Californian pleads guilty in $263 million cryptocurrency theft case

Key poiyns:

• Kunal Mehta admitted to participating in a scheme to steal $263 million in cryptocurrency.
• He helped launder at least $25 million and registered exotic cars to shell companies.
• Mehta is the eighth member of the group to plead guilty.

Kunal Mehta, 45, of California, pleaded guilty to participating in a multi-state scheme that stole cryptocurrency through social engineering. The US Attorney General reported that Mehta, known by the aliases “Papa,” “The Accountant,” and “Shrek,” pleaded guilty to RICO charges and laundering $25 million, becoming the eighth defendant to plead guilty in the case.

The scheme had been operating since at least October 2023 and involved participants from several states. The group used phishing techniques, fake numbers, and equipment hacking to steal cryptocurrency from victims across the country. According to the investigation, one of the largest incidents was the theft of more than 4100 BTC from a victim in Washington, valued at $263 million at the time.

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How the scheme worked

The investigation established that Mehta was responsible for laundering the funds. He converted the stolen cryptocurrency into cash with a 10% fee, created shell companies, and made bank transfers through them, masking the origin of the funds. According to the prosecutor’s office, Mehta also helped participants in the scheme register exotic cars to shell companies to conceal their value and ownership.

The investigation revealed that the participants spent the stolen crypto assets on luxury goods: parties costing up to $500 000 per night, premium watches and jewelry, villa and private jet rentals, and a fleet of 28 exclusive cars, including Lamborghinis, Ferraris, McLarens, and Rolls-Royces.

“We are committed to rooting out fraud and holding those responsible fully accountable,” said US Attorney Jeanine Ferris Pirro.

The FBI and IRS-CI are working on the case with the US Attorney’s Office for the District of Columbia. Law enforcement officials are reminding citizens about the prevalence of cryptocurrency fraud and urging them not to share personal information or confirmation codes with unknown individuals.

Recently, in the US, 39-year-old Shengsheng He was sentenced to 51 months in prison for participating in a $37 million money laundering scheme through Axis Digital and banks in the Bahamas. He converted investors’ money into USDT stablecoins and sent them to the organizers in Cambodia.

Also in Australia, during a joint operation, the Federal Police and the FBI arrested 55 people and brought about 800 charges. Authorities seized $37,9 million worth of crypto assets, uncovering a large-scale international network operating through the encrypted AN0M app. The investigation revealed that the criminal group was involved in drug trafficking and money laundering.