Two Arrested for Alleged Conspiracy to Launder $4.5 Billion in Stolen Cryptocurrency

View Deputy Attorney General Monaco ‘s Remarks here .
Two individuals were arrested this dawn in Manhattan for an alleged conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange, soon valued at approximately $ 4.5 billion. frankincense army for the liberation of rwanda, law enforcement has seized over $ 3.6 billion in cryptocurrency linked to that hack .
“ Today ’ randomness arrests, and the department ’ randomness largest fiscal seizure ever, show that cryptocurrency is not a safe haven for criminals, ” said Deputy Attorney General Lisa O. Monaco. “ In a futile attempt to maintain digital anonymity, the defendants laundered stolen funds through a maze of cryptocurrency transactions. Thanks to the meticulous employment of jurisprudence enforcement, the department once again showed how it can and will follow the money, no matter what form it takes. ”
“ Today, federal police enforcement demonstrates once again that we can follow money through the blockchain, and that we will not allow cryptocurrency to be a safe seaport for money launder or a zone of anarchy within our fiscal system, ” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department ’ s Criminal Division. “ The arrests today show that we will take a firm stall against those who allegedly try to use virtual currencies for criminal purposes. ”

Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, New York, are scheduled to make their initial appearances in federal court today at 3:00 post meridiem in Manhattan .
According to woo documents, Lichtenstein and Morgan allegedly conspired to launder the proceeds of 119,754 bitcoin that were stolen from Bitfinex ’ s platform after a hacker breached Bitfinex ’ second systems and initiated more than 2,000 unauthorized transactions. Those unauthorized transactions sent the stolen bitcoin to a digital wallet under Lichtenstein ’ s control. Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein ’ randomness wallet via a complicate money wash work that ended with some of the steal funds being deposited into fiscal accounts controlled by Lichtenstein and Morgan. The end of the steal funds, comprising more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack. After the performance of court-authorized search warrants of on-line accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an on-line account controlled by Lichtenstein. Those files contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, and allowed special agents to legitimately seize and recover more than 94,000 bitcoin that had been stolen from Bitfinex. The reclaim bitcoin was valued at over $ 3.6 billion at the fourth dimension of capture .
“ Cryptocurrency and the virtual currentness exchanges trade in it comprise an expanding separate of the U.S. fiscal arrangement, but digital currency heists executed through complex money laundering schemes could undermine confidence in cryptocurrency, ” said U.S. Attorney Matthew M. Graves for the District of Columbia. “ The Department of Justice and our function stand ready to confront these threats by using twenty-first hundred fact-finding techniques to recover the stolen funds and to hold the perpetrators accountable. ”
The criminal complaint alleges that Lichtenstein and Morgan employed numerous twist wash techniques, including using assumed identities to set up on-line accounts ; utilizing computer programs to automate transactions, a launder proficiency that allows for many transactions to take space in a light period of meter ; depositing the stolen funds into accounts at a assortment of virtual currency exchanges and darknet markets and then withdrawing the funds, which obfuscates the lead of the transaction history by breaking up the store flow ; converting bitcoin to early forms of virtual currency, including anonymity-enhanced virtual currentness ( AEC ), in a commit known as “ range hopping ” ; and using U.S.-based business accounts to legitimize their bank activity.

“ In a methodical and count scheme, the defendants allegedly laundered and disguised their huge fortune, ” said Chief Jim Lee of IRS-Criminal Investigation ( IRS-CI ). “ IRS-CI Cyber Crimes Unit special agents have once again unraveled a advanced wash proficiency, enabling them to trace, access and seize the steal funds, which has amounted to the largest cryptocurrency seizure to date, valued at more than $ 3.6 billion. ”
“ Criminals constantly leave tracks, and today ’ randomness case is a admonisher that the FBI has the tools to follow the digital trail, wherever it may lead, ” said FBI Deputy Director Paul M. Abbate. “ Thanks to the haunting and consecrated influence of our FBI Investigative teams and law enforcement partners, we ‘re able to uncover the source of even the most sophisticated schemes and bring department of justice to those who try to exploit the security of our fiscal infrastructure. ”
“ Financial crime strikes at the core of our national and economic security. With a hack of this magnitude, public and private sector collaboration is all-important to ensure stay consumer confidence in our fiscal system, ” said Acting Executive Associate Director Steve Francis of Homeland Security Investigations ( HSI ). “ Ilya Lichtenstein and his wife Heather Morgan attempted to subvert lawful commerce for their own nefarious purposes, operating with perceived anonymity. Today ’ s action demonstrates HSI ’ s commitment and ability to work with a collation of the will to unravel these technical fraud schemes and identify the perpetrators, regardless of where they operate. ”
Lichtenstein and Morgan are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The investigation was led by IRS-CI Washington, D.C. Field Office ’ s Cyber Crimes Unit, the FBI ’ s Chicago Field Office, and HSI-New York. The Ansbach Police Department in Germany provided aid during this probe .
The case is being prosecuted by Trial Attorneys Jessica Peck and C. Alden Pelker of the Justice Department ’ s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Christopher B. Brown of the U.S. Attorney ’ mho Office for the District of Columbia. Paralegal Specialists Angela De Falco and Brian Rickers and Legal Assistant Jessica McCormick provided valuable aid. meaning aid was besides provided by Trial Attorney Christen Gallagher of the Office of International Affairs, the U.S. Attorneys ’ Offices for the Eastern District of Pennsylvania and Southern District of New York, HSI-Philadelphia, and former Assistant U.S. Attorney Jessica C. Brooks .
A complaint is merely an allegation, and all defendants are presume innocent until rise guilty beyond a reasonable doubt in a woo of police .

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