A California man must pay over $61,000 in restitution and received an additional sentence of three years of probation after pleading guilty for his part in a SIM swap scam that targeted at least 40 people and robbed one victim of more than $57,000 in crypto, the U.S. Department of Justice announced Wednesday.
Richard Yuan Li, whom prosecutors had charged with one count of conspiracy to commit felony wire fraud, and co-conspirators stole the crypto from an unnamed New Orleans physician after gaining access to multiple crypto accounts. The victim had accounts with Binance, Bittrex, Coinbase, Gemini and Poloniex, among others. At one point, one conspirator attempted to extort the victim for 100 bitcoin (BTC), said the Justice Department.
The 21-year-old Li was sentenced in the U.S. District Court for the Eastern District of Louisiana. Prosecutors said that Li's actions amounted to federal crimes because the SIM swaps transmitted signals across state lines and were therefore subject to the interstate commerce clause of the U.S. Constitution. Li must also perform 100 hours of community service.
A SIM swap scam involves the fraudulent acquisition of a cellular phone and subsequent directing of a victim's incoming calls and texts to another phone. Scammers are then able to acquire personal financial information, including bank and cryptocurrency accounts, as well as other accounts with two-factor authentication.
In their multi-art scheme, which ran for most of 2018, Li and his co-conspirators tricked an Apple (AAPL) representative into sending them an iPhone 8, “arranged for victims’ telephone numbers to be swapped” to that phone, and then bypassed their target’s security measures to gain access to files.
From July 2018 to December 2018, LI participated in unauthorized SIM Swaps that targeted at least 40 telephone numbers, prosecutors said in a statement.
On Nov. 10, 2018, the physician's telephone number was swapped to the iPhone 8, which LI kept in his dorm room at a university in California.
A separate SIM Swap of another individual on Dec. 4, 2018, resulted in that victim losing approximately $4,000 of an undisclosed currency.
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