A man from Nebraska orchestrated an extensive “cryptojacking” operation that defrauded cloud computing service providers of more than $3.5 million in services, as announced by the U.S. Attorney’s Office on Monday.
Charles O. Parks III, aged 45, also known as “CP3O,” faces charges of wire fraud, money laundering, and engaging in unlawful monetary transactions related to the scheme, according to the U.S. Attorney’s Office for the Eastern District of New York. Parks was taken into custody on Saturday and is scheduled for an initial court appearance on Tuesday.
As per an indictment revealed on Monday, Parks illicitly obtained services from two prominent cloud computing providers to engage in cryptocurrency mining—a form of digital currency that operates independently of a central authority like a government or central bank. Prosecutors stated that Parks amassed over $970,000 in cryptocurrency, which he then laundered through various channels such as cryptocurrency wallets, exchanges, and bank accounts.
Parks could potentially face a maximum of 20 years for wire fraud and money laundering, along with an additional 10 years for the unlawful monetary transactions, according to the U.S. Attorney’s Office.
This arrest represents the most recent instance of cryptojacking, also known as malicious cryptomining, as highlighted by the U.S. Attorney’s Office. Cryptojacking involves covertly utilizing a victim’s device, whether a computer, tablet, or mobile phone, to mine cryptocurrency, as outlined by the New Jersey Institute of Technology.
The indictment revealed that between January 2021 and August 2021, Parks fabricated identities, corporate ties, and email accounts to register multiple accounts with cloud providers, granting him access to substantial computing resources without payment. By deceiving the providers into granting him enhanced privileges and benefits, Parks managed to mine various cryptocurrencies like Ether (ETH), Litecoin (LTC), and Monero (XMR) using the acquired resources.
Furthermore, Parks funneled the proceeds through cryptocurrency exchanges, traditional bank accounts, and a non-fungible token (NFT) marketplace to conceal the origin of the funds, according to prosecutors. By converting the cryptocurrency into dollars, Parks indulged in extravagant purchases, including a luxury car, jewelry, and high-end travel expenses.
The surge in cryptocurrency’s popularity has given rise to new forms of cybercrime, such as cryptojacking, which, unlike traditional malware, focuses on unauthorized cryptocurrency mining without causing data damage. This type of cybercrime can result in financial losses for targeted entities due to increased compute fees, as observed by Microsoft in July 2023.
Federal authorities have intensified efforts to combat cryptocurrency-related crimes, exemplified by the prosecution of individuals engaged in fraudulent activities involving cloud services and cryptocurrency mining.