A 37 year-old man in the US has been sentenced to one year and one day in prison for fraud in connection with a Bitcoin phishing scheme designed to rob victims of their cryptocurrency.
Michael Richo, of New Haven, was also ordered to forfeit $352,000 in cash, various computers and electronic devices, and an assortment of precious coins and metals that he purchased with the proceeds of his offense.
Following his release, Richo will be subject to three years of supervised release.
Court documents and statements made in court specify that Richo targeted individuals on the dark web with the phishing scheme.
He did so by posting fake links to online marketplaces on dark web forums. These links would then direct users to fake login pages that resembled the real login pages for various dark web marketplaces.
When an individual tried to login, Richo would steal their credentials. He would then monitor the individual’s Bitcoin balance at the real marketplace and would withdraw the coins once the person deposited the funds.
Richo would either deposit the Bitcoin into his own wallet or sell it in exchange for fiat currency. The US dollars obtained as a result were deposited into bank accounts under his control or provided to him through Green Dot Cards, Western Union transfers, and MoneyGram transfers.
Overall, Richo was able to steal more than $365,000, and had over 10,000 stolen usernames and passwords on his computer.
He was arrested on a federal criminal complaint on October 5, 2016 and pleaded guilty to one count of access device fraud and one count of money laundering on June 27, 2017.
Other Bitcoin scammers
Scammers using Bitcoin for nefarious reasons isn’t something new. In fact, just last month, the Federal Bureau of Investigation (FBI) announced the results of its latest dark web investigation, which saw more than $4 million worth of cryptocurrency seized from criminals.
Led by members of the Joint Criminal Opioid and Darknet Enforcement (J-CODE) team, Operation SaboTor resulted in 61 arrests and the closure of 50 dark web accounts linked with online criminal activity. The operation also confiscated some 300 kilos of drugs, 51 firearms, and more than $4.5 million worth of cryptocurrency, $2.48 million in cash, and $40,000 worth of gold.
More recently, Hard Fork also reported on a similar case in Canada, which saw a judge order the forfeiture of approximately $1.4 million in Bitcoin found on a drug dealer’s computer as part of a criminal investigation.