Business 24 May 2018

Erik Gibbs

Israel seizes 1,000 BTC in $8M money laundering case

I sometimes wonder how criminals concoct their schemes. Do they sit home at night watching reruns of The Simpsons while trying to create a new fraud? Just like the clumsy cartoon character Bart, they almost always get caught. In the latest example, an Israeli citizen, Hilmi Git was indicted last Monday on charges of using hundreds of credit cards in 20,000 fraudulent transactions, and then laundering the money using BTC.

In the indictment filed in Tel Aviv, Git is alleged to have used more than 800 credit cards to make more than $280,000 worth of purchases. Git is also being accused of laundering upwards of $8 million over 10 years, all of which was stored in a BTC wallet. The amount, approximately 1,071 BTC, was seized by the state pending the outcome of the trial.

The state prosecutor claims that Git set up a number of websites and forums in order to facilitate credit card fraud through a criminal network, instruct others how to conduct cyber theft, conduct money laundering operations and defraud those that visited the websites. In one scam, he was supposedly selling inexpensive cell phones through a site, according to authorities. Once a user made a purchase, he blocked the user, took over the profile and posted messages on forums and message boards that supposedly gave high reviews. In this way, he was able to lure in more victims and perpetuate the fraud.

Git, through his website, was also offering free and premium memberships to clients who bought access to credit cards. He published instructions on the site that guided users through the hacking process, as well as provided tools for the hack itself. According to the Israeli media outlet Calcalist, Git was quoted as saying, “We are thieves. Anywhere we can take money, we’ll take it, whether it’s from Israel, the U.S., or even the moon.”

The seizure of Git’s crypto wallet marks the first time in the history of Israel that BTC funds have been confiscated by police. It also could set a precedent, if he’s convicted, in the country for the legal seizure of crypto assets.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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