Authorities in Texas have intercepted more than $300 million in cash and cryptocurrency, the illegal proceeds of business email phishing and online romance scams that were subsequently laundered in a worldwide operation, the Department of Justice reports.
“These defendants orchestrated highly organized and sophisticated schemes to launder fraud proceeds through cryptocurrency,” said US Attorney Brit Featherston, after court documents were unsealed announcing that Operation Crypto Runner had led to the arrest and charging of 21 suspects who allegedly helped to con thousands of victims, many of them elderly, out of their money over the internet.
“Today’s announcement sends a clear message that money laundering networks that service fraud schemes targeting American victims, especially the elderly, will not be tolerated, and those operating such networks will be held accountable,” added Featherston.
“By acting as domestic money launderers for foreign co-conspirators, these defendants played indispensable roles that allowed foreign actors to reach from overseas to target victims in communities across the United States.”
Intriguingly, many of the alleged and convicted accomplices named by Operation Crypto Runner as working on US soil were themselves elderly.
One of the accused, Zenobia Walker, 65, of Maryland, was sentenced to 18 months in November after pleading guilty earlier this year to handling cash deposits hoodwinked from romance scam victims, rerouting the money through personal bank accounts and converting it into cryptocurrency. Between 2019 and 2020, Walker converted more than $300,000 on behalf of her accomplices in this manner.
Another pair of suspects, Randall Rule, 71, of Nevada, and Gregory Nysewander, 64, of California, allegedly converted the illicit proceeds of romance and business email compromise (BEC) into cryptocurrency. BEC scams occur when crooks target specific employees of companies and other organizations, tricking them into giving away sensitive data such as system passwords, which can then be used by other cybercriminals to target victims.
Operation Crypto Runner also managed to haul in some younger suspects. John Khuu of San Francisco, 27, stands accused of selling counterfeit pharmaceuticals on forums on the dark web – a murkier corner of the internet popular with hackers and cybercriminals – accepting payments in Bitcoin and other forms of cryptocurrency. He and his accomplices allegedly then laundered the proceeds, which exceeded $5 million.
Operation Crypto Runner also uncovered tech fraud schemes, whereby suspects would allegedly set up shell companies to appear to be legitimate service providers, conning victims into making deposits of funds under false pretenses.
Further inquiries stemming from the operation are being conducted by the US Secret Service, the Postal Inspection Service, as well as federal authorities in the Eastern District of Texas.
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