Cryptocurrency hackers stole over $360 million during February, almost doubling the amount stolen in January. According to Peckshield, a cryptocurrency and blockchain security firm, the largest hack event in February involved a security breach in Playdapp, a Web3 gaming platform, that lost $290 million four days after being attacked. Fixedfloat, a cryptocurrency exchange, also lost […]
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The letters went out like clockwork every month — 750,000 of them.
They bore tidings of great wealth, declaring the recipient had won a large cash prize. All they had to do was send as little as a $30 processing fee to claim it.
And every month, some 2% of the recipients responded — or 15,000 people — each enclosing a $30 to $50 check or money order, according to court documents. In all, that amounted to at least $450,000 a month.
But it was all a scam, federal prosecutors said. There were no prizes. The money simply went into the pockets of a 41-year-old man named Ryan Young from Upper Saddle River, N.J. From 2011 through 2022, prosecutors say, Young and co-conspirators raked in $50 million through the scam.
On Friday, Young was sentenced to five years in prison for his role in operating two separate prize-letter schemes. Perhaps even worse, Young had been accused of running the second scheme after pleading guilty and awaiting sentencing for the first, prosecutors said.
“The defendant’s conduct is especially egregious,” said Eric Shen of the U.S. Postal Inspection Service. “After pleading guilty and acknowledging his responsibility, Mr. Young decided to revert back to what he knew best, which was ripping off Americans.”
Messages left with Young’s attorney weren’t immediately returned.
Federal prosecutors in the Eastern District of New York say Young specifically targeted older victims by purchasing lists from other scam operators of people who had fallen prey to similar frauds in the past.
According to court filings, anyone who ever responded to one of the phony prize letters would then receive 15 more over the next few months. Each would be written to appear different, but all would solicit similar fees in order to claim the prize. For people who had responded once, the reply rate to follow-up solicitations was as high as 5%, according to details contained in the filings.
“This is the 4th letter from you. I ask you to find the money order I sent in March. I paid you 30 dollars. Where is my money?” read a letter from one victim that investigators found in Young’s home.
The court filings included many such letters, almost all from victims who described themselves as elderly and living on very limited fixed incomes. Many of them said the promised money was like a gift from God.
“I am a 93-year-old living on a small social security income. My goal in life is to pay my debts so I can continue my charities before I die. So please be true to this. May the good lord bless you,” read one letter. “I am in a big financial crisis. I just borrowed the $50 from a neighbor.”
Others described being in poor health and having few relatives or friends who could help them.
“I hope this is not a scam. I am 80-years-old, sick and in bed and I need this money to get well,” read another letter.
Prosecutors say Young had spent almost all of his adult life honing his prize-money scam.
Part of his ability to ramp up the scheme to such a widespread level came from his partnership with third-party outfits overseas, known as caging services, that would help send the solicitations and collect and process the payments, prosecutors said. The firms specialized in sweepstakes and clairvoyant mailings, court documents said.
One of the firms, called Trends, was based in the Netherlands and shut down by Dutch authorities in 2016 after being hit with charges brought by federal prosecutors in Brooklyn. Prosecutors say Young and his co-conspirators also used similar services in Canada and Austria.
To further conceal his connection with the scheme, Young registered corporate entities overseas using intermediaries. Those firms were used to create bank accounts for Young to ultimately receive the payments.
Prosecutors say Young hired another man, Thomas Ressler, of Whitehall, Mont., to write the phony solicitation letters, and paid him over $1 million over the course of several years. Ressler pleaded guilty in 2018 to his role in the scheme and was sentenced to 36 months in prison.
Young was initially arrested in 2016 for running the larger of the two scams he was eventually charged with, in which he and a co-conspirator, Ercan Barka, were accused of stealing $48 million from hundreds of thousands of elderly victims. Barka provided testimony against Young and his case remains pending, court records show.
In 2018, Young pleaded guilty to one count of conspiracy to commit mail fraud. But while awaiting sentencing, prosecutors say, he launched another prize-money scheme through which he would eventually steal an additional $1.6 million. He was charged with the second fraud in 2022 and pleaded guilty the following year.
In court filings, Young’s lawyer said his client had suffered a lapse of judgment in 2018 following the death of his mother and the return of his estranged father to his life, which led him to make the poor choice of launching another fraud scheme.
Young’s attorney had argued in court papers that his client should be given some credit for cooperating with authorities in helping take down the overseas caging services that had played a role in his fraud and others.
Prosecutors argued that Young had spent much of his life as a predator targeting elderly, vulnerable people from whom he “took more than $50 million dollars.” They noted that he continued running the scam despite receiving “handwritten accounts of the harm his actions were having on his victims on a daily basis.”
Malicious actors targeting the crypto space have taken more than $45 million in digital assets from their victims in the month of August alone and a total of $997 million year-to-date (YTD), according to a report shared by the blockchain security firm CertiK.
In the report, CertiK highlighted that exit scams took around $26 million, flash loan attacks took $6.4 million and exploits took $13.5 million from their victims in August 2023. The cybersecurity firm confirmed that the total losses amounted to over $45 million.
CertiK pointed out that some of the major incidents that contributed to the amount lost include the Zunami Protocol attack, which led to $2.2 million in losses; the Exactly Protocol exploit, which took $7.3 million; and the PEPE (PEPE) withdrawal incident, which led to $13.2 million in losses.
According to CertiK, more than $997 million has been lost to exploits, hacks and scams in 2023 so far. This includes around $261 million lost to flash loan attacks, over $137 million lost to exit scams and more than $596 million lost to exploits.
Related: CertiK drops findings on alleged scammer who stole $1M in crypto
While the losses in August are still high, the amount is significantly lower compared to the losses incurred in the previous month. In July 2023, around $486 million in total losses were recorded by Web3 data outlet De.Fi, with the Multichain exploit alone contributing around $231 million to the total amount lost.
With various factors at play, Multichain officially announced the halting of its operations on July 14. The team cited a lack of funding for operations and a lack of alternative sources of information as the reasons for its shutdown. According to the team, it was unable to contact the CEO since he was taken into custody by Chinese authorities.
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Magazine: $3.4B of Bitcoin in a popcorn tin — The Silk Road hacker’s story
A street gang in Milwaukee allegedly stole millions of dollars in Covid-19 pandemic relief money that was then used to carry out a murder and purchase guns and drugs, among other items, according to a federal indictment.
The 43-count indictment charges 30 members of the “Wild 100s,” also known as the “Shark Gang,” with a litany of crimes that include mail fraud, murder for hire, conspiracy to sell guns, illegal possession of firearms including a machine gun and drug possession with intent to sell.
The indictment was returned by a grand jury in the U.S. District Court for the Eastern District of Wisconsin and unsealed in May.
The alleged leader of the gang, Ronnell Bowman, and another defendant, Ronnie Jackson, were charged with the April 2021 killing of an individual named only as N.B. in a murder-for-hire scheme.
Bowman and Jackson have pleaded not guilty. Bowman, who was arrested in the Houston area in May, is being held in detention pending his trial. The two men could face life in prison if convicted.
Assistant U.S. Attorney Laura Kwaterski told a federal judge in May that Bowman was the ringleader of the fraud scheme and was personally responsible for $850,000 in stolen Covid relief money, according to a transcript from the defendant’s detention hearing.
The fraud methods Bowman allegedly taught other gang members resulted in the theft of millions of dollars of Covid relief money, Kwaterski told the judge during the hearing.
The indictment alleges that the “Wild 100s” filed fraudulent claims for Pandemic Unemployment Assistance in California and several other states.
The defendants used pre-loaded debit cards issued by the states’ unemployment programs to withdraw cash from ATMs in Wisconsin, according to the indictment. The stolen Covid cash was allegedly spent to arrange the murder and to purchase guns, drugs, jewelry, clothing and vacations, among other items.
Bowman allegedly used the stolen money to solicit the murder and to purchase multiple firearms, including machine guns, and then gave those weapons to others knowing they would be used to commit violence, including murder, Kwaterski told the judge during the detention hearing.
Bowman allegedly offered to pay for the murder of a rival gang member’s mother or sister on Instagram, according to evidence presented by Kwaterski at that hearing. Instead, the rival gang member’s friend was found killed. Jackson was allegedly paid $10,000 to commit the murder, according to Kwaterski.
Bowman is suspected in two other murders for hire related to a war with a rival gang, Kwaterski told the judge during the detention hearing.
The breakup of the “Wild 100s” by law enforcement was part of a nationwide sweep this summer by Justice Department strike teams targeting $836 million in stolen Covid relief money. The operation led to charges against 371 defendants in a range of fraud cases.
U.S. Attorney General Merrick Garland established a task force in May 2021 to go after fraudsters who have stolen Covid relief money. Criminal charges have been filed against more than 3,000 people and upward of $1.4 billion in stolen money has been recovered so far, according to the DOJ.
Deputy Attorney General Lisa Monaco said last week that the DOJ is setting up new strike teams in Colorado and New Jersey to continue the hunt for stolen relief money.
“We will seek judicial orders requiring convicted defendants to pay back every stolen dollar and we have 20 years to realize those recoveries,” Monaco said.