Treasury Secretary Steven Mnuchin imposed sanctions Wednesday against two Russian hackers accused of stealing millions of dollars worth of cryptocurrency through an elaborate phishing scheme. Photo by Kevin Dietsch/UPI | License Photo
Sept. 17 (UPI) -- In a coordinated action of the Justice, State and Treasury Departments, the Trump administration blacklisted two Russian nationals who are accused of conducting an online phishing scheme to steal nearly $17 million in cryptocurrency.
The Treasury Department identified the two men as Danil Potekhin, 25, of Voronezh, and Dmitrii Karasavidi, 35, of Moscow, stating in a release that they were sanctioned Wednesday for conducting a sophisticated phishing campaign in 2017 and 2018 that targeted users of one foreign-based and two U.S.-based currency exchanges to steal $16.8 million from their users.
The pair are accused of creating websites to mimic those of the actual currency exchanges to obtain the personal identification of the online services' users, which the men used to gain access to hundreds of legitimate accounts.
"The individuals who administered this scheme defrauded American citizens, businesses and others by deceiving them and stealing virtual currency from their accounts," Treasury Secretary Steven Mnuchin said.
The Treasury accused Potekhin of creating the numerous spoofed web domains while Karasavidi is accused of laundering the ill-gotten gains by attempting to conceal their origins through a layered and sophisticated use of multiple accounts and multiple virtual currency blockchains.
"Ultimately, the stolen virtual currency was traced to Karasavidi's account, and millions of dollars in virtual currency and U.S. dollars was seized in a forfeiture action by the United States Secret Service," the treasury said in a release.
The U.S. Justice Department on Wednesday also unsealed a superseding indictment returned by a San Francisco grand jury that describes the worldwide scheme that also included the defendants manipulating the cryptocurrency to maximize its value.
U.S. Attorney David Anderson said they used some $5 million from their victims' accounts to inflate the value of a particular cryptocurrency and when it reached a high value, they converted it to other online currencies in their accounts.
The men face a maximum penalty of 59 years in prison if convicted on all charges of conspiracy to commit computer fraud, unauthorized access to a protected computer to obtain value, conspiracy to commit wire fraud, conspiracy to commit money laundering and aggravated identity theft.
The Justice Department said it seized more than $6 million in U.S. dollars and millions of digital currency due to the civil forfeiture action, Anderson said in a recorded statement posted online.
"The United States will continue to promote accountability among malign actors seeking to undermine our economic security," U.S. Secretary of State Mike Pompeo said in a statement. "Today's coordinated action demonstrates our commitment to deterring cybercrimes, which would otherwise impose great costs on Americans."