Posted on: December 06, 2024 07:30 PM

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Nebraska man pleads guilty in multi million dollar cryptojacking case

Earlier today, in federal court in Brooklyn, Charles O. Parks III, also known as “CP3O,” pleaded guilty to wire fraud for operating a large-scale illegal “cryptojacking” operation.  As part of the scheme, Parks defrauded two well-known providers of cloud computing services out of more than $3.5 million worth of computing resources in order to mine cryptocurrency worth nearly $1 million.  The proceeding was held before United States Magistrate Judge Cheryl L. Pollak.  When sentenced, Parks faces up to 20 years in prison.

“Through fraud and deceit, Parks acquired powerful computing resources worth millions of dollars to fuel his illegal cryptomining operation,” stated United States Attorney Peace.  “Today’s guilty plea underscores our strong commitment to prosecuting criminal actors who enrich themselves through sophisticated cryptocurrency frauds and other complex cyber schemes.”

Mr. Peace also thanked the FBI’s New York Cyber Crimes Task Force for their assistance on this case.

“Cryptojacking,” also referred to as malicious cryptomining, is the unauthorized use or hijacking of another party’s resources, such as electricity, hardware or computing power to mine cryptocurrency.  According to court filings and facts presented at today’s plea hearing, from in or about January 2021 through August 2021, Parks created and used a variety of names, corporate affiliations and email addresses, including emails with domains from corporate entities he operated called “MultiMillionaire LLC” and “CP3O LLC,” to register numerous accounts with the cloud providers and to gain access to massive amounts of computing processing power and storage that he did not pay for.  Parks used those fraudulently obtained resources to mine various cryptocurrencies including Ether, Litecoin and Monero.  Parks tricked the providers into approving heightened privileges and benefits, including elevated levels of cloud computing services and deferred billing accommodations, and deflected inquiries from the providers regarding questionable data usage and mounting unpaid subscription balances.

Parks converted and laundered the cryptocurrency proceeds through cryptocurrency exchanges, a non-fungible token marketplace, an online payment provider and traditional bank accounts in order to disguise the audit trail and disassociate the funds from the fraud.  Parks also structured various money movements to avoid transaction reporting requirements under federal law.  After converting the ill-gotten cryptocurrency into dollars, Parks used the proceeds of the scheme to make extravagant purchases, including a Mercedes Benz luxury car, jewelry and first-class hotel and travel expenses.

From DOJ