By Kevin Deutsch
In one of the largest cryptocurrency forfeiture actions ever filed by the U.S. government, federal prosecutors seized around $34 million worth of cryptocurrency tied to a Parkland resident’s illicit activity on the Dark Web.
According to a civil forfeiture complaint filed by the Department of Justice, the tech-savvy Parklander raked in millions of dollars by using an online alias to sell over 100,000 illicit items on the Dark Web and selling hacked accounts information on some of the world’s largest Dark Web marketplaces.
For example, the accused hacker sold stolen online account information for services including HBO, Showtime, Netflix, Uber, and World Wrestling Entertainment, among other services, according to prosecutors.
The alleged crypto-millionaire, whose gender and age were not made public, accessed the Dark Web by utilizing the TOR Network, also known as The Onion Router Network, records show. TOR is a special network of computers designed to anonymize a user’s internet traffic by concealing computers’ Internet Protocol addresses.
Records analyses performed by federal investigators revealed the Parkland resident used illegal Dark Web money transmitter services to launder one form of cryptocurrency into another—a technique called “chain hopping”—in violation of federal money laundering statutes, according to the records filed in federal court in Fort Lauderdale.
Prosecutors said the person also used so-called “tumblers,” Dark Web mixing services that pool together multiple cryptocurrency transactions into a well-scrambled batch. The tumblers then distribute cryptocurrency to a designated crypto-wallet at random times, in random increments, as a laundering tool.
The person’s goal, prosecutors said, was to obscure the original source of funds. But law enforcement agents were able to seize various cryptocurrency wallets associated with the hacker’s alleged activity, records show.
The hacker’s crimes began in October 2015 and continued until shortly before investigators tracked them to their Parkland residence in 2017, using digital sleuthing and bank transaction tracing, records show.
Investigators executed a search warrant at the home, and approximately $34 of the hacker’s illicit cryptocurrency profits were transferred to the government with the person’s consent, according to the government.
The legal forfeiture process was completed in March 2022, records show.
Court papers did not reference any potential filing of federal criminal charges against the hacker.
The forfeiture resulted from what DOJ dubbed “Operation TORnado,” a joint investigation that stemmed from a partnership between federal, state, and local law enforcement agencies, known as the Organized Crime Drug Enforcement Task Force.
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