The Justice Department sentenced a Swedish man to 15 years in prison for a $16 million crypto-fraud scheme

DOJ
Brian Netter, a lawyer for the women’s soccer team in an equal pay case, will be a top defender of Biden policies at the Justice Department.

  • A Swedish man was sentenced to 15 years in prison for swindling $16 million from victims in a crypto scheme.
  • Roger Nils-Jonas Karlsson, 47, ran an investment fraud scheme from 2011 until 2019 from Thailand.
  • He lured victims to purchase shares from his company using cryptocurrencies but transferred the funds directly to his personal account.
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A Swedish national was sentenced to 15 years in prison after swindling thousands of victims out of more than $16 million in a cryptocurrency fraud, the Department of Justice said in a statement Thursday.

Roger Nils-Jonas Karlsson was arrested on June 17, 2019 in Thailand and was extradited to the US. He pleaded guilty on March 4, 2021.

According to the DOJ, the 47-year-old ran an investment fraud scheme from 2011 to 2019.

His scheme involved convincing victims to purchase shares of his company, Eastern Metal Securities, using cryptocurrencies such as bitcoin and promising them “astronomical returns” tied to the price of gold.

Karlsson used his website to lure potential investors to purchase shares of less than $100 a piece with an eventual payout of 1.15 kilograms of gold per share. On January 2, 2019, gold was worth more than $45,000 per kilogram.

Karlsson – known by several aliases including Steve Heyden, Euclid Deodoris, Joshua Millard, Lars Georgsson, Paramon Larasoft, and Kenth Westerberg – would then wire the funds provided by the victims to his personal bank accounts, which he used to fund his lavish lifestyle. This included snapping up expensive homes, a racehorse, and a resort in Thailand.

Karlsson’s fraud targeted financially insecure investors, the department said, causing many of them severe financial hardship.

The scheme, however, was not over once the funds were transferred.

To prolong his fraud, Karlsson would even update his victims with the state of their assets. In one instance, when he was trying to explain payout delays, he said he was working with the Securities and Exchange Commission.

As part of the sentence, Karlsson was ordered to forfeit his resort and other properties and accounts. He also issued a money judgment in the amount of $16,263,820.

The US is now seeking restitution on behalf of his victims.

Cryptocurrency fraud schemes have been on the rise ever since digital assets exploded in popularity in recent years. Fraudsters have also become creative in the ways they swindle people.

Some instances included fraudulent cryptocurrency domain registrations, blockchain scams, and criminals impersonating Elon Musk.

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Sites pushing suspected dogecoin scams have skyrocketed in lockstep with the meme token’s nearly 4,000% rise this year, study shows

Dogecoin and other gold coins on black background
Cryptocurrencies that are set to see the most growth are backed by strong fundamentals

Sites pushing suspected dogecoin scams have skyrocketed in 2021, rising in lockstep with the meme token’s nearly 4,000% rally since the beginning of the year.

Domain registrations relating to dogecoin – or some semblance of the cryptocurrency’s name – jumped 744% from January to May, according to data from cybersecurity firm BrandShield.

In January 2021, only 143 domains were tagged as suspicious registrations compared to the 1,207 in May. Just 25 registrations were identified in December 2020, a year before the joke crypto token began its astounding surge.

Domain registration is the process in which a person or a company “reserves” a name on the internet for a specific timeframe.

The suspicious domains that contain the word “dogecoin” tracked by the company are usually used for phishing scams or other kinds of fraudulent online activity, Yoav Keren, BrandShield co-founder and CEO told Insider.

While bitcoin has more suspicious domain registrations at 1,764 as of May 2021, registrations for the world’s largest cryptocurrency by market capitalization actually slipped by 60% from the 4,308 in January.

Ether also saw a similar downward trend, with 286 suspicious domain registrations in May 2021, an 11% decline from the 323 in January.

Domain registrations of bitcoin, ether, dogecoin per month. Data by
Data registrations per month.

Keren said the rise in dogecoin fraud can in part be attributed to prominent figures constantly stirring up social media chatter over the meme token. He singled out Elon Musk.

The Tesla CEO, who appointed himself the DogeFather, is famous for his market-moving tweets, which at one point pushed the price of dogecoin by 25% with a single word.

Apart from the three cryptocurrencies, the Israeli cybersecurity startup looked into six other coins – polkadot, ripple, litecoin, cardano, tether, and stellar – although found that these did not get as much traction as the more famous tokens.

“The problem with the crypto industry, in general, is how it’s an anonymous industry,” Keren told Insider. “So if you’re defrauded, there’s nothing you can do about it. You can’t know who’s behind that wallet, you can’t go back to your credit card company.”

BrandShield also analyzed five cryptocurrency trading platforms – Coinbase, Binance, Bisq, Bitfinex, and CoinMarketCap – and found that these were also popular targets for cybercriminals, who register fraudulent versions of these domains to trick crypto investors.

Coinbase saw the largest number of suspicious domain registrations, according to BrandShield.

In May 2021, the largest cryptocurrency exchange in the US saw suspicious domain registration rise 323% to 585 from just 138 in January.

Binance, the world’s largest cryptocurrency exchange, came in a close second. Suspicious domain registrations rose 123% to 308 over the same period from 138 at the start of the year.

Once the phishing or scam sites are identified, Keren said his firm uses artificial intelligence and machine learning to continue analyzing them, before having his team report these to the relevant service providers.

“As cryptocurrency receives more mainstream coverage, it shouldn’t surprise anyone that cybercriminals are following the money and targeting retail investors,” Keren said.

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Two South African brothers have vanished with $3.6 billion of bitcoin in what could be the biggest crypto heist in history

Bitcoin golden physical coin illustration on dark black background with reflection.

Two South African brothers recently vanished with $3.6 billion worth of bitcoin in what could potentially be the biggest cryptocurrency heist in history.

Local media, including Independent Online and ITWeb, were the first to report on the case.

In 2019, Ameer Cajee and his younger brother, Raees Cajee, founded crypto investment app Africrypt.

Not long after, the siblings, along with 69,000 bitcoins worth roughly $4 billion at their April peak, are nowhere to be found.

It all began in April when Ameer, who is the company’s chief operating officer, informed their clients that Africrypt was hacked, compromising their accounts, wallets, and nodes.

In an unusual step, 20-year-old Ameer told them not to report the incident to authorities as this would impede attempts to recover the funds.

A few suspicious customers, however, did report the hack. They contacted Hanekom Attorneys, according to Independent Online, who then tried to track the brothers down. When unsuccessful, Hawks, a police unit in South Africa that targets crime and corruption, was looped in.

“We were immediately suspicious as the announcement implored investors not to take legal action,” Hanekom Attorneys told Bloomberg over email. “Africrypt employees lost access to the back-end platforms seven days before the alleged hack.”

The lawyers also told cryptocurrency exchanges around the world to sound an alarm if they noticed any suspicious conversion of coins.

FNB, which banked Africrypt, has also been questioned about the episode, according to documents seen by Independent Online. The local bank denied any involvement.

“FNB once again confirms that it does not have a banking relationship with Africrypt. Due to client confidentiality, FNB cannot provide any information on specific bank accounts,” Nadiah Maharaj, FNB risk spokesperson, told Independent Online.

As the brothers remain missing, some efforts to get to the bottom of things have hit roadblocks.

For instance, South Africa’s Finance Sector Conduct Authority, the country’s financial institutions regulator, said cryptocurrency-related matters do not fall under its jurisdiction, Independent Online reported.

Crimes involving crypto are a growing cause of concern for regulators and companies.

Most recently, the Bank for International Settlement criticized the digital asset for its role in illegal activities.

“By now, it is clear that cryptocurrencies are speculative assets rather than money, and in many cases are used to facilitate money laundering, ransomware attacks, and other financial crimes” BIS said.

US Treasury Secretary Janet Yellen, meanwhile, has also been a vocal critic of cryptocurrencies.

“To the extent it is used, I fear it’s often for illicit finance,” she said in February. “I do worry about potential losses that investors can suffer.”

Read the original article on Business Insider