Man Charged with ‘Cryptojacking Scheme’: He Stole Cloud Computing to Mine $1 Million Worth of Cryptocurrencies
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US prosecutors have charged a man with wire fraud and money laundering in connection with a large-scale illegal “cryptojacking” operation.
Charles O. Parks III, also known as “CP3O,” is alleged to have defrauded two cloud computing providers and caused them $3.5 million in damages while using their resources to mine around $970,000 worth of cryptocurrencies, including Ether, Litecoin and Monero, according to anofficial press release.
If convicted, Parks could face up to 50 years in prison.
Parks to appear in court on cryptojacking charges on Tuesday
The US Attorney’s Office in Brooklyn has filed charges against Parks, who was arrested in Nebraska on April 13.
He is accused of wire fraud, money laundering and engaging in illicit money transactions.
Parks is scheduled to appear in federal court in Omaha on April 16.
According to the indictment, Parks set up multiple accounts at a subsidiary of “Company 1,” a cloud computing and consumer electronics company based in Seattle, Washington, and at “Company 2,” a company specializing in personal computers and related services based in Redmond, Washington.
From January to August 2021, Parks allegedly used various false identities, corporate affiliations, and email addresses, including those associated with companies he registered, such as MultiMillionaire LLC and CP3O LLC, to open accounts with those companies.
The indictment further states that Parks deceived and defrauded the cloud computing providers into granting him enhanced privileges and benefits, such as enhanced cloud computing services and deferred payment.
When the providers noticed suspicious data usage and unpaid subscription balances, Parks allegedly attempted to evade their investigations.
Prosecutors allege that Parks laundered some of the mined cryptocurrencies through Cryptocurrency Exchange 1, a decentralized company with no headquarters that also operates a payment processor, bank accounts, and a New York City-based nonfungible token (NFT) marketplace.
Parks avoided transactions over $10,000
To avoid federal reporting requirements for transactions over $10,000, Parks structured the payments in amounts just below that threshold.
Investigators discovered several cases in which he transferred amounts of $9,999 or less from the crypto exchange to a bank account.
Parks allegedly used the proceeds from the scheme to make extravagant purchases, including a luxury Mercedes Benz, jewelry, and first-class hotel and travel expenses.
“This arrest illustrates the power of law enforcement joining forces with the private sector to identify and track down cybercriminals and put an end to their sophisticated thefts,” said NYPD Commissioner Caban.
“As the threat landscape in this space continues to grow more complex and pervasive, the NYPD and our federal partners continue to deftly engage malicious actors, even as they employ new tactics.”
As reported, cryptojackinghas been on the risewith hackers increasingly targeting financial entities such as banks and trading houses.
In particular, it is common for cryptojackers to mine private cryptocurrencies such as Monero, which are commonly used by cybercriminals.
Due toMonero’s privacy featuresit has often attracted cypherpunks who advocate for privacy not offered by other cryptocurrencies.
