Federal prosecutors have indicted a Nebraska man for defrauding two cloud computing providers of $3.5 million worth of computing capacity to generate just $1m in cryptocurrency.
The indictment charges Charles Parks III (known as CP30) of Omaha, Nebraska, with wire fraud, money laundering, and engaging in unlawful monetary transactions.
Prosecutors for the United States Attorney's Office of the Eastern District of New York accuse CP30 of "highjacking cloud providers' computing power" and stealing "millions worth of powerful computing resources to acquire cryptocurrency." In total, CP30 is said to have acquired $1 million in cryptocurrency for personal use.
“Criminals are becoming more adept at manipulating digital tools and hiding behind advanced technology, which often causes significant financial damage to their victims. The FBI is committed to the steadfast pursuit of those who attempt to develop innovative techniques to commit crimes,” stated FBI assistant director-in-charge James Smith.
United States Attorney Brian Peace said: "This Office will continue to prioritize prosecuting criminal actors who use new, sophisticated technology to engage in the old scheme of fraud and deceit.”
Cryptojacking, also known as malicious cryptomining, is the unauthorized use of others' resources including electricity, hardware, or computing power, to mine cryptocurrency.
The identity of the 'prominent' cloud computing companies impacted in this case has not been shared.
Company 1 is described as an electronic commerce, cloud computing, and consumer electronic device company that is headquartered in Seattle, Washington.
Company 2 is a "technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered in Redmond, Washington."
Company 1 was defrauded of $2.5m, while Company 2 of more than $969,000.
Amazon Web Services (AWS) is headquartered in Seattle, Washington, and Microsoft in Redmond, Washington, making these companies the cloud likely providers in question. DCD has reached out to both for confirmation.
According to the indictment, Parks conducted the cryptojacking scheme between January and August 2021 by creating several accounts with cloud providers using different names, corporate affiliations, and email addresses, in order to gain access to computer processing power and storage that he did not pay for. This was used to mine Ether, Litecoin, and Monero cryptocurrencies.
According to prosecutors, "Parks tricked the providers into approving heightened privileges and benefits, including elevated levels of cloud computing services and deferred billing accommodations, and deflected inquiries from the providers regarding questionable data usage and mounting unpaid subscription balances."
The cryptocurrency was then moved through crypto exchanges, a non-fungible token marketplace, online payment providers, and a traditional bank account to hide the trail. Proceeds were used to purchase a Mercedes Benz luxury car, jewelry, a first-class hotel, and to cover travel expenses.
Parks was arrested on April 13, 2024, in Nebraska, and will appeal in federal court in Omaha on April 16, 2024. Should he be convicted, Parks faces a maximum sentence of 20 years for the money laundering and wire fraud charges, and 10 years for the unlawful transactions.
Parks, according to his LinkedIn, is the owner and lead consultant of MultiMillionaire, LLC, where he dedicates his "expertise to empowering businesses with innovative technology solutions and high-performance digital marketing strategies."
He has over 100,000 followers on the social media platform.
