This week, money laundering schemes in the news range from the cutting-edge to the old-school, as a New York-based blockchain entrepreneur couple faced charges for laundering the proceeds of a record-breaking cryptocurrency theft; an Australian duo was imprisoned for fleecing online payroll systems; and an 80-year-old retired nun in Los Angeles will serve time for money laundering and fraud.
Find out more on these stories below.
US authorities charge blockchain entrepreneur couple in record crypto money laundering bust
The US Department of Justice has seized $3.6b (£2.69b) of bitcoin in its largest cryptocurrency theft case to date. The DOJ ‘s Deputy Attorney General Lisa Monaco announced on Tuesday 8 January 2022 that two people face charges of money laundering and fraud. The case is linked to the 2016 Bitfinex hack.
The two standing accused are New York-based Ilya "Dutch" Lichtenstein, the 34-year-old founder of a blockchain start up, and his wife, Heather Morgan, a 31-year-old blockchain entrepreneur, artist, and rap musician with a tempestuous social media presence. The allegations against them include:
- Conspiracy to launder 119,754 from the Bitfinex hack through a digital wallet linked to Lichtenstein
- Transferring 25,000 stolen bitcoins through a sophisticated money laundering process from Lichtenstein’s digital wallet into the bank accounts of both him and Morgan
Describing how authorities traced the pair through their digital footprint, Ms Monaco thanked “the meticulous work of law enforcement, [and] the department once again showed how it can and will follow the money, no matter what form it takes."
The couple have posted bail separately on bonds worth $8m (£5.98m) in total, with strict conditions until trial. If convicted, they face sentences of up to five years for fraud and up to 20 years for money laundering.
Read more on this story at Reuters.
Australian hacker couple jailed for multiple online financial crimes
The Adelaide District Court in South Australia has sentenced Jason Bran Lees, 34, and Emily Jane Walker, 29, to custodial prison terms for their role in a sophisticated computer hacking scheme which targeted online payroll management systems.
The scam targeted 23 or more companies of all sizes and types, including charities, between July 2018 to February 2020, and netted them a total of AUS$1.15m (£610,000).
Upon their arrest in February 2020, police discovered 7000 stolen identity documents used to open fake bank accounts through which hacked funds could be laundered via cryptocurrency, although some of their attempts were thwarted by automated anti-fraud systems.
The couple subsequently pleaded guilty to several crimes, including keeping a computer virus with which to commit online offences, and deceitful use of documents.
They claimed that the stolen funds were used to sponsor their respective methamphetamine addictions. Lees added that he often offended in a “drug haze”, an assertion which Judge Joanne Tracey rebuked, observing that his crimes were “sophisticated”. She elsewhere noted that the damage the pair had caused to many victims was “devastating”.
Lees will serve a minimum of five years of his eight-year sentence, while Walker will spend at least two years of her five-year term in prison.
Read more on this story at ABC News.
LA court jails ex-Nun who embezzled funds from her school for wire fraud and money laundering
A U.S. Federal Court sentenced a retired nun to one year in federal prison after she embezzled $835,000 (£623,660) from St. James Catholic School in Los Angeles during her time as its principal. She has also been ordered her to pay back the redirected funds.
Eighty-year-old Mary Margaret Kreuper admitted in a July 2021 plea deal that between 2008 to 2018 she embezzled payments intended for tuition, fees, and charitable donations for the elementary school.
Kreuper, who was St. James’ principal for 28 years and had taken a vow of poverty, explained that the offenses were committed to finance credit cards and gambling trips.
The Central District of California Attorney’s Office stated that she deceived the school’s Administration into believing its funds and assets were well-managed, exerting total control of the credit union accounts St. James kept to provide services and pay staff. This enabled and concealed the sustained embezzlement.
Prosecutors claimed that if annualised, the amount she stole was the “equivalent of the tuition of 14 different students per year”. They also referred to one parent’s letter to the court which stated that during the period of her offending, Kreuper had said there was “no money for an awning at school and no money for field trips.”
Read more on this story at AP News.
Find out how to improve your AML processes with award-winning technology.