The brother of a former Coinbase product manager was sentenced on Tuesday to 10 months in prison after pleading guilty in what U.S. prosecutors have called the first insider trading case involving cryptocurrency. Reuters reports: Nikhil Wahi admitted to making trades based on confidential information from Coinbase, one of the world’s largest cryptocurrency exchanges, when he pleaded guilty in September to a wire fraud conspiracy charge. Prosecutors said Ishan Wahi, the former product manager, shared the information with his brother and their friend Sameer Ramani about new digital assets that Coinbase was planning to let users trade. Ishan Wahi has pleaded not guilty, and Ramani is at large.

Prosecutors said Wahi made nearly $900,000 of profit by illegally trading ahead of 40 different Coinbase announcements. They recommended a 10- to 16-month sentence. At a sentencing hearing in Manhattan federal court, U.S. District Judge Loretta Preska said his crime was “not an isolated error in judgment.” “Today’s sentence makes clear that the cryptocurrency markets are not lawless,” Damian Williams, the top federal prosecutor in Manhattan, said in a statement. Further reading: Coinbase To Cut 20% Jobs, Abandon ‘Several’ Projects To Weather Downturns in Crypto Market

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CNN reports that 32-year-old Katelyn McClure “has been sentenced to three years in state prison for her role in scamming more than $400,000 from GoFundMe donors, by claiming to be collecting money for a homeless man.”

In 2017, McClure claimed she ran out of gas and was stranded on Interstate 95 in Philadelphia. The homeless man, Johnny Bobbitt Jr., supposedly saw her and gave her his last $20 for gas. McClure and her then-boyfriend, Mark D’Amico, posted about the “good deed” on social media, including a picture of her with Bobbitt on a highway ramp. They also started a GoFundMe campaign to raise money for the homeless veteran, saying they wanted to pay it forward to the good Samaritan and get him off the streets.

The story went viral and made national headlines, with more than 14,000 donors contributing. The scammers netted around $367,000 after fees, according to court documents…. Bobbitt, who received $75,000 from the fundraiser, according to prosecutors, took civil action against D’Amico and McClure and the scam soon became public…. D’Amico and Bobbitt were charged in 2018 alongside McClure for concocting the scheme, prosecutors said. McClure pleaded guilty to one count of theft by deception in the second degree in 2019, according to the Burlington County prosecutor.

Bobbitt pleaded guilty to conspiracy to commit theft by deception in 2019 and was sentenced to a five-year special probation period which includes drug treatment. D’Amico also pleaded guilty and agreed to a five-year term in New Jersey state prison, as well as restitution of GoFundMe and the donors, in 2019.

“The gas part is completely made up, but the guy isn’t,” McClure texted a friend (according to CNN). “I had to make something up to make people feel bad.” So what happened to “the guy” from the highway ramp? Prosecutors note that if Bobbitt “fails to adhere to the tightly-structured regimen of treatment and recovery services, which includes frequent testing for drug use, he could be sentenced to five years in state prison.”

And they add that the judge “also ruled that McClure, a former state Department of Transportation worker, is permanently barred from ever holding another position as a public employee.”

Their statement points out that the 2017 campaign was at the time the largest fraud ever perpetrated through GoFundMe — which voluntarily reimbursed the 14,000-plus donors.

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US citizens lost over $10 billion due to phishing calls by illegal Indian call centres in 2022, as per the Federal Bureau of Investigation (FBI) data. From a report: Most of the victims of these fraud calls from Indian phishing gangs were elderly US citizens above the age of 60 years who lost over $3 billion, Times Of India reported citing FBI data. After several incidents were reported in 2022, the FBI has now deputed a permanent representative at the US embassy in New Delhi. The representative will work closely with the CBI, Interpol and the Delhi Police to bust these gangs that have put India under the threat to be termed as the hub of such illegal call centres. Several Americans lost a total of $10.2 billion in 2022 so far, which is a 47 per cent increase from 2021’s $6.9 billion, to such fraud calls.

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An anonymous reader quotes a report from Ars Technica: Federal prosecutors have charged two men with allegedly taking part in a spree of swatting attacks against more than a dozen owners of compromised Ring home security cameras and using that access to livestream the police response on social media. Kya Christian Nelson, 21, of Racine, Wisconsin, and James Thomas Andrew McCarty, 20, of Charlotte, North Carolina, gained access to 12 Ring cameras after compromising the Yahoo Mail accounts of each owner, prosecutors alleged in an indictment filed Friday in the Central District of California. In a single week starting on November 7, 2020, prosecutors said, the men placed hoax emergency calls to the local police departments of each owner that were intended to draw an armed response, a crime known as swatting.

On November 8, for instance, local police in West Covina, California, received an emergency call purporting to come from a minor child reporting that her parents had been drinking and shooting guns inside the minor’s home. When police arrived at the residence, Nelson allegedly accessed the residence’s Ring doorbell and used it to verbally threaten and taunt the responding officers. The indictment alleges the men helped carry out 11 similar swatting incidents during the same week, occurring in Flat Rock, Michigan; Redding, California; Billings, Montana; Decatur, Georgia; Chesapeake, Virginia; Rosenberg, Texas; Oxnard, California; Darien, Illinois; Huntsville, Alabama; North Port, Florida; and Katy, Texas.

Prosecutors alleged that the two men and a third unnamed accomplice would first obtain the login credentials of Yahoo accounts and then determine if each account owner had a Ring account that could control a doorbell camera. The men would then use their access to gather the names and other information of the account holders. The defendants then placed the hoax emergency calls and waited for armed officers to respond. It’s not clear how the defendants allegedly obtained the Yahoo account credentials. A separate indictment filed in November in the District of Arizona alleged that McCarty participated in swatting attacks on at least 18 individuals. Both men are charged with one count of conspiracy to intentionally access computers without authorization. Nelson was also charged with two counts of intentionally accessing without authorization a computer and two counts of aggravated identity theft. If convicted, both men face a maximum penalty of five years in prison. Nelson faces an additional maximum penalty of at least seven years on the remaining charges.

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U.S. prosecutors on Wednesday said they have charged eight individuals in a securities fraud scheme, alleging they reaped about $114 million from by using Twitter and Discord to manipulate stocks. Reuters reports: The eight men allegedly purported to be successful traders on the social media platforms and then engaged in a so-called “pump and dump” scheme by hyping particular stocks to their followers with the intent to dump them once prices had risen, according to prosecutors in the Southern District of Texas.

The U.S. Securities and Exchange Commission (SEC) said it has filed related civil charges against the defendants in the scheme, claiming that seven of the defendants used Twitter and Discord to boost stocks. It said the eighth was charged with aiding and abetting the scheme with his podcast. The individuals charged were Texas residents Edward Constantinescu, Perry Matlock, John Rybarczyk and Dan Knight, along with California residents Gary Deel and Tom Cooperman, Stefan Hrvatin of Miami and Mitchell Hennessey of Hoboken, New Jersey.

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The New York Police Department has joined Ring Neighbors, the neighborhood surveillance network built around Amazon’s Ring security cameras. The Verge reports: The partnership, announced yesterday, means the NYPD will view people’s posts on Neighbors and be able to post directly to it, including requests for public help on “active police matters.” Neighbors is a Nextdoor-like extension of Ring’s security camera business, allowing residents of a neighborhood to discuss crime and safety as well as post footage from their cameras. While many law enforcement departments have joined Neighbors in recent years, this marks its adoption by America’s largest police force. (Police could separately request Ring footage for criminal investigations without the app.) It’s part of an increasingly tight integration between Amazon and police — one that’s raised both concerns about privacy and questions about its crime-solving value.

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The International Criminal Police Organization (Interpol) has announced the launch of its fully operational metaverse, initially designed for activities such as immersive training courses for forensic investigations. Decrypt reports: Unveiled at the 90th Interpol General Assembly in New Delhi, the INTERPOL Metaverse is described as the “first-ever Metaverse specifically designed for law enforcement worldwide.” Among other things, the platform will also help law enforcement across the globe to interact with each other via avatars. “For many, the Metaverse seems to herald an abstract future, but the issues it raises are those that have always motivated INTERPOL — supporting our member countries to fight crime and making the world, virtual or not, safer for those who inhabit it,” Jurgen Stock, Interpol’s secretary general said in a statement.

One of the challenges identified by organizations is that something that is considered a crime in the physical world may not necessarily be the same in the virtual world. “By identifying these risks from the outset, we can work with stakeholders to shape the necessary governance frameworks and cut off future criminal markets before they are fully formed,” said Madan Oberoi, Interpol’s executive director of Technology and Innovation. “Only by having these conversations now can we build an effective response.”

In a live demonstration at the event, Interpol experts took to a Metaverse classroom to deliver a training course on travel document verification and passenger screening using the capabilities of the newly-launched platform. Students were then teleported to an airport where they were able to apply their newly-acquired skills at a virtual border point. Additionally, Interpol has created an expert group that will be tasked with ensuring new virtual worlds are “secure by design.” The report notes that Interpol has also joined “Defining and Building the Metaverse,” a World Economic Forum initiative around metaverse governance.

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An anonymous reader quotes a report from Ars Technica: Earlier this year, the International Organization for Migration reported that more than 3 million refugees fleeing war-torn Ukraine were “at heightened risk of exploitation.” Human trafficking cases, they warned, involved refugees more likely to leave home suddenly without secure financial resources and “less likely to be identified in the immediate aftermath of mass displacement.” Since February, the European Union announced (PDF) that the number is even larger, counting more than 5.4 million people who “have arrived in the European Union since the beginning of the war in Ukraine.” “All relevant stakeholders have recognized that the threat of trafficking in human beings is high and imminent,” EU’s human trafficking plan states. Since women and children represent the majority of refugees fleeing, the plan says they are believed to be most at risk.

To respond, the EU began monitoring online and offline human trafficking risks, and experts called for countries across Europe to start working together to shield refugees during this uncertain time of conflict. This week, the EU’s law enforcement agency focused on cybercrimes, Europol, reported that it had done exactly that by coordinating the first online EU-wide hackathon. By bringing together law enforcement authorities from 20 countries to aid in their investigations, the hackathon targeted criminal networks using social platforms and websites to map out the online criminal landscape of human trafficking across Europe. In particular, Europol noted in its report, “investigators targeted human traffickers attempting to lure Ukrainian refugees.”

“The Internet and human trafficking are interlinked,” Europol stated in its report, which identified 30 online platforms “related to vulnerable Ukrainian refugees,” 10 specifically targeting refugees for human trafficking. Europol identified 80 persons/usernames (with 30 possibly exploiting Ukrainian refugees), 11 suspected human traffickers (five believed to be targeting Ukrainian refugees), and 45 possible victims, 25 of which were Ukrainian. Countries involved in the hackathon were Austria, Albania, Belgium, Denmark, France, Finland, Germany, Greece, Hungary, Lithuania, Netherlands, Portugal, Poland, Romania, Slovenia, Slovakia, Spain, Sweden, the United Kingdom, and Ukraine. Online platforms probed during the hackathon included “a wide range of websites” and “social media, dating platforms, advertising and aid platforms, forums and messaging applications.”

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Charter Communications must pay over $1.1 billion to the estate and family of an 83-year-old woman murdered in her home by a Spectrum cable technician, a Dallas County Court judge ruled yesterday. Ars Technica reports: A jury in the same court previously ordered Charter to pay $7 billion in punitive damages and $337.5 million in compensatory damages. Judge Juan Renteria lowered the award in a ruling issued yesterday. The damages are split among the estate and four adult children of murder victim Betty Thomas. Renteria did not change the compensatory damages but lowered the punitive damages awarded to the family to $750 million. Pre-judgment interest on the damages pushes Charter’s total liability to over $1.1 billion.

It isn’t surprising that the judge lowered the payout, in which the jury decided punitive damages should be over 20 times higher than what Charter is liable for in compensatory damages. A nine-to-one ratio is often used as a maximum because of a 2003 US Supreme Court ruling that said: “In practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” Former Spectrum technician Roy Holden pleaded guilty to the 2019 murder of customer Betty Thomas and was sentenced to life in prison in April 2021. Charter was accused of hiring Holden without verifying his employment history and ignoring a series of red flags about his behavior, which included stealing credit cards and checks from elderly female customers.

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Nikhil Wahi, brother of former Coinbase product manager Ishan Wahi, pleaded guilty in a Monday hearing to one count of conspiracy to commit wire fraud in connection with an alleged insider trading scheme. Decrypt reports: “Less than two months after he was charged, Nikhil Wahi admitted in court today that he traded in crypto assets based on Coinbase’s confidential business information to which he was not entitled,” said Damien Williams of the U.S. Attorney’s Office in New York in a statement. “For the first time ever, a defendant has admitted his guilt in an insider trading case involving the cryptocurrency markets,” Williams continued. “Today’s guilty plea should serve as a reminder to those who participate in the cryptocurrency markets that the Southern District of New York will continue to steadfastly police frauds of all stripes and will adapt as technology evolves.”

Nikhil now awaits sentencing in December, which could mean up to 20 years in prison. He has also been ordered to give back the money earned as a result of the illicit Coinbase trading, Williams said. Back in July, the Justice Department charged Ishan, Nikhil, and their friend Sameer Ramani with wire fraud conspiracy and wire fraud as it relates to cryptocurrency insider trading. The Securities and Exchange Commission also filed charges against the trio. While he was working at Coinbase, Ishan allegedly shared his insider knowledge of upcoming Coinbase listing announcements with Nikhil and Sameer to then profit from the listings by purchasing the tokens before they went live on Coinbase. In August, Ishan pled not guilty to the DOJ’s charges. Now that his brother has pleaded guilty, it’s unclear how Ishan’s case will proceed and whether he will continue to fight the insider trading case.

According to the DOJ’s statement released Monday, Nikhil implicated his brother Ishan and admitted to receiving tips from him. Nikhil then reportedly used numerous different crypto wallets in others’ names to anonymize his insider trading. Concerns of insider trading at cryptocurrency exchanges extend beyond just this case, which is considered the first of its kind and is likely to set a precedent. Three Australian finance academics have posited that up to 25% of Coinbase listings in the past four years may have involved some insider trading.

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