Yet another case of alleged cryptocurrency fraud has been unsealed at a federal court in the Southern District of New York this week. It would seem the authorities there are hellbent on sending a message to cyber thieves of all kinds.
The third case to be announced by the court in as many days involving digital assets concerns an alleged father-and-son team who are accused of stealing some $10 million in crypto funds from around 20 victims.
Eugene Austin, 60, of Port Jefferson, New York, is accused of running fake cryptocurrency investment schemes between 2018 and 2021. His son, Brandon, 27, of Coram, New York, entered a guilty plea in April this year, which was revealed by the US Department of Justice (DoJ) on July 12th.
Eugene, aka “Hugh,” was arrested on July 5th. Cybernews understands he has, at the time of going to press, entered no such plea.
“This is the third case we are announcing this week to shed light on fraud in the cryptocurrency and digital asset ecosystem,” said US Attorney Damian Williams.
“As alleged, the father-son duo of Hugh and Brandon Austin engaged in a cryptocurrency fraud and money laundering scheme that victimized both sophisticated and novice cryptocurrency investors alike out of millions of dollars.”
Williams further claims the pair used the stolen money “to fund a lavish lifestyle of travel, luxury hotels, and fancy restaurants.”
Federal authorities allege the two falsely offered to broker sales of “large quantities of cryptocurrency” at cut-price rates with unusually high returns, as well as pretending to offer marketing and advertising services to small businesses.
In one alleged case cited by the DoJ, they are said to have tricked an employee of a California company in August 2018 into wiring them $5 million via an attorney in Manhattan for a cryptocurrency investment that did not exist.
In another, they are accused of having hoodwinked a firm based in New Jersey and Hong Kong in January 2019 into sending $4 million for a similar bogus investment, this time via a lawyer in Georgia.
And a firm in Japan was allegedly bilked to the tune of $600,000 for marketing and fundraising services that never materialized.
Eugene, who was arrested on July 5th, faces up to 20 years in prison on wire fraud charges if convicted, and is also looking at up to another ten for allegedly laundering criminal proceeds.
His son, Brandon, having already pled guilty, has agreed to forfeit nearly $3.5 million and pay restitution to victims of around $2 million on top of that. He also had to relinquish a 2022 E-Pace P250 Jaguar he bought with his ill-gotten gains.
Despite his confession, he is, in theory, facing the same maximum jail terms as his father if convicted — although the presiding judge will likely take his guilty plea into account when passing sentence.
Whatever the outcome, the US feds appear determined to show unwavering commitment to tackling cryptocurrency-related cybercrime — especially in New York.
A spokesman for the city’s field office for Homeland Security Investigations (HSI) said: “The charging of Hugh and Brandon Austin reflects our ongoing commitment to thwarting individuals involved in all types of financial crimes, especially those that affect the digital environment and subsequently impact the security of our economy.”
He added: “HSI commends the prosecutorial team at the Southern District of New York’s Complex Frauds and Cybercrime Unit for their unwavering support.”
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