An international cryptocurrency fraud cartel has been busted by a joint investigation between US and foreign authorities.
The US Department of Justice (DOJ) announced last week that it has charged 20 people, including 16 foreigners for being part of an international organized crime syndicate that saw American citizens defrauded for millions of dollars.
“The defendants allegedly orchestrated a highly organized and sophisticated scheme to steal money from unsuspecting victims in America and then launder their funds using cryptocurrency,” said Assistant Attorney General Benczkowski in the DOJ‘s statement.
According to the statement, the criminal conspiracy had defrauded Americans by listing products – usually cars – on online auction websites like eBay and Craigslist, only the item being sold didn’t exist.
To make this scam seem more believable, the fraudsters had help from people based in the US. After the victims were convinced to pay, money was sent to the US-based associates who then converted the money to cryptocurrency before sending it on to their predominantely Romanian-based counterparts.
The scammers often pretended to be US military personell who needed to sell the item quickly, as they were about to be deployed, to hoodwink their unfortunate victims.
“This prosecution stems from a multi-year investigation initiated in Kentucky led by the US Secret Service, in cooperation with several local, state, federal, and international law enforcement partners,” said U.S. Attorney Duncan in the DOJ‘s statement.
Of the non-US people charged, 12 have been extradited to the US and are currently awaiting trials which are scheduled to take place later this year.
Of course, cryptocurrency hasn’t neceasrily enabled money laundering, but it has certainly created a fast and easy to use option for scammers. One that lets scammers send ‘dirty’ money all over the world, much quicker than traditional laudering methods would ever allow.
As Secret Service Director Randolph “Tex” Alles said, “[t]oday’s announcement demonstrates the success of the collaborative efforts of our worldwide network of law enforcement partners.”
“This is a shared win for law enforcement across the globe. I would like to thank the more than a dozen law enforcement agencies worldwide who helped us investigate this case, each played a vital role in its success,” they added.
Perhaps this is a sign of things to come. In a world of decentralized technologies it’s going to become increasingly easy for criminals to run international scams. If the authorities are going to catch these criminals, they’ll surely have to continue to work together.
Published February 11, 2019 — 14:00 UTC