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Swedish Crypto Scammer Jailed for 15 Years in Gold-Backed Fraud

 

A citizen of Sweden was sentenced to 15 years in prison for manipulating a cryptocurrency scam claiming to pay investors based on the value of gold reserves.

Roger Nils-Jonas Karlsson, 47, and his firm, Eastern Metal Securities (EMS), were charged with a securities fraud, wire fraud, and money laundering in March this year after being prosecuted in the United States following his arrest in Thailand in 2019. Later, he was extradited. 

Karlsson claimed to operate an investment service based on cryptocurrency and investors who participated in EMS from 2012 to 2019 were offered a plan to buy stocks for less than $100 and ultimately realize a return equivalent to 1.15 kilograms of gold. In 2019, 1.15 kg of gold was worth more than $45,000. Today, its worth could be over $58,000.

To participate in the scheme, investors were asked to buy shares through cryptocurrencies: Bitcoin (BTC) and Ethereum (ETH). Moreover, merchants had been instructed that in case of the ‘unlikely’ occasion wherein the shares fail to attain their promised worth, participants would have 97% of their initial investment returned.

Karlsson ensured that EMS remained functional for the longest possible duration, he did so via frequent rebranding and issuing updates offering asset statements. Additionally, he misleadingly argued that paying out an unlimited sum all of sudden, would have a damaging impact on international monetary methods, and the company worked with the US Securities and Exchange Commission (SEC) to explain payment delays.

However, as is commonly the case with extreme return on investment, the promise was too good to be true. Investors found no profit, and instead, Carlson, who also used online aliases such as Steve Hayden, Euclid Deodoris, and Joshua Millard, sucked up cryptocurrencies and used the money to buy properties and a resort in Thailand. US prosecutors estimate that investors have been fooled for more than $16 million.

"Karlsson admitted he had no way to pay off the investors. Karlsson's fraud targeted financially insecure investors, causing severe financial hardship for many of them,” the US Department of Justice (DoJ) said.

In addition to the 15-year sentence, Karlsson has been ordered to forfeit the resort in Thailand, different properties, accounts, and has obtained a financial judgment of $16,263,820. Prosecutors also hope to secure restitution for past EMS investors and an order is expected in court within 90 days. 

Canadian Teenager Charged and Arrested for $50 Million Cryptocurrency Theft


Samy Bensaci, an 18-year-old teenager from Montreal, Canada has been indicted for 4 criminal charges in relation to a theft of cryptocurrency worth $50 million in a SIM-swapping scam that targeted cryptocurrency holders, as per the reportings by Infosecurity Magazine, dated 17th of January.

The Canadian authorities have accused the teen hacker of being a part of a hacking group that was involved in the theft of millions of dollars from Canadians and Americans. The scam, of which Bensaci was allegedly a part of, stole, "$50 million from our neighbors to the south and $300,000 in Canada" told Lieutenant Hugo Fournier, a spokesperson for the Sûreté du Québec.

Bensaci was charged and consequently arrested in November and was later released on CA $200,000 bail, on orders of living with his parents in Northeast Montreal, as per the local media reports. As a result of the incident, prosecutors prohibited Bensaci's access to any device that can be connected to the internet including computers, mobile phones, tablets, games, and consoles. Specifically from accessing, “any computer, tablet, mobile phone, game console, including PS3, PS4, Xbox, Nintendo Switch, or any other device capable of accessing the Internet”. He has also been ordered to hand over his passport to local police to assure he does not flee away from the country.

One of the purported victims Don Tapscott confirmed, “We can confirm that last year a hacker attempted to steal crypto assets from our company and its employees. That attempt was unsuccessful. We cooperated with the police [and] have been impressed with their determination to bring those responsible to justice.”

SIM swapping attack, also known as SIM jacking or SIM splitting is a form of identity theft where an attacker targets a weakness in two-factor authentication to take over an account. The attacker exploits a cell phone carrier's ability to port a phone number to a new device with a new SIM to acquire access to the victim's credit card numbers, bank accounts, and other financial information. The feature is normally used when someone loses access to his phone (or gets it stolen) or is switching service to a new device. As the reliability of customers on mobile-based authentication is growing, SIM swap attacks have also been on a rise in recent times.

Twitter to remove accounts of cryptocurrency scammers

Twitter is cracking down on cryptocurrency scammers and is taking steps to reduce the number of such scams. This comes after a number of accounts impersonated Elon Musk, Vitalik Buterin, and John McAfee to dupe users into sending them small amounts of cryptocurrency.

The impersonators would deceive other Twitter users by using tactics such as misspellings in the username or using the same or similar avatar to fool users.

They would tell followers to send them small amounts of cryptocurrency and would promise in return to send a bigger amount back.

In February, Buterin tweeted to his followers that if they sent him 0.1ETH, “I will send you nothing because I am too lazy.” Scammers, in reply, took the opportunity to ask users to send them small amounts of ethereum.


In response to the scammers impersonating Buterin, he took to Twitter to negate the rumours:


A Twitter spokesperson said, "We're aware of this form of manipulation and are proactively implementing a number of signals to prevent these types of accounts from engaging with others in a deceptive manner."