TLDR
- DOJ charged 12 more people in a $263M crypto cybercrime operation
- Suspects allegedly stole 4,100 Bitcoin in a single heist from a Genesis creditor
- The mainly young defendants (aged 18-22) met through online gaming
- Stolen funds were spent on exotic cars worth up to $3.8M, private jets, and $500,000 nightclub tabs
- Money was laundered through mixers, peel chains, and hidden inside stuffed toys
The Department of Justice has charged 12 more people in connection with a cybercrime operation that allegedly stole over $263 million in cryptocurrency. The charges, announced by the U.S. Attorney’s Office for the District of Columbia along with the FBI and IRS Criminal Investigation, were unsealed Thursday in a four-count indictment.
The case centers around Malone Lam, 20, who was first charged in September 2024. Most of the suspects are young adults between 18 and 22 years old. Several have been arrested in California, while two others are believed to be in Dubai.
The group allegedly first met while playing online games before evolving into what prosecutors describe as a “cyber-enabled racketeering conspiracy.” They operated from at least October 2023 through March 2025.
According to the indictment, the suspects used various methods to steal cryptocurrency. These included hacking databases, social engineering attacks, and even physical break-ins to steal crypto hardware wallets.
From Online Gaming to Criminal Enterprise
The defendants each played specific roles in the operation. Some identified targets and hacked databases. Others posed as support agents to trick victims. A third group laundered the stolen funds.
One member, Marlon Ferro, 19, allegedly conducted physical burglaries to steal crypto wallets. This included a July 2024 break-in at a home in New Mexico.
In one major heist on August 18, 2024, the group reportedly stole over 4,100 Bitcoin from a Genesis creditor. This single theft accounted for over $230 million of their total haul.
The suspects went to great lengths to hide their tracks. They used virtual private networks, crypto mixer protocols, and “peel chains” to make the stolen funds harder to trace. A peel chain is a money laundering tactic where crypto is transferred through multiple wallets with small amounts removed at each step.
The case comes amid a broader surge in cybercrime. The FBI’s Internet Crime Complaint Center reported $16.6 billion in internet crime losses in 2024, up 33% from the previous year. Crypto-related fraud accounted for 149,686 complaints with losses totaling more than $9.3 billion.
Prosecutors say the suspects spent their illegal gains on a lavish lifestyle. They purchased at least 28 exotic cars, some worth up to $3.8 million each. They spent up to $500,000 in single nights at nightclubs.
Other expenses included private jet rentals, luxury homes in the Hamptons, Los Angeles, and Miami, and designer goods. They even hired private security guards and shipped bulk cash hidden inside stuffed Squishmallow toys.
The defendants face charges including RICO conspiracy, conspiracy to launder monetary instruments, and conspiracy to commit wire fraud. One 19-year-old defendant, John Tucker Desmond, is charged with obstruction of justice for destroying evidence.
The lead defendant, Lam, allegedly continued to direct operations even while in pretrial detention. Prosecutors say he instructed associates to deliver luxury goods to his partner.
Forfeited assets in the case include Lamborghinis, Ferraris, Rolls-Royces, designer clothing, watches, champagne, and a yellow teeth grill. The investigation remains ongoing, with support from FBI offices in Los Angeles and Miami.
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