TL;DR Breakdown
- The FED has ordered a crypto hacker, Ahmad Wagaafe Hared, to return $5.2 million in stolen Bitcoin and a BMW i8 purchased with the stolen BTC.
- The crypto hacker used SIM swapping, where Hared’s alleged team transferred the designated phone number to their own devices.
- The case is tied to that of Anthony Francis Faulk, who defrauded 11 victims of more than $3.4 million.
Description
In a case that exemplifies the murky intersection between cutting-edge technology and traditional criminal justice, federal authorities are pursuing a teenage hacker accused of stealing millions of dollars in Bitcoin. The officials are not only seeking the return of $5.2 million in stolen crypto but have also set their sights on a high-end sports car, … Read more
In a case that exemplifies the murky intersection between cutting-edge technology and traditional criminal justice, federal authorities are pursuing a teenage hacker accused of stealing millions of dollars in Bitcoin. The officials are not only seeking the return of $5.2 million in stolen crypto but have also set their sights on a high-end sports car, the hacker purportedly purchased with the ill-gotten gains.
Teen hacker at odds with the Fed
According to a report from The San Francisco Standard, a federal magistrate issued an order last week requiring Ahmad Wagaafe Hared to return $5.2 million in stolen Bitcoin from 2016. Between 2016 and 2018, Hared and two co-conspirators stole the Bitcoin and the vehicle as part of a SIM-swapping conspiracy.
SIM-swapping happens when a hacker deceives a cell phone operator into handing over control of a target’s cell phone by posing as the phone’s owner. The method is a typical social engineering tactic used by hackers to gain access to personal data in order to steal from their targets—or to circumvent text-message-based second-factor authentication procedures.
In 2016, Ahmad Wagaafe Hared was a teenager living in Tucson, Arizona. Hared allegedly targeted victims in Northern California, so his case is being heard in the federal court in San Francisco.
Although it is unclear which Northern California executives the hacker targeted, the Bay Area has long been a center for crypto startups. According to Crunchbase, hundreds of crypto organizations have called the region home, including the crypto exchange Coinbase, which formerly had its headquarters in San Francisco and is now leasing space in Mountain View.
According to independent cybersecurity correspondent Brian Krebs, Harred was a well-known user of the so-called darknet under the alias ‘winblo’. Using this alias, Harred was said to have been “extremely active” and “revered” on an online marketplace where purchasers bought highly sought-after social media accounts.
How did the crypto hack go down?
According to prosecutors, Hared and his accomplices initially obtained the personal contact information of crypto executives and investors. Then, they allegedly contacted mobile service providers and convinced company representatives they were the legitimate owners of the targeted phone numbers.
Hared’s alleged team would then transfer the designated phone number to their own device, a practice known as SIM swapping.
Prosecutors stated in a 2019 indictment that Hared, and his co-conspirators gained access to victims’ email and other accounts by obtaining their phone numbers. Hared and his team ultimately used their access to these accounts to force their way into the crypto wallets of their victims and drain them.
Harred reportedly paid approximately $150,000 for a BMW i8 using some of the stolen funds.
The scheme appeared profitable. According to reports, on Friday, a federal judge in San Francisco issued a preliminary order of forfeiture authorizing the government to seize 119.8 Bitcoins from Hared, which are presently worth $5.2 million. Hared must also surrender 93,420 Stellar Coins, valued at $11,770, and a 2017 BMW i8, which would fetch approximately $60,000 on the used car market.
Hacker yet to be sentenced
According to the order, Hared entered into a plea agreement in 2019, but many of the case’s documents remain under seal, and the agreement is not public. Hared was initially accused of a number of crimes in January 2019, including computer-related fraud, identity theft, and extortion.
Prosecutors informed Hared’s judge that the criminal case of Anthony Francis Faulk was related, although court documents do not clarify the relationship.
According to the Department of Justice, Anthony Francis Faulk was sentenced to 36 months in prison and ordered to pay nearly $3 million in restitution for his role in a conspiracy to defraud more than a dozen cryptocurrency owners. This was announced by United States Attorney Ismail J. Ramsey and FBI Special Agent in Charge Robert K. Tripp.
The sentence was handed down by the Honorable William H. Orrick, District Judge of the United States. In addition, the court ordered the forfeiture of numerous assets that comprised or were derived from the criminal proceeds obtained by Faulk.
Prosecutors allege that Faulk’s scheme defrauded 11 victims of more than $3.4 million. Faulk was ordered to pay restitution of $2,816,433 to 11 victims of the scheme. Faulk was charged in a distinct criminal case, pled guilty to one count of conspiracy to commit money laundering, and was ordered to pay restitution to two additional victims.
The court also ordered the forfeiture of several assets seized by the government that were either proceeds of the conspiracy or were derived from them. These assets consist of a nearly $1 million home in Latrobe, Pennsylvania; three J.P. Morgan Chase accounts totaling approximately $12,525,592, $6,242,919, and $18,118; a 2018 Mercedes-Benz GTS; a 2018 Nissan Rouge; a 2019 Chevrolet Silverado K1500; diamond jewelry; a Rolex; Tiffany earrings; and a Louis Vuitton handbag and wallet.
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