The government said on Aug 18, the thieves 'executed one of the largest cryptocurrency thefts from a private individual' in US history, making off with 4,100 bitcoin valued at more than US$240mil (RM1.04bil). — Reuters
A Stamford man has been accused of scamming DoorDash food-delivery drivers across the country out of nearly US$1mil (RM4.46mil) with a phishing website.
A Darien college student was convicted of running a multimillion-dollar return shipping scheme.
A group from Florida is alleged to be connected with a Danbury kidnapping linked to a massive Bitcoin heist.
The series of crimes with ties to Connecticut reveals the sophisticated lengths technology can take fraudsters. But they also point toward a demographic trend: Younger people who grew up in the post-Internet age are more likely to be involved in digital crimes than those committed in-person, experts say.
Gen-Z, young people now in their teens and 20s, "spend significantly more time plugged in and connected to the Internet than previous generations did at that same age," said Adam Scott Wandt, an associate professor of public policy and deputy chair for technology at John Jay College.
With that higher level of exposure to technology compared with when Generation X or millennials were the same age, researchers are seeing two points of interest related to crime, according to Wandt.
The first is, "we're seeing that they are more likely to fall for online scams," compared to older adults, Wandt said.
The second is that, with increased exposure, "they actually commit less in-person crime, but more online crime than people – older generations – at that younger age," Wandt said.
US$1mil DoorDash scam
The case involving the man from Stamford, 22-year-old David Smith, saw hundreds of DoorDash drivers defrauded of their earnings some 3,000 miles (4,828km) away in California over the course of several years, according to court filings.
On Jan 5, 2023, Stamford police were called to an apartment after Smith was accused of assaulting a pregnant woman during a domestic violence incident, according to his arrest warrant. The victim allowed police to search the home so they could seize a firearm in Smith's possession, according to the warrant.
Police eventually found a handgun, but the search also turned up more than US$733,000 (RM3.3mil) in cash – some of it left in stacks out in the open – along with 118 payment cards, only one of which was in Smith's name, the warrant said.
Investigators determined the scheme involved Smith using one of multiple phones he had to place an order through DoorDash, a food delivery app, often from a California restaurant to an address near the eatery, the warrant said. After the driver picked up the order to be delivered, Smith would call them using an app that mimicked the DoorDash support number, the warrant said.
Claiming to be from DoorDash support service, Smith would inform the driver the order they were about to pick up had been placed with a stolen card, and that the driver's account therefore had been frozen, the warrant said. To resolve the issue, Smith would claim, the driver would need to verify their account, according to the warrant.
He then would send to the driver either a verification code or a link to a phishing website he had set up that mimicked DoorDash's site, according to the warrant. When the driver logged in to the phony site, their credentials would be sent to Smith, the warrant said. He then would log into their account and steal delivery money that had pooled in the driver's account, the warrant said. He then would tell the driver that, because of the issue, their paycheck would be late, causing a delay before the victim would realise their funds had been stolen, the warrant said.
The funds would be transferred to the payment cards in Smith's possession, which he'd use at "various" ATMs to convert the money to cash, the warrant said.
Financial records reviewed by investigators revealed Smith "may have successfully repeated this scam to over 700 DoorDash drivers," the warrant said. In total, he's alleged to have stolen "in excess of US$950,000 (RM4.24mil)," investigators wrote in the warrant.
"What this person did was abhorrent and should be punished to the fullest extent of the law," a DoorDash spokesperson said in a statement. "Millions of hardworking people dash everyday to reach their goals, and we're sickened that anyone would seek to steal their hard earned cash. We have worked with law enforcement, and will continue to support their every effort to ensure that justice is served."
The company said it sends regular communications to DoorDash drivers, called Dashers, and consumers reminding them to protect their accounts. It also offered tips to drivers and users to protect themselves, including never sharing personal information, creating a strong password and asking them to report suspicious activity immediately.
The court filing indicates Smith may have had help setting up or conducting the financial scheme.
In a statement to investigators, Smith said "they" were giving him websites, "indicating he was in unknown discussion with individuals who were assisting him in facilitating financial crimes related to the payment cards," the warrant said. Additionally, police also reviewed Smith's communications on Telegram, a social media and instant messaging platform. Under an account with the last name of "Dumbledor," Smith sent another user personally identifying information from victims, according to the warrant. The court filing notes that in addition to the DoorDash scheme, he also was "trafficking" personal information.
Last week, Smith rejected a plea offer from prosecutors that would have seen him serve five years in prison in the case. He also has a pending offer from a Superior Court judge, on which he has until Jan 8 to decide.
Online gang activity
Young people have used Telegram and other platforms to solicit help, even from rival gangs, to commit another common financial crime: mail check fraud, according to a Stamford police sergeant.
"The younger generation, is certainly more capable of manipulating those tools," said Sgt. Steve Perrotta, supervisor of the Stamford police financial crimes unit. "So we'll see a lot of fraudsters on Telegram advertising their ability to find checks and asking for people to utilise their accounts in order to conduct fraud."
In August, French authorities indicted Telegram's founder and CEO, Pavel Durov, alleging he was complicit in the trafficking of drugs and the spread of child abuse material. He has denied those allegations.
The people involved in the schemes on messaging platforms are brazen about what they're doing, said Perrotta, flashing money and using codes to signal what financial institutions they're seeking.
Members of rival gangs will even talk with each other on Telegram or other platforms, providing information to one another or working together, Perrotta said.
"Traditionally, if you have two gangs that are in an actual physical location, they're going to be battling for territory, battling for customers," he said. "That's the opposite of what we're seeing here on these different platforms. ... We're seeing gang different gang groups working together to try to assist each other in committing these frauds."
"I don't think technology is good or bad, it's how you use it," Perrotta said. "But it certainly creates significant opportunities for people to commit crimes that are much harder to detect and much harder to bring people to justice."
Shipping fraud scheme
In October 2023, a federal grand jury handed down an indictment charging Matthew Bergwall, who was a University of Miami student at the time, in a shipping fraud scheme.
The Darien resident was accused by prosecutors of carrying out a multimillion-dollar fraud targeting a "multinational shipping, receiving, and supply chain management company."
The company targeted has not been named in federal court filings. Authorities alleged Bergwall hacked into the accounts of five employees at the company for an app that was used to track pickups and deliveries, according to court filings.
"Bergwall and co-conspirators then used these accounts to submit false and fraudulent tracking information" for goods shipped by the company on behalf of retailers, court papers said. That allowed them to hang onto the goods – "high end electronics, jewelry, and designer clothing and accessories" – while also obtaining refunds.
Prosecutors said Bergwall offered the fake tracking scheme as a service for sale. They said he also used it himself to obtain expensive goods, including an electric skateboard for more than US$600 (RM2,676) and a pair of Reeboks for more than US$82 (RM365).
Bergwall pleaded guilty in July to mail fraud conspiracy. As part of his plea agreement, he agreed to help authorities investigate and prosecute others involved in the fraud scheme.
He awaits sentencing.
Danbury abduction linked to crypto heist
In August, a Danbury couple were out house-hunting in their Lamborghini when another vehicle rammed them.
A group of men, their faces obscured and armed with a baseball bat, grabbed the couple and threw them into the back of a rented van, police said.
The couple told police they had no reason for anyone to target them. But police later discovered the kidnapping may have been because of a massive cryptocurrency theft allegedly tied to the couple's son.
"At the time the kidnapping occurred, we did not know the son was involved – but we had an idea that he might have been because of previous police calls," Danbury police Detective Sgt. Steven Castrovinci said. He said the family had been "the victim of swatting calls due to (the son's) gaming."
In September, the US Attorney's Office for the District of Columbia announced charges against two men, both in their early 20s, who officials said conspired to steal US$230mil (RM1bil) in cryptocurrency from a victim in Washington.
The two men were identified as Malone Lam, 20, of Miami, Fla., and Los Angeles, and Jeandiel Serrano, a 21-year-old Singapore citizen from Los Angeles.
It's unclear whether the son of the couple kidnapped in Danbury has been charged, and the couple's names have been withheld in court documents.
Danbury police said Florida residents Angel Borrero, 23, Reynaldo Diaz, 22, Anthony Pena, 23, Josue Romero, 26, Ricardo Estrada, 21, and Michael Rivas, 18, were charged in the couple's kidnapping.
The government said on Aug 18, the thieves "executed one of the largest cryptocurrency thefts from a private individual" in US history, making off with 4,100 bitcoin valued at more than US$240mil (RM1.04bil).
According to prosecutors, Lam, Serrano and other conspirators posed as "Google and Gemini Crypto Exchange" support staff and convinced the victim to give them enough personal information to gain access to his Google Drive.
From there, the thieves "quickly located personal financial information, including the location of his virtual currency holdings with Gemini," which they quickly cleared out, a motion filed by the government seeking Serrano's detention said. The thieves then divided the cryptocurrency "five ways between members of this conspiracy" and used "sophisticated" money laundering techniques to cover their tracks, prosecutors wrote in the motion.
Despite living thousands of miles away at the time of his arrest, court documents say Serrano "has strong community ties in Bridgeport, Connecticut, where his mother, grandmother and minor sibling live."
Serrano's girlfriend was interviewed briefly by the FBI, the detention motion said. She claimed to not have any knowledge of Serrano's involvement with crime, and was told not to alert his associates, the court filing said.
She called them immediately after the interview, however, according to the court filing, and they attempted to flee in Miami.
The other conspirators "also deleted their Telegram accounts, which contained valuable evidence of the criminal conduct," the government's motion said.
"This single act shows the ease at which cyber-criminals can destroy evidence and obstruct justice when given even moment's notice," the document said. – Connecticut Post, Bridgeport/Tribune News Service
