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Feds Nab Two Suspects in Alleged $550K Crypto-Fueled Scam

feds-nab-two-suspects-in-alleged-$550k-crypto-fueled-scam
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  • Two men have been charged with carrying out a nationwide cyber scheme.
  • The U.S. DOJ alleges the men stole, or tried to steal, more than $550,000 in cryptocurrencies.
  • The case comes in the wake of an uptick in cybercrime.

Two Massachusetts men were arrested on Thursday and charged with carrying out a nationwide scheme to steal people’s social media accounts and their cryptocurrency. 

According to the U.S. Department of Justice (DOJ), Eric Meiggs, 21, and Declan Harrington, 20, targeted at least 10 victims in the country. 

Meiggs and Harrington “allegedly stole, or attempted to steal, over $550,000 in cryptocurrency from these victims alone” using techniques such as SIM swapping, computer hacking, and other methods.

SIM Swapping 

SIM swapping is a method used by fraudsters to hack into various accounts and steal sensitive data, such as financial details related to cryptocurrency.

Generally, SIM swapping involves convincing cellular providers to reassign a victim’s phone number to an account on the cybercriminal’s phone.

Cybercriminals typically try to convince cell phone providers by offering legitimate reasons, such as claiming they have a new phone after their old one was lost or damaged. Sometimes they also attempt to lure an employee of a cellular carrier through bribery.

Once the switch is complete, cybercriminals hack into their victim’s accounts via bypassing security barriers like two-factor identification and reset their passwords. From there, cybercriminals go about accessing their victim’s cryptocurrency.

Cybercrime on the Rise

Since 2018, cases of SIM hijacking have become increasingly common. And the technique can impact anyone, regardless of wealth or influence.

Meiggs and Harrington allegedly targeted executives of cryptocurrency companies and those who had high value or “OG” (slang for “Original Gangster”) social media account names.

This isn’t the first time high-profile individuals have been targeted. In May, the engineering manager at cryptocurrency custodian BitGo, Sean Coonce, publicly revealed he was the victim of SIM hacking. 

According to Coonce in a tweet, hackers stole bitcoin worth more than $100,000 from his Coinbase account.

Source: Twitter

In the same month, the U.S. DOJ announced it had charged nine individuals who either participated or aided in stealing crypto worth over $2.4 million. The overall theft translated to an average haul of more than $345,000 for each attack.

Throughout 2018, blockchain analytics firm CipherTrace said that roughly $1.7 billion in cryptocurrency was stolen or scammed.

In February, a Boston man became the first-ever person to receive jail time for SIM Swapping in the United States. Joel Ortiz, a 21-year-old college student, pleaded guilty to stealing more than $5 million in cryptocurrency from 40 victims.

The Charges

Meiggs and Harrington are charged with 11 counts, including one of conspiracy, eight of wire fraud, one of computer fraud and abuse, and one of aggravated identity theft.

For now, both men are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

The case is still being investigated by the FBI and IRS Criminal Investigative Division.

This article was edited by Gerelyn Terzo.

Last modified: November 14, 2019 23:06 UTC