DOJ cites $13 million crypto wallet fraud case

The U.S. Department of Justice said on May 11 that a federal grand jury in South Florida returned an indictment alleging a support-impersonation scheme that caused more than $13 million in cryptocurrency losses. Prosecutors charged Trenton Richard David Johnston, 19, of Canada, and Brandon Michael Tardibone, 28, of Miami, in what the department described as a fraud and money-laundering case. The government said Johnston overstayed his visa and remained in the United States unlawfully while operating in the Miami area. Investigators said additional victims are still being identified. ### Who did prosecutors charge, and where was the case filed? The Southern District of Florida said the indictment was returned by a federal grand jury in that district. Johnston is charged with conspiracy to commit wire fraud and conspiracy to commit money laundering, while Tardibone is charged with conspiracy to commit money laundering and harboring an alien in the United States, according to the Justice Department. (justice.gov) Miami was identified by prosecutors as the area where Johnston allegedly operated the scheme. The Justice Department said Tardibone knowingly harbored Johnston by providing lodging at a luxury Miami-area residence in an effort to evade immigration authorities. ### How did the alleged wallet thefts work? Court documents, as described by the Justice Department, say Johnston and other co-conspirators allegedly impersonated support representatives from a popular search engine and cryptocurrency-related companies. (justice.gov) Prosecutors said the goal was to gain unauthorized access to victims’ digital accounts and cryptocurrency wallets. Once access was obtained, the conspirators allegedly transferred victims’ cryptocurrency holdings for their own benefit, the department said. Bitcoin News, citing the DOJ announcement, reported the same core allegation: fake support contacts were used to obtain access and move funds out of victim wallets. ### What is the $13 million figure tied to? (justice.gov) Investigators estimate that victims suffered losses exceeding $13 million, according to the Justice Department’s May 11 statement. The department also said additional victims continue to be identified, which means the total alleged loss could change as the case develops. The $13 million figure in the public release is an estimate tied to victim losses, not a forfeiture amount or a sentence. (justice.gov) The indictment, as summarized by prosecutors, links that loss estimate to the alleged unauthorized access and transfers from digital accounts and crypto wallets. ### What does the government say happened to the proceeds? The Justice Department said Johnston and Tardibone are accused of laundering proceeds of the fraud scheme through financial transactions designed to conceal the nature and source of the funds. (justice.gov) The public release did not specify the names of exchanges or mixing services allegedly used. Prosecutors said the pair allegedly used more than $1 million in illicit proceeds to lease luxury vehicles, buy high-end jewelry and finance what the department called an extravagant nightlife and entertainment lifestyle. That allegation appears in the DOJ release tied to the indictment. ### Which agencies are investigating? Homeland Security Investigations in Miami is investigating the case, the Justice Department said. (justice.gov) The department said HSI was assisted by the Federal Deposit Insurance Corporation Office of Inspector General, Internal Revenue Service Criminal Investigation, U.S. Customs and Border Protection, and the Golden Beach Police Department. U.S. Attorney Jason A. Reding Quiñones for the Southern District of Florida and Acting Special Agent in Charge José R. Figueroa of HSI Miami announced the case, according to the release. ### What happens next in the case? If convicted, Johnston faces up to 20 years in prison on the wire-fraud conspiracy count and up to 20 years on the money-laundering conspiracy count, the Justice Department said. (justice.gov) Tardibone faces up to 20 years on the money-laundering conspiracy charge and up to 10 years on the harboring charge, according to the same release. The next public milestones are expected to come through filings and hearings in the Southern District of Florida. As of the Justice Department’s May 11 announcement, prosecutors were still identifying additional potential victims. (justice.gov)