$230 million crypto scam one of largest single victim thefts in history, prosecutors say

WASHINGTON (CN) — Federal prosecutors told a federal judge Tuesday that a California man who faces criminal charges for stealing over $230 million in Bitcoin from a Washington victim helped execute one of the largest cryptocurrency thefts from a single person in American history.

According to the prosecutors, Jeandiel Serrano, 21, worked with co-defendant Malone Lam, 20, to pass themselves off as technical support staff for Google and Gemini Crypto Exchange to gain access to the victim’s account, acting as if they needed to assist with a security breach

The pair were charged with conspiracy to commit wire fraud and conspiracy to launder monetary instruments in September. If convicted, they face a maximum prison term of 20 year for either charge, with potential fines of $250,000 to $500,000.

In a status conference before U.S. District Judge Coleen Kollar-Kotelly on Tuesday, Serrano’s attorney, Paulette Pagán of firm Price Benowitz, indicated that she and the Justice Department were negotiating a potential plea agreement. Serrano had originally pled not guilty at his arraignment on Oct. 8.

According to the Justice Department in its memo in support of Serrano’s pretrial detention, after convincing the victim of their supposed legitimacy, they stole the individual’s savings, then laundered the virtual currency though multiple exchange platforms and professional money launderers.

Prosecutors described how an unnamed co-conspirator — known only as “swag” in a Discord messaging chat with Serrano and Lam — caused an “unauthorized Google account access” notification to appear on the victim’s devices in the week leading up to the Aug. 18 theft. The co-conspirator used virtual private network, or VPN, services to make the access attempts appear as if they were coming from overseas.

On Aug. 18, Serrano and Lam called the victim, posing as members of the Google security team, and told the individual they would have to shut down his account unless he verified certain information, prosecutors say. They managed to obtain just enough to access the victim’s Google drive, where they found personal financial information such as the location of his cryptocurrency holdings with Gemini.

Serrano then reportedly called the victim back, this time portraying himself as a Gemini support representative. Meanwhile, he and his co-conspirators messaged each other on Discord and Telegram, strategizing how to manipulate the man into providing private keys to his cryptocurrency holdings.

Screenshots provided in the Justice Department’s memo show Serrano reportedly proposing they tell the victim his private keys were involved in a leak and that he should conduct a Google search of his private key, which Serrano would be able to find after gaining access to the victim’s search history.

Instead, prosecutors say Serrano convinced the victim to download a remote access program onto his computer that gave Serrano real-time access to the individual’s desktop. While watching each move the victim made on his computer, Serrano manipulated him into opening files with private keys to over 4,100 Bitcoin, valued at $230 million, according to the Justice Department.

Before Serrano ended the call with the victim, his co-conspirators were reportedly able to quickly steal the entirety of the man’s cryptocurrency holdings.

Once they took hold of the Bitcoin, prosecutors say Serrano split the proceeds five ways between members of the conspiracy, and used it to fund a lavish lifestyle, with expensive rental homes in Miami and Los Angeles, luxury cars, private jets and international travel.

According to prosecutors, Serrano had begun renting a $47,500 per month rental home in Encino, California, meanwhile Lam was spending hundreds of thousands of dollars per night at Los Angeles night clubs and purchasing custom Lamborghinis, Ferraris and Porsches.

Following his indictment and arrest at the Los Angeles International Airport in September, Serrano indicated to FBI agents that he had received between $27 million and $32 million in proceeds from the theft and agreed to transfer a remaining $20 million to the FBI.

Lam was arrested shortly after Serrano after traveling from Los Angeles to Miami via private jet. At the time, he was renting two Miami mansions, had purchase a $2 million watch and a Lamborghini Revuelto for $1 million.

According to the Justice Department, at least $100 million remains unaccounted for.

Serrano has been the only member of the conspiracy to appear in federal court in Washington, after making his initial appearance in the Central District of California.

Lam has also made his initial appearance in the Southern District of Florida and is currently in transit to Washington.

Kollar-Kotelly tentatively scheduled another status conference in the case for Jan. 9, 2025, and suggested it could become a plea agreement hearing depending on how negotiations proceed.

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