A man has been charged by U.S. prosecutors with wire fraud and money laundering for allegedly defrauding two cloud computing providers in order to carry out a large-scale illegal “cryptojacking” operation. The accused, Charles O. Parks III, also known as “CP3O,” could face up to 50 years in prison if convicted. The Brooklyn U.S. Attorney’s Office stated on April 15 that Parks defrauded the two companies of $3.5 million in order to mine $970,000 worth of cryptocurrencies, including Ether (ETH), Litecoin (LTC), and Monero (XMR), using their resources without paying. Cryptojacking involves the unauthorized use of resources, such as computing power or electricity, to mine cryptocurrencies. Malware can be used to inject software that mines crypto and drains a small amount of resources from a network of computers. Parks was arrested in Nebraska on April 13 and charged with wire fraud, money laundering, and engaging in unlawful monetary transactions. He is set to appear before a federal court in Omaha on April 16. According to the indictment, Parks created multiple accounts with a subsidiary of “Company 1,” a cloud computing and consumer electronic device company based in Seattle, Washington, and “Company 2,” a company that produces personal computers and related services based in Redmond, Washington. From January to August 2021, Parks allegedly used fake names, corporate affiliations, and email addresses, including those from companies he registered, such as MultiMillionaire LLC and CP3O LLC, to create accounts with the companies. He then deceived the services into granting him elevated privileges and benefits, as well as deferred billing accommodations, the indictment claims. When the providers began to question the questionable data usage and mounting unpaid subscription balances, Parks allegedly avoided the inquiries. The indictment also alleges that Parks laundered some of the mined crypto through a decentralized cryptocurrency exchange and other funds through a payments provider, bank accounts, and a New York City-based nonfungible token (NFT) marketplace. He structured the payments to avoid the minimum transaction reporting requirements under federal law. Prosecutors claim to have found multiple instances of Parks transferring amounts just under $10,000 from the crypto exchange to a bank account. They also allege that Parks used the proceeds for extravagant purchases, including a luxury Mercedes Benz, jewelry, and first-class hotel and travel expenses. Brooklyn U.S. Attorney Breon Peace stated, “This Office will continue to prioritize prosecuting criminal actors who use new, sophisticated technology to engage in the old scheme of fraud and deceit.”
Federal authorities allege that a cryptojacker deceived cloud companies to mine cryptocurrency, resulting in a $3.5 million scam.