1.  What Happened?
 It seems that the Criminal Assets Bureau (CAB) is facing a significant challenge in accessing €345 million in Bitcoin seized from Crumlin drug dealer Clifton Collins. The Bitcoin, originally valued at €53 million when seized in 2019, is locked away in 12 digital wallets, with the keys to access them reportedly missing.  Collins created 12 wallets for storing the bitcoin and recorded the codes, or digital keys, for each in a document. Collins decided it would be safer to disperse his growing fortune across multiple virtual wallets that hold the cryptocurrency. 

The Bitcoin was uncovered by the Garda after an operation targeting Collins (in 2019) when it was valued at €53 million. Garda has effectively been sitting on the asset, hoping advances in technology will lead to it being unlocked, it has soared in value to €345 million.

Collins – a 53-year-old former beekeeper – grew cannabis crops in rented houses and sold the harvested drug to criminals, including in his native Crumlin. He was apprehended in 2017 after a cannabis growing operation was discovered by chance  after years of operating under the radar. Gardaí on a routine patrol spotted a car parked at Military Road near Sally Gap in Co Wicklow in the early hours of the morning and went to check on it. Cannabis herb valued at €2,000 was found in the car, driven by Collins.

A subsequent investigation discovered he had been using three rented houses – in Galway, Meath and Longford – to grow cannabis. In the property in Galway, gardaí discovered a crop valued at €400,000 and Collins was later jailed for five years.

Eventually the Irish High Court ruled that the Bitcoin was derived from criminal activity. While Collins had handed over some Bitcoin and a code to a portion of his stash, the bulk remains inaccessible due to the lost key, which was hidden in a fishing rod that has since gone missing.  

Collins invested some of the proceeds of his drugs business in bitcoin, when it was worth only a fraction of its current value, in 2011 and 2012. As the virtual currency increased in value, Collins decided it would be safer to disperse his growing fortune across multiple virtual wallets that hold the cryptocurrency. The keys for the 12 wallets were written on documents and then hidden in a fishing rod case at one of his rented properties, in Co Galway. In interviews with gardaí he claimed he never saw the case again after a break-in at his home. However, a clear-out of the property after his arrest may also have resulted in the loss of the document.

In late 2020, Collins surrendered assets worth €1.2 million to the State as they were the proceeds of crime. They included €1 million in bitcoin, which he had the key codes for, as well as a two-seater Gyro aircraft, a camper van and a fishing boat.

Despite the value of the Bitcoin skyrocketing, CAB is hopeful that advances in technology will eventually allow them to unlock the wallets. In the meantime, they have liquidated other assets and sold accessible Bitcoin to benefit the state. Collins remains a significant case for the CAB, marking him as their largest financial loss to date. The outcome of this situation will depend on future technological developments or the recovery of the missing key.

Pursuing Bitcoin as the Proceeds of Crime is not new

The Chief Bureau Officer of CAB informed Irish media way back in October 2021 that CAB is targeting the seizure of cryptocurrencies, however, the value of cryptoassets can be difficult to realise.  Back then Detective Chief Superintendent Michael Gubbins said cryptocurrency plays a part in some of the assets that CAB has seized and while there is a substantial value to the cryptocurrency, "we just don't have the keys to get that".

2.  What’s interesting?

• For AML professionals, cryptocurrency is becoming a regulated 'asset class' under MiCAR, just like 'financial instruments' are under MiFID.  This means is will be more and more common for regulated firms to be doing business with crypto firms.  Firstly,  banning 'crypto' outright in a world where it is regulated will no longer an option. Secondly, care will need to be taken as part of the CDD to ensure that the source of the crypto is legitimate and that the counterparty/introducer is regulated in a trustworthy jurisdiction.
• It highlights the fact that despite access to high levels of resources and technology, law enforcement are not necessarily unable to break cryptography security measures of cold wallets.

Source:

• https://www.sundayworld.com/crime/irish-crime/cab-still-unable-to-access-350-million-in-bitcoin-seized-from-crumlin-dealer/a128832277.html
• ​https://www.irishtimes.com/crime-law/2024/10/09/bitcoin-seized-by-cab-soars-in-value-to-more-than-350m/
• https://www.rte.ie/news/business/2021/1015/1253984-value-of-seized-cryptocurrencies-difficult-to-realise/

Man charged over €6.5m cryptocurrency seizure in Dublin [August 8, 2024]

​1. Summary

• A man has appeared in court following the seizure of €6.5m (£5.6m) worth of cryptocurrency in County Dublin.
• The seizure was part of an investigation into the sale of illegal material on darknet markets and money laundering.
• The 23-year-old man is facing three counts of money laundering.
• Det Garda Ciaran Byrne from the GNCCB told the court that the suspect had been cautioned and arrested at Kevin Street Garda station, and had made no reply to the charges.
• The three money laundering charges are that on dates between March 2021 and September 2022 that he concealed and disguised the nature and source of 42 separate Binance transactions to the value of more than €34,000, knowing them to be the proceeds of criminal activity.
• Another charge relates to more than €22,000 worth of Wirex transactions whilst the final charge relates to the concealment of more than 1,800 Revolut transactions worth more than €227,000, knowing they were the proceeds of criminal conduct on dates between February 2021 and June 2024.
• The suspect was released on bail and is due to appear again in court on 3 October.

Written by a www.MoneyLaundering.ie Guest Contributor
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1.  Summary

• Gardaí have arrested 63 people as part of an operation with Interpol across 21 countries around the world.
• 17 people have been charged, while two cars have been seized, as well as €49,000 worth of goods believed to have been bought with stolen or laundered money.
• 17 bank accounts have been blocked under suspicion of being opened under false names.
• 37 searches were carried out, with 11 phones seized.
• €81,133 and $260,953 in cryptocurrency were also seized.
• Gardaí from Dublin, Kerry, Laois, Tipperary, and Galway were involved.

2.  What’s interesting

• Multiple Countries Involved: The operation spans 21 countries, which might indicate an international money laundering scheme or complex financial networks.
• Seizure of Goods and Cash: The seizure of €49,000 worth of goods and significant amounts of cryptocurrency (€81,133 and $260,953) suggests that illicit funds were being used for purchases and investments. This might indicate the laundering of large amounts of money.
• Blocked Bank Accounts: The blocking of 17 bank accounts under suspicion of being opened under false names points to possible identity fraud and efforts to conceal the true ownership and origins of funds.

Source
https://www.breakingnews.ie/ireland/63-people-arrested-in-operation-with-gardai-and-interpol-1650689.html

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Mark Scott was convicted in November 2019 of laundering a total of almost $400m in his role within One Coin pyramid scheme run by notorious 'Cryto Queen' Ruja Ignatova.

• An American lawyer who laundered $297million through Bank of Ireland accounts as part of a $3.35 billion cryptocurrency scam has been jailed for 10 years in the US.
• Mark Scott was convicted in November 2019 of laundering a total of almost $400 million in his role within One Coin pyramid scheme run by notorious 'Cryto Queen' Ruja Ignatova.
• Authorities said he had set up a number of bogus private equity investment funds called the Fenero Funds in the British Virgin Islands in 2015 because legitimate banks were unwilling to take Ignatova’s money.
• ​Scott then transferred money from OneCoin victims from the Fenero Funds via Ireland and the Cayman Islands.
• Court documents from the US state: “Between approximately May 2016 and July 2018, the Fenero Fund Accounts funded approximately €282,000,000 ($304,000,000) in wire transfers to a series of Fenero Fund bank accounts held at the Bank of Ireland in the Republic of Ireland.
• “At Ignatova’s direction, Scott subsequently transferred approximately €185,000,000 ($200,000,000) from the Bank of Ireland to the accounts of one of Ignatova’s other money launderers.
• “Through the use of the Fenero Funds, and the ensuing transfers, Scott successfully cleaned the funds, removing anyconnection to Ignatova or OneCoin and enabling Ignatova to move the funds where she pleased.”
• Bulgarian national Ignatova, who was the subject of BBC podcast The Missing Cryptoqueen, was sast seen in Dubai. She is currently one of the FBI’s Top Ten wanted fugitives, with a $250,000 reward for information leading to her capture.
• US Attorney for the Southern District of New York said: “Mark Scott, previously convicted at trial of laundering over $400 million of OneCoin proceeds for ‘Crypto Queen,’ Ruja Ignatova, used his law license as a means to participate in a massive money laundering scheme for a cryptocurrency that had no value since its inception.
• "Scott, an equity partner at a prominent international law firm, had boasted of earning ‘50 by 50.’ Indeed, Scott accomplished his goal, but by fraud and deception, and will now spend a decade in prison and has been ordered to forfeit all of his illegal proceeds.”
• Bank of Ireland employees were requested to testify as part of Scott’s trial, but declined. US authorities do not believe the Irish bank were aware of the nature of the scam and do not suspect them of any wrongdoing.

 

• www.irishstar.com/news/us-news/us-lawyer-launders-irish-bank-32020071

​

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Interesting #financialcrime typology for training purposes around 'easy money to be had' and the corruption of a younger 'technically savvy' generation.

In this case, Adam Gray, just 20 years old has been charged with 21 counts of unlawful use of a computer and attempted theft following an alleged #cryptocurrency fraud.

Readers might recall that a few years ago Conor Freeman (21) was jailed for role in $2 million cryptocurrency theft
identified by US Homeland Security as part of online group.  Freeman, jailed in Ireland, pleaded guilty to knowingly engaging in the possession of the proceeds of crime — namely 142.75682712 Bitcoin. Today (01 July 2023) that amount of bitcoin would be worth a hefty $4.35mn.

Not often is there media about dishonestly operating a computer “with the intention of making gain for yourself or another or causing loss to another”.  There is clearly more to the facts of this story than is currently in the public domain.  Mr Freeman was also charged with three counts of dishonestly operating a computer to make a gain.
Adam Gray, just 20 years old has been charged with 21 counts of unlawful use of a computer and attempted theft following an alleged cryptocurrency fraud. It is alleged that at a place unknown within the Ireland the accused dishonestly operated a computer, or caused it to be operated “with the intention of making gain for yourself or another or causing loss to another”.

Mr. Gray is also charged with five counts of attempted theft from different people, at locations in Dublin. The attempted theft charges related to a total of €1,249 while the amount of money alleged to have gone through the account was €8,136, the court heard.
​
Conor Freeman case (November 2020)

This is a very interesting case.  Freeman was jailed in November 2020. In addition to pleading guilty to knowingly engaging in the possession of the proceeds of crime — namely 142.75682712 Bitcoin, he also pleaded guilty to stealing $100,000 in cryptocurrency from Darran Marble on May 15th 2018, stealing cryptocurrencies with an approximate value of $1,921,335, from Seth Sharpiro on May 16th, 2018, and stealing cryptocurrencies with an approximate value of $167,622.22 from Micheal Templeman on May 18th, 2018.  He also entered guilty pleas to three counts of dishonestly operating a computer to make a gain on dates between May 15th and May 18th, 2018. He has no previous convictions.

•  Freeman was identified by the United States Department of Homeland Security as being the person behind certain internet handles connected to the offences.

• Freeman was part of a group of people who had met online. This group identified people on social media who they believed might have access to some amount of cryptocurrency.
• ​The group was able to gain access to the email addresses and phone numbers of these people via social media, which was information needed to commit the crimes.
• Freeman’s co-conspirators knew people who worked in telecommunications who would transfer the phone numbers of potential victims onto SIM cards purchased by the group.
• The co-conspirators would then initiate protocols that are in place in the event of people forgetting their passwords in order to gain access to the online accounts of potential victims.
• After his co-conspirators gained access to the email exchanges of these people, Freeman would go through these exchanges and identify sources of cryptocurrencies they possessed.
• The proceeds of the thefts would be split evenly between all parties who were involved. The court heard that there are five co-accused of Freeman who are before the courts in the United States.
• Freeman's lawyer said his client was “very much a loner” as a teenager who reverted to an online world. He said his client started out “hacking” other persons accounts during online games and that he did so not for monetary gain, but rather for the “thrill”.

Adam Gray links:

• https://www.independent.ie/irish-news/courts/man-accused-of-unlawful-use-of-computer-in-crypto-fraud/a235542840.html
• https://www.linkedin.com/posts/peteroakes_financialcrime-cryptocurrency-activity-7080843579216027648-qXyS

​
Conor Freeman link

• https://www.irishtimes.com/news/crime-and-law/courts/circuit-court/man-jailed-for-role-in-2-million-cryptocurrency-theft-1.4411641