A recent four-count superseding indictment has charged 12 individuals involved in a wide-ranging cybercrime operation that netted over $263 million in cryptocurrency thefts.
The defendants, a mix of Americans and foreign nationals, are accused of running a cyber-enabled racketeering conspiracy that spanned the United States and overseas. The criminal enterprise, which allegedly started in October 2023, is believed to have been facilitated by friendships formed through online gaming platforms.
Defendants Face Multiple Charges
The indictment includes charges of RICO conspiracy, wire fraud, money laundering, and obstruction of justice. This new development adds 12 defendants to a case that initially began with the arrest of Malone Lam in September 2024. While several individuals were arrested this week in California, others remain abroad, with two believed to be in Dubai.
The operation involved various roles, such as hackers, organizers, target identifiers, and even burglars. The conspirators used tactics like database hacking, social engineering, and home break-ins to steal cryptocurrencies from unsuspecting victims. Once the virtual currencies were obtained, the proceeds were laundered and used to fund extravagant purchases.
Lavish Spending Fueled by Stolen Crypto
The stolen cryptocurrency was used to fund a lavish lifestyle, including nightclub services that cost up to $500,000 per night, luxury vehicles, and high-end fashion accessories. According to the indictment, the conspirators also indulged in renting luxury homes in various locations, including Los Angeles, Miami, and the Hamptons, and even chartered private jets. Members of the group amassed a fleet of at least 28 exotic cars worth millions of dollars.
Additionally, the laundered funds were moved through various mixers, exchanges, and virtual private networks to obscure the identities of the perpetrators. Some of the stolen money was even sent through the U.S. postal service in unusual ways, such as hidden inside stuffed animals.
Significant Break-Ins and High-Profile Thefts
As part of their efforts, the defendants also engaged in home break-ins to steal hardware wallets containing cryptocurrencies. One of the more shocking incidents occurred in New Mexico in July 2024, when Marlon Ferro allegedly stole a victim’s cryptocurrency wallet while Lam monitored the victim’s movements via iCloud.
In another instance, the enterprise is accused of stealing over 4,100 Bitcoin, valued at over $230 million at the time, through a fraudulent scam. The stolen assets were converted into cash or luxury items, with the laundered funds then circulating through crypto-to-cash services operated by some of the co-conspirators.
Continued Operations After Arrest
Even after his arrest in September 2024, Malone Lam continued to direct operations from pretrial detention. The indictment alleges that he collaborated with other members to continue collecting stolen cryptocurrency and using the proceeds to buy high-end luxury goods for his girlfriend in Miami.
Ongoing Investigation and Prosecution
The U.S. Attorney’s Office, along with the FBI and IRS-Criminal Investigation, continues to investigate this extensive cybercrime network. The case is being prosecuted by Assistant U.S. Attorney Kevin Rosenberg, with substantial support from FBI field offices in Los Angeles and Miami.
The defendants’ sentences will be determined based on the advisory Sentencing Guidelines and other statutory considerations.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/twelve-defendants-charged-in-massive-263-million-crypto-scheme/