[April 15, 2024] Ars Technica: Alleged cryptojacking scheme consumed $3.5M of stolen computing to make just $1M

[MDCrabCakeFan86]

Ars Technica has reported that a Nebraska man has been indicted by federal prosecutors "on charges he perpetrated a cryptojacking scheme," if convicted on all the charges, this man faces up to 30 years in jail:

Alleged cryptojacking scheme consumed $3.5M of stolen computing to make just $1M

Indictment says man tricked cloud providers into giving him services he never paid for.

arstechnica.com

Federal prosecutors indicted a Nebraska man on charges he perpetrated a cryptojacking scheme that defrauded two cloud providers—one based in Seattle and the other in Redmond, Washington—out of $3.5 million.

The indictment, filed in US District Court for the Eastern District of New York and unsealed on Monday, charges Charles O. Parks III—45 of Omaha, Nebraska—with wire fraud, money laundering, and engaging in unlawful monetary transactions in connection with the scheme. Parks has yet to enter a plea and is scheduled to make an initial appearance in federal court in Omaha on Tuesday. Parks was arrested last Friday.

Prosecutors allege that Parks defrauded "two well-known providers of cloud computing services" of more than $3.5 million in computing resources to mine cryptocurrency. The indictment says the activity was in furtherance of a cryptojacking scheme, a term for crimes that generate digital coin through the acquisition of computing resources and electricity of others through fraud, hacking, or other illegal means.

If convicted on all charges, Parks faces as much as 30 years in prison.

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[Lump]

So the equivalent of hundreds of thousands of free GeForce Now subscriptions to run crypto software, like running a shady game on Steam that actually is a vessel for mining crypto, and then sends that crypto to someone - and somehow the software completely exit out for other user sessions? Really curious as to the services and logistics.

 

[MDCrabCakeFan86]

The term "cryptojacking" is used in the EDNY press release:

Nebraska Man Indicted for Multi-Million Dollar "Cryptojacking" Scheme

“As alleged, by hijacking cloud providers’ computing power, Parks stole millions worth of powerful computing resources to acquire cryptocurrency,” stated United States Attorney Peace. “This Office will continue to prioritize prosecuting criminal actors who use new, sophisticated technology to...

www.justice.gov

 

[riotous]

One based in Seattle the other Redmond. Wonder who those could be.

 

[Doskoi Panda]

So the equivalent of hundreds of thousands of free GeForce Now subscriptions to run crypto software, like running a shady game on Steam that actually is a vessel for mining crypto, and then sends that crypto to someone - and somehow the software completely exit out for other user sessions? Really curious as to the services and logistics.

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bruh that's wild

 

[Lump]

One based in Seattle the other Redmond. Wonder who those could be.

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Redmond probably means Microsoft or Amazon, maybe AWS hosting the first company's stuff.

 

[Akira86]

One based in Seattle the other Redmond. Wonder who those could be.

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is the cloud? obviously Nimbus.net and CloudYXNetwork

cryptojacking? why not cloudjacking?

 

[riotous]

Redmond probably means Microsoft or Amazon, maybe AWS hosting the first company's stuff.

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It's almost certainly Amazon (Seattle) and Microsoft (Redmond) I was just kidding around.

Still wonder how they did it. Maybe they used the free tiers of services across numerous accounts. Not sure if any have GPU compute though.

 

[Lump]

It's almost certainly Amazon (Seattle) and Microsoft (Redmond) I was just kidding around.

Still wonder how they did it. Maybe they used the free tiers of services across numerous accounts. Not sure if any have GPU compute though.

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Maybe asking CoPilot to mine some crypto 3 million times with the perfect engineered prompt

 

[yongeandcollege]

Alchemy lives...sort of...turning gold into lead.

 

[brawndolicious]

Alchemy lives...sort of...turning gold into lead.

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Steal the gold, turn it into lead....profit?

 

[Kraid]

Still wonder how they did it. Maybe they used the free tiers of services across numerous accounts. Not sure if any have GPU compute though.

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In one of the articles they say he was posing as like a reseller, and it allowed him to get access to more powerful compute. And then he just didn't pay the bills.

 

[cameron]

Looks like it was AWS and Azure.

Parks' scheme allegedly used a variety of personal and business identities to register "numerous accounts" with the two cloud providers and in the process acquiring vast amounts of computing processing power and storage that he never paid for. Prosecutors said he tricked the providers into allotting him elevated levels of services and deferred billing accommodations and deflected the providers' inquiries regarding questionable data usage in unpaid bills. He allegedly then used those resources to mine Ether, Litecoin, and Monero digital currencies.

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The defendant then allegedly laundered the proceeds through cryptocurrency exchanges, an NFT marketplace, an online payment provider, and traditional bank accounts in an attempt to disguise the illegal scheme. Once proceeds had been converted to dollars, Parks allegedly bought a Mercedes-Benz, jewelry, first-class hotel and travel accommodations, and other luxury goods and services.

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From January to August 2021, prosecutors allege, Parks created five accounts with the Seattle-based "on-demand cloud computing platform" using different names, email addresses, and corporate affiliations. He then allegedly "tricked and defrauded" employees of the platform into providing elevated levels of service, deferring billing payments, and failing to discover the activity.

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Within a day of having one account suspended for nonpayment and fraudulent activity, Parks allegedly used a new account with the provider.

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Prosecutors didn't say precisely how Parks was able to trick the providers into giving him elevated services, deferring unpaid payments, or failing to discover the allegedly fraudulent behavior. They also didn't identify either of the cloud providers by name. Based on the details, however, they are almost certainly Amazon Web Services and Microsoft Azure.

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Dude was smart enough to manipulate employees by social engineering, but dumb enough to dig himself into a criming / crypto hole.