A Nebraska man has been indicted on charges of wire fraud, money laundering, and engaging in unlawful monetary transactions for allegedly perpetrating a cryptojacking scheme that defrauded two well-known cloud computing providers of $3.5 million.
Charles O. Parks III, 45, of Omaha, was arrested on April 13 and is scheduled to appear before a federal court in Omaha on April 16.
TLDR
- Charles O. Parks III has been charged with wire fraud, money laundering, and engaging in unlawful monetary transactions for allegedly defrauding two cloud computing providers of $3.5 million to mine cryptocurrency.
- Parks allegedly created multiple accounts with the providers using fake names, corporate affiliations, and email addresses to gain elevated privileges and deferred billing accommodations.
- The alleged cryptojacking scheme consumed $3.5 million worth of computing resources to mine nearly $1 million in cryptocurrencies, including Ether, Litecoin, and Monero.
- Parks allegedly laundered the proceeds through cryptocurrency exchanges, an NFT marketplace, an online payment provider, and traditional bank accounts to disguise the audit trail.
- If convicted on all charges, Parks faces a maximum sentence of 50 years in prison.
According to the indictment unsealed on Monday, Parks created multiple accounts with the two cloud providers, one based in Seattle and the other in Redmond, Washington, using fake names, corporate affiliations, and email addresses.
He allegedly tricked and defrauded the providers into approving heightened privileges and benefits, including elevated levels of cloud computing services and deferred billing accommodations.
From January to August 2021, Parks allegedly used the cloud providers’ resources to mine nearly $1 million worth of cryptocurrencies, including Ether, Litecoin, and Monero.
The alleged cryptojacking scheme consumed $3.5 million worth of computing resources, underscoring the failed economics involved in the mining of most cryptocurrencies.
When the providers started inquiring about questionable data usage and mounting unpaid subscription balances, Parks allegedly deflected their inquiries.
He then allegedly laundered the proceeds through cryptocurrency exchanges, a New York City-headquartered NFT marketplace, an online payment provider, and traditional bank accounts to disguise the audit trail and disassociate the funds from the fraud.
Prosecutors claim that Parks structured the payments in a bid to avoid the $10,000 minimum transaction reporting requirements under federal law, with multiple instances of Parks moving $9,999 and smaller amounts from the crypto exchange to a bank account.
The indictment also alleges that Parks used the proceeds for extravagant purchases, including a luxury Mercedes-Benz, jewelry, and first-class hotel and travel expenses.
If convicted on all charges, Parks faces a maximum sentence of 50 years in prison.
Brooklyn U.S. Attorney Breon Peace stated that the Office will continue to prioritize prosecuting criminal actors who use new, sophisticated technology to engage in fraud and deceit.
