International criminal who laundered millions in cryptocurrency sentenced to 11 years in US prison

Key Takeaways

  • United States Federal court sentances man to 11 years imprisonment for money laundering
  • The sentenced criminal used cryptocurrencies to wire the stolen funds globally
  • Increasing cybercrimes and money laundering activities warrent proper reuglations

YEREVAN (CoinChapter.com) — In an attempt to curb cryptocurrency cybercrimes, a United States federal court sentenced a Canadian-American dual citizen to over 11 years (140 months) in prison.

According to information provided by the U.S. Department of Justice, convict Ghaleb Alaumary laundered tens of millions of dollars for cybercriminals in various parts of the world. 

As per the report, Alaumary and his network “siphoned tens of millions of dollars from multiple entities and institutions across the globe.”

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Alumary pleads guilty of cybercrimes including cryptocurrency 

The defendant Ghaleb Alaumary pleaded guilty on two counts of money laundering charges.

For his crimes in 2020, the US federal court asked him to pay $30 million in restitution to victims. That is over and above the 11-year prison sentence that he must carry, with an additional three years of supervised release after that.

The first case accused Alaumary of conspiring with others to trick a Canadian university into paying them CAD$11.8 million (approximately $9.4 million). The criminals had pretended to be from a construction company that had completed a major project with them.

The second instance accused Alaumary of recruiting and organizing individuals to withdraw stolen cash from ATMs, which he then laundered through wire transfers, cash withdrawals, and exchanging the funds for cryptocurrency. 

As a professional money launderer, he worked with a secret base of clientele that conned banks headquartered in India, Pakistan, and Malta, as well as companies in the United States and the U.K., individuals in the United States, and a professional soccer club in the U.K. In the process, Alumary also worked with North Korean hackers.

“International money launderers provide critical services to cybercriminals, helping hackers and fraudsters to avoid detection and hide their illicit profits,”

Assistant Attorney General Kenneth A. Polite Jr. said.

Alumary’s co-defendant Uchechi Ohanaka was sentenced to 125 months imprisonment followed by five years of supervised release in 2019.

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Cybercrimes involving cryptocurrencies increase 

Earlier this year, the US Department of Justice arrested a dual Russian-Swedish national on criminal charges related to a self-operated Bitcoin money-laundering service on the darknet.

The accused, Roman Sterlingov, allegedly ran a cryptocurrency mixer, obscuring the trail of crypto ownership by joining it with other people’s holdings. This way, it becomes harder to trace laundered money.

Man who laundered millions of dollars in cryptocurrency for cybercriminals has been sentenced to 11 years in prison in the United States
Report of criminal cryptocurrency transactions by Chainanalysis

According to the Chainalysis 2021 Crypto Crime Report, in 2019, illegal activity represented roughly $21.4 billion worth of crypto transfers.  

In 2020, the criminal share of all cryptocurrency activity fell to $10.0 billion in transaction volume.

In addition, hackers successfully targeted crypto websites like the Poly Network, Ethereum, and Coinbase in the past months.

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Officials worry about Cryptocurrency misuse in attacks

As cryptocurrencies get misused for illicit activities, lawmakers get increasingly worried.

Senate Homeland Security and Governmental Affairs Chairman Gary Peters launched an investigation into the connection between cryptocurrencies and ransomware attacks. Speaking to CNN, the senator claimed “Cryptocurrencies are the medium of choice” by the cybercriminals.

The Reserve Bank of India (RBI) banned cryptocurrencies in the county in 2018 on misuse. It coincided with Government’s fears that terrorists would use digital assets to fund their activities.

The Supreme Court of India later struck down the RBI ban in March 2020 after organizations challenged it. 

In February, US Treasury Secretary Janet Yellen called the “misuse” of cryptocurrencies such as bitcoin “a growing problem” a month after taking office. 

With growing cases of cyber-attacks and criminal activities, the regulation of the crypto industry has become an utmost urgency. 

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