Feds charge 12 more suspects in RICO case over crypto crime spree

Twelve more suspects have been charged for their alleged involvement in a spree of cryptocurrency thefts and the subsequent laundering of virtual currency worth hundreds of millions of dollars.

The charges include RICO conspiracy, which is used to combat organized crime, as well as conspiracy to commit wire fraud, money laundering and obstruction of justice. 

Two additional suspects in the case — 20-year-old Malone Lam and Jeandiel Serrano, 21 — were arrested in September 2024 and charged in connection with the theft of about $245 million from a victim in Washington, D.C through a social engineering attack.  

According to the Department of Justice, the group grew out of relationships that began on online gaming platforms. Beginning around October 2023, they obtained information from stolen databases to identify potential victims with large cryptocurrency holdings. 

Some of the suspects allegedly “cold-called victims and used social engineering to convince them their accounts were the subject of cyberattacks and the enterprise callers were attempting to help secure their accounts,” according to the DOJ. 

The schemes netted them huge sums of money, prosecutors allege, including one theft worth $14 million and another worth $2.9 million. In one case in July 2024, Lam broke into a victim’s iCloud account in order to monitor their location. Nineteen-year-old Marlon Ferro then broke into the target’s New Mexico home to steal hardware connected to their crypto accounts, the indictment said. 

Then in August 2024, Lam and four unnamed suspects went after a creditor for the crypto lender Genesis, according to ZachXBT, a virtual currency investigator who says he helped law enforcement research the case. 

Purporting to be customer support agents from cryptocurrency exchange Gemini informing the victim their account had been hacked, they instructed them to reset their multifactor authorization and to transfer funds to a compromised wallet. They also convinced the victim to use AnyDesk to share their screen, thereby leaking their private keys. 

A video posted by ZachXBT purportedly shows their live reaction to stealing the funds, with someone yelling “We got it!” repeatedly. 

“Do you know how much money that is?” someone asks. “Holy sh–”  

With their riches, members of the group lived a lavish lifestyle, renting out mansions in Florida and California using fake documents, flying on private jets to the Hamptons and buying up exotic cars, prosecutors said. During a three-week period, they allegedly spent $4 million at Los Angeles nightclubs.

Four of the suspects — Kunal Mehta, Hamza Doost, Joel Cortez and Evan Tangeman — were charged for their alleged roles in laundering the funds. 

At one point, Conor Flansburg — an alleged database hacker and organizer for the group — asked Lam rhetorically: “[H]ow are we all so much better than everyone… [H]ow have we surpassed all the kids that have been around for 8 years, in a few months[?]”  

On September 18, 2024, Lam was informed by an off-duty law enforcement officer that the cops were closing in on him, according to the indictment. Before police arrived at his Miami house to arrest him, he walked out back to a boat dock on Biscayne Bay and dropped his cellphone into the water.