheap. They also discovered a large amount of cash.
The early-20s hacker also had nine electronic wallets. Each containing an alphabet soup of cryptocurrencies. Bitcoin, bitcoin cash, ethereum, digibyte, XRP, stratis, bitcoin gold, and litecoin. That he purchased with the proceeds of his crimes. He was also in possession of a number of other cryptocurrencies. Including bitcoin gold and litecoin.
Despite being sentenced in April of last year for “offering a circumvention service”. And “dealing with the proceeds of crime,” McMahon avoided jail time. By receiving an intensive correction order. Which allowed him to serve his two and a half month prison. Term out in the community.
However, he was ordered to forfeit the cryptocurrency, which had initially been valued. At $460,000 but had increased in value by the time of his sentencing. To an estimated value of $1.2 million. Making it the largest hoard of tokens seized by the Commonwealth to date.
According to court records, McMahon used 175 PayPal accounts under fictitious identities. To collect money from clients of his websites. Which included HyperGen, WickedGen, Autoflix, and AccountBot. The accounts were held under aliases such as Zac Kentish, Izabella Sjogren, and Samuel Binns.
According to federal investigators. He subsequently turned a portion of the money into cryptocurrency.
After being questioned about how McMahon was able to open 175 accounts. With the company and what this meant about the company’s anti-money laundering mechanisms. PayPal declined to comment.
How the Rising Crypto Seizures on the Rise
Austrac, Australia’s financial security department, said bitcoin is no longer just for online crooks. Like McMahon, who ran a number of websites selling bootlegged. Netflix, Spotify, and other subscriber logins.
“As legal use of cryptocurrency grows, we’re seeing a surge in abuse.” Says Austrac’s national manager of intelligence operations, Michael Tink.
So, instead of using the banking sector or a remittance dealer to send money outside. We might see a criminal group try to deposit proceeds through a digital currency exchange provider. And transmit money to a counterpart overseas using cryptocurrencies.
Tink is quick to stress out that utilizing bitcoin. To launder money is still “quite” new, but it is growing.
While McMahon’s wallets were seized, investigators probing alleged fraud have frozen greater amounts.
The Australian Securities and Investments Commission got federal court orders. Freezing bitcoin believed to valued between $7m and $22m in October last year. According to Asic, at least $2.4 million of investor funds utilized to buy crypto assets. The Asic inquiry is ongoing with no charges filed.
Foreign authorities have also seized substantial sums of crypto. The FBI seized 3,879 bitcoins last month, claiming they were the fruits of a US$155 million ($216 million). Scam against insurance business Sony Life by employee Rei Ishii. Ishii accused of fraud in Japan but has not tried.
Authorities claim bitcoin used to launder money in another US court case. Involving 9.881 bitcoin (about $590,000).
A Homeland Security agent alleges in an affidavit submitted in forfeiture proceedings. That Fernando Berrocal, a businessman in the perfume industry. Took up US$2.3m ($3.2m) in bulk cash from sites. Both inside and outside the US between May 2019 and February 2021.