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

 

Defendant Allegedly Stole More Than $3.5 Million in Cloud Computing Services In Order to Mine Cryptocurrency

An indictment was unsealed charging Charles O. Parks III, also known as “CP3O,” with operating a large-scale illegal “cryptojacking” operation.  As part of the scheme, Parks defrauded two well-known providers of cloud computing services out of more than $3.5 million worth of computing resources in order to mine cryptocurrency worth nearly $1 million.  Parks was charged with wire fraud, money laundering and engaging in unlawful monetary transactions in connection with the scheme.  Parks was arrested on April 13, 2024 in Nebraska and is scheduled to make his initial appearance in federal court in Omaha on April 16, 2024.

Breon Peace, United States Attorney for the Eastern District of New York, James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Edward A. Caban, Commissioner, New York City Police Department (NYPD) announced the arrest and charges.

“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 engage in the old scheme of fraud and deceit.”

Mr. Peace expressed his appreciation to the FBI’s New York Cyber Crimes Task Force (CCTF) and the United States Attorney’s Office for the District of Nebraska for their assistance on this case.

“Charles Parks, also known as CP3O, allegedly created a cryptojacking scheme to defraud prominent cloud service providers of millions and illegally mine approximately $1M 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 Smith. 

“This arrest illustrates the power of law enforcement joining forces with the private sector to identify and track down cybercriminals, and to put an end to their sophisticated thievery,” stated NYPD Commissioner Caban. “While the threat landscape in this space is growing in complexity and depth, the NYPD and our federal partners continue to ably confront malicious actors even as they adopt new tactics.”

“Cryptojacking,” also referred to as malicious cryptomining, is the unauthorized use or hijacking of another party’s resources, such as electricity, hardware or computing power to mine cryptocurrency.  As alleged in the indictment, from in or about January 2021 through August 2021, Parks created and used a variety of names, corporate affiliations and email addresses, including emails with domains from corporate entities he operated called “MultiMillionaire LLC” and “CP3O LLC,” to register numerous accounts with the cloud providers and to gain access to massive amounts of computing processing power and storage that he did not pay for.  Parks used those fraudulently obtained resources to mine various cryptocurrencies including Ether (ETH), Litecoin (LTC) and Monero (XMR).  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. 

Parks converted and laundered the cryptocurrency proceeds through cryptocurrency exchanges, a non-fungible token (NFT) marketplace, an online payment provider, and traditional bank accounts, in order to disguise the audit trail and disassociate the funds from the fraud.  Parks also structured various money movements to avoid transaction reporting requirements under federal law.  After converting the ill-gotten cryptocurrency into dollars, Parks used the proceeds of the scheme to make extravagant purchases, including a Mercedes Benz luxury car, jewelry and first-class hotel and travel expenses.

The charges in the indictment are allegations, and Parks is presumed innocent unless and until proven guilty.  If convicted, Parks faces a maximum sentence of 20 years’ imprisonment on the wire fraud and money laundering charges and 10 years’ imprisonment on the unlawful monetary transactions charges.