CALIFORNIA – A federal judge held a status conference on October 22 with the attorney for Jeandiel Serrano, 21, a SoCal resident who stole $230 million in Bitcoin – one of the largest cryptocurrency thefts from a private individual in the history of the United States.
Serrano’s attorney, Paulette Pagán said she was negotiating a potential plea agreement with the Department of Justice (DOJ). Serrano had originally pleaded not guilty at his arraignment on Oct. 8.
A plea deal often allows the DOJ to secure a conviction without a lengthy trial, which can save resources and hold the individual responsible without risking the uncertainties of a full trial.
Sophisticated social engineering
According to the DOJ, Serrano worked with co-defendant Malone Lam, 20, portraying themselves as Google and Gemini Crypto Exchange technical support staff, contacting the victim to assist him with a security breach.
Serrano and his co-conspirators targeted the D.C. resident because they believed he held considerable amounts of virtual currency.
“Substantial planning went into executing the theft. A co-conspirator caused “unauthorized Google account access” notifications to be transmitted to the victim in the week leading up to the theft,” said the DOJ in the court document.
They go on to say that the co-conspirator used proxy and virtual private network (VPN) services, which masked their IP address, to make it appear that the access attempts were occurring overseas.
The conspirators were laying the groundwork for their theft through sophisticated social engineering.
$47,500 a month rental home
On August 18, 2024, Serrano called the victim and eventually was able to convince him into downloading a program onto his computer for the purpose of “protecting” his holdings with Gemini.
In reality, this was a remote access program granting the conspirators real-time access to the victim’s computer desktop.
Serrano was able to manipulate the victim into opening files with private keys to over 4,100 Bitcoin then valued at over $240,000,000.00 USD. While Serrano continued to manipulate the victim, his co-conspirator used this access to quickly steal the entirety of the victim’s virtual currency holdings.
The co-conspirators divided the proceeds five ways between them.
Serrano purchased three cars, totaling over $1 million with the stolen proceeds, as well as a $500,000 watch. Lam spent hundreds of thousands of dollars per night at Los Angeles night clubs and amassed a collection of custom Lamborghinis, Ferraris, and Porsches.
Authorities were able to identify Serrano after he created an account on cryptocurrency exchange TradeOgre.com.
Serrano made a $29 million deposit on the site, however, failed to use a VPN to mask his IP. Records from TradeOgre show that the account was created from an IP address registered to Serrano’s $47,500 per month rental home in Encino, California.
Maximum prison term of 20 years
According to the DOJ, at least $100 million remains unaccounted for.
Serrano and Lam were charged with conspiracy to commit wire fraud and conspiracy to launder monetary instruments in September. If convicted, they face a maximum prison term of 20 years for either charge, with potential fines of $250,000 to $500,000.
U.S. District Judge Coleen Kollar-Kotelly tentatively scheduled another status conference in the case for Jan. 9, 2025, and suggested it could become a plea agreement hearing depending on how negotiations proceed.
