US prosecutors have charged Charles O. Parks III with wire fraud and money laundering in connection with a large-scale illegal ‘cryptojacking’ operation, in which he allegedly defrauded two cloud computing providers of $3.5 million while using their resources to mine cryptocurrencies worth approximately $970,000. Parks, also known as “CP3O,” could face a maximum sentence of 50 years in prison if convicted. Parks was arrested in Nebraska on April 13 and is scheduled to appear before an Omaha federal court on April 16.
According to the indictment, Parks established multiple accounts with two cloud computing providers, using false identities, corporate affiliations, and email addresses associated with companies he registered, such as MultiMillionaire LLC and CP3O LLC. Parks deceived and defrauded the providers into granting him elevated privileges and benefits, and when they noticed suspicious data usage and unpaid balances, he attempted to evade their inquiries. Parks allegedly laundered the mined cryptocurrencies through a decentralized cryptocurrency exchange, a payments provider, bank accounts, and a New York City-based NFT marketplace.
To avoid federal reporting requirements for transactions exceeding $10,000, Parks structured the payments in amounts just below that threshold, transferring $9,999 or smaller amounts from the crypto exchange to a bank account. The proceeds from the scheme were used by Parks for extravagant purchases such as a luxury Mercedes Benz, jewelry, and first-class hotel and travel expenses. Parks’ arrest illustrates the collaborative effort between law enforcement and the private sector to identify and track down cybercriminals, putting an end to their sophisticated thievery. The NYPD and federal partners are actively confronting malicious actors, especially in the growing and complex cyber threat landscape.
Cryptojacking has been on the rise, with hackers increasingly targeting financial firms such as banks and trading houses. Cybercriminals often mine privacy cryptocurrencies like Monero, which are commonly used due to the privacy features that other cryptocurrencies lack. The rise in cryptojacking incidents highlights the need for enhanced cybersecurity measures to protect against unauthorized mining activities and combat cyber threats effectively. The use of deceptive tactics and false identities by criminals like Parks underscores the importance of ongoing collaboration between law enforcement and tech companies to prevent and prosecute such illegal activities.
The indictment alleges that Parks engaged in wire fraud, money laundering, and unlawful monetary transactions during the period from January to August 2021, using various accounts and false identities to deceive and defraud the cloud computing providers. Parks’ alleged use of elevated privileges and benefits granted by the providers for unauthorized mining activities enabled him to avoid detection for a significant period. The case serves as a reminder of the potential consequences that cybercriminals face when engaging in illegal cryptocurrency mining operations, as US prosecutors work to bring perpetrators to justice and combat the growing threat of cybercrime in the digital age.
