Law enforcement in the UK confiscated almost 10 bitcoins from a PayPal scammer who laundered his embezzled loot through the Second Life onli...
Law enforcement in the UK confiscated almost 10 bitcoins from a PayPal scammer who laundered his embezzled loot through the Second Life online game.
Far too often, the media and traditional financial institutions love to paint Bitcoin and other cryptocurrencies as being commonly used by criminals. This FUD is utter nonsense, of course, as far more US dollars are used for illicit activities than cryptocurrency. Still, virtual currencies are used by some criminals as it is a means of exchange. Criminal crypto history was recently made in the UK as a PayPal scammer became one of the first convicted criminals to have his bitcoins seized after he was sentenced to prison.
Embezzling via PayPal
The criminal in question is Gabriele Pearson, aged 23, who worked at a consulting IT company. When a client hired his company to provide services, Pearson used his expertise to remotely log into the computers of his company and its client, allowing him to gain access to PayPal account information.
Pearson then embezzled funds from the PayPal account and laundered them through Second Life, an online game. Second Life is unique in that players can create in-game items and retain full ownership of them. The game has a thriving economy as players buy and sell items using Linden Dollars. Excess Linden Dollars can be withdrawn into the player’s PayPal account.
What Pearson did was to launder his embezzled funds into Linden Dollars, which he then sold for bitcoins. Eventually, the Joint Cyber Crime Unit of the Surrey and Sussex police forces caught up with him. As the leading investigator, Detective Constable Paul Constable, explained:
He primed the account to accept larger sums of cash but his offending was noticed while he was waiting for confirmation from PayPal that he could increase the transfer limit to £50,000. He was able to request this as he had accessed further private documents that meant he could bypass PayPal’s identification requirements.
Paying the Piper
At the time of his arrest, Pearson was in possession of 9.9 bitcoins. He eventually pleaded guilty to fraud by false representation, concealing criminal property, and unauthorized access to computer to facilitate the commission of an offense. For his misdeeds, Pearson was sentenced to 15 months in jail.
Several things make this case interesting. First is that the criminal used an online game to launder his stolen money into bitcoins. Another is that this is one of the first instances in the UK where cryptocurrency was seized under the Section 47 of the Proceeds of Crime Act 2002, which allows for the seizure of goods obtained through criminal means.
At the time of writing, the value of 9.9 bitcoins is $69,000 USD. One wonders how much money Pearson actually embezzled from PayPal. There is no report on how much money was actually stolen. Still, to gain almost 10 bitcoins by laundering the stolen funds in Second Life is actually kind of impressive and probably took a bit of hustling to accomplish.
What do you think of laundering stolen money into cryptocurrency by using the Second Life online game? Let us know in the comments below.
Images courtesy of Flickr/@Charisma Jonesford, YouTube/@Second Life, and Shutterstock.
The post Embezzled PayPal Funds Laundered into Bitcoins via Online Game appeared first on Bitcoinist.com.
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