Portland Man Gets Six Years in Prison for Crypto Theft Scam

A 22-year-old Portland man was sentenced to six years in federal prison on Tuesday for his role in a SIM swapping scam that stole more than $4 million in cryptocurrency from unsuspecting victims. Daniel James Junk pleaded guilty to conspiracy to commit wire fraud in April 2023, after being arrested in March 2022.

SIM swapping is a technique that involves taking over someone’s cell phone account by swapping their SIM card with another one. This allows the scammer to access the victim’s online accounts, such as email, social media, and cryptocurrency wallets, and bypass any two-factor authentication. The scammer can then transfer the victim’s funds to their own accounts, or sell them on the black market.

Portland Man Gets Six Years in Prison for Crypto Theft Scam

Junk was part of a community of SIM swappers who collaborated to target and hack high-value victims, such as celebrities, entrepreneurs, and investors. They used online databases, social engineering, and stolen cell phones to obtain the victims’ personal information and phone numbers. They then contacted the victims’ phone providers and tricked them into activating new SIM cards that they controlled.

FBI seized 71 bitcoin from Junk’s apartment

The Federal Bureau of Investigation (FBI) launched an investigation into the SIM swapping community in 2021, after receiving complaints from several victims who lost their cryptocurrency. The FBI traced the transactions to Junk and his co-conspirators, and obtained a search warrant for Junk’s apartment in Portland.

When the FBI raided Junk’s apartment on March 3, 2022, they found a computer with an active browser showing that Junk was attempting to illegally access accounts in other people’s names. They also seized more than 71 bitcoin worth approximately $3 million at the time, which were stored in a digital wallet protected by a password.

Junk cooperated with the FBI and revealed his password, allowing the FBI to access his wallet and transfer the bitcoin to their own account. He also surrendered another 33 bitcoin worth about $1 million in May 2022. The FBI estimated that Junk had raised more than $1.7 billion from investors, and had paid out only about $400 million. The rest of the money was either stolen by Junk, or frozen by authorities.

Junk violated his release conditions and continued his scam

Junk was released from custody in June 2022, pending his sentencing. He was ordered to comply with several conditions, such as not using the internet, not possessing any cryptocurrency, and not contacting any victims or co-conspirators. However, Junk violated these conditions and continued his SIM swapping scam.

In January 2024, the FBI discovered that Junk had still been in possession of multiple victim target lists, including about 25,000 compromised email addresses. He had also been communicating with other SIM swappers and planning new attacks. His release was revoked and he was ordered into custody.

On Tuesday, Junk was sentenced to six years in federal prison by U.S. District Judge Michael W. Mosman. He was also ordered to pay $3 million in restitution to his victims. Judge Mosman said that Junk’s crime was serious and sophisticated, and that he showed no remorse or empathy for his victims.

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