DOJ charges 12 more in $263 million crypto fraud takedown where money was hidden in squishmallow stuffed animals

The US Department of Justice (DOJ) has turned up the heat on a multi-national cryptocurrency fraud ring that allegedly swindled over a quarter of a billion dollars from victims worldwide.

The charges, filed under the Racketeer Influenced and Corrupt Organizations Act (RICO), bring the total number of defendants in the case to 27.

At the centre of the investigation is 20-year-old Malone Lam, accused of orchestrating one of the largest individual cryptocurrency thefts in U.S. history - allegedly stealing over 4,100 Bitcoin (worth approximately US $230 million) from a single victim in Washington, DC.

As we described last year, Lam - who operated under various internet handles including "Anne Hathaway" and "$$$" - is alleged to have partnered with Jeandiel Serrano (also known as "VersaceGod"), to carry out a sophisticated social engineering attack against a man identified as an extremely rich early cryptocurrency investor.

Having bombarded the victim with fake Google security alerts warning of unauthorised login attempts, Lam and Serrano are said to have made contact with the man via phone, impersonating Google support staff. According to investigators, they tricked the victim into sharing multi-factor authentication codes, enabling them to access his accounts and steal a fortune in cryptocurrency.

Following the theft, Lam and Serrano are alleged to have laundered the stolen funds in a variety of ways, and used their riches to fund an extravagant lifestyle.

For instance, Lam is said to have purchased at least 31 luxury vehicles, including custom Lamborghinis, Ferraris, Porsches, Mercedes G Wagons, a Rolls-Royce, and a McClaren - some of which have been valued at over US $3 million. He also rented multiple high-end properties in Los Angeles and Miami, some costing up to $68,000 per month, and spent hundreds of thousands of dollars during nightclub outings.

Now the DOJ has announced further defendants have been charged in connection with the racketeering conspiracy. According to court documents, the defendants - who met via online gaming platforms - had different roles including database hackers, organisers, target identifiers, callers, money launderers, and burglars who would actually physically break into victims' homes to steal their hardware cryptocurrency wallets.

One of the defendants, 21-year-old Joel Cortes of Laguna Niguel, California, is described in court documents as having helped members of the gang by "changing stolen virtual currency into fiat currency and shipping the currency across the United States, hidden in squishmallow stuffed animals, each containing approximately $25,000 apiece."

Other members of the gang allegedly followed the same pattern as Lam when it came to drawing attention to themselves - purchasing, amongst other things, nightclub services for up to US $500,000 per evening, luxury handbags worth tens of thousands of dollars to give away to young women they found attractive, and private jet rentals.

Even following his arrest in September 2024, Lam is alleged to have continued to work with the gang, helping them steal cryptocurrency, and having his alleged cohorts buy luxury Hermes Birkin handbags for his girlfriend in Miami, Florida.

This case is a stark reminder of the growing intersection between cyber fraud and human psychology. While the crypto tech might be new, the con is as old as time—gain trust, play the long game, and walk off with the loot.

If your relatives are still chatting with “financial advisors” on WhatsApp or being pitched by crypto “mentors” on LinkedIn, now might be a good time to revisit that family cybersecurity talk.

If convicted the defendants could be looking at swapping their flashy extravagant and ostentatious lifestyle for a very different destination: a prison cell for many years.