The grey-market appeal of cryptocurrencies, and the finality of every transaction encoded on a blockchain, has made them a choice target for hackers. This is something that those who lost money during the collapse of Mt. Gox know all too well. Earlier this year, cybersecurity company Carbon Black determined that roughly $1.1 billion worth of the digital currency had been stolen during the first half of 2018 alone. And while most of these were taken via digital finesse, some criminals have decided to go about stealing their bitcoin the old fashioned way.
Louis Meza (courtesy of the New York Daily News)
A New Jersey man named Louis Meza pled guilty to kidnapping an acquaintance and stealing a hard drive containing nearly $2 million in ethereum. The heist, which was orchestrated and carried out by Meza and several associates, was carried out late last year. After the sentencing, the Manhattan District Attorney’s office said that while it has prosecuted 25 cases involving the theft of crypto over the past year, Meza’s case stood out.
Here’s the WSJ:
A New Jersey man admitted in court Wednesday to kidnapping a friend and then stealing more than a million dollars in cryptocurrency from him, an unusual crime that is among the first major cryptocurrency cases brought by Manhattan prosecutors.
Louis Meza, of Passaic, N.J., pleaded guilty to second-degree kidnapping and first-degree grand larceny in state Supreme Court in Manhattan. Under the plea agreement, he agreed to a 10-year prison term, although his sentence will ultimately be determined by the judge.
As of a few years ago, the Manhattan district attorney’s office rarely investigated cases involving cryptocurrency. This year, it has had more than 25 investigations. Still, Mr. Meza’s case was unusual because he stole the currency not by hacking but through an elaborate, although old-fashioned, robbery.
“Louis Meza orchestrated a 21st-century stickup,” Manhattan District Attorney Cyrus Vance Jr. said in a statement. “Then 21st-century investigators brought him swiftly to justice, securing a landmark conviction in an undeveloped area of the law.”
In an amusing twist, Meza met the victim – an old friend – at the Ruby Tuesday in Times Square. After enjoying a few drinks, Meza offered the victim a ride home in what he said was an Uber. However, once the two got in, one of Meza’s co-conspirators who was driving the vehicle pulled out a gun and threatened the victim. The three men then drove to the victim’s apartment, where they retrieved a hard drive containing more than one million in ether.
One evening in November, Mr. Meza and a longtime friend met for drinks at the Ruby Tuesday in Times Square. Afterward, when the friend said he would head home on the subway, prosecutors said, Mr. Meza steered him into a minivan that he claimed was an Uber.
Prosecutors said Mr. Meza met up with his co-conspirators in the Bronx, where they handed him the keys. Then, they said, Mr. Meza used the keys to let himself into his friend’s apartment and steal a small drive holding the cryptocurrency.
Meza acknowledged committing the crime in open court.
“You stole property valued over one million dollars?” Justice Melissa Jackson asked Mr. Meza on Wednesday.
Mr. Meza, wearing handcuffs and khaki jail scrubs, nodded.
“You, in the county of New York, on or about Nov. 4, abducted another person?” the judge asked.
Mr. Meza nodded again.
According to his lawyer, Meza is a “businessman” who has never before been in trouble with the law.
Moshe Horn, an attorney for Mr. Meza, said outside the courtroom that his client had been a businessman his whole life. “He had never been in trouble until now,” Mr. Horn said.
For what it’s worth, three other co-conspirators have been charged in the heist, but Meza refused to snitch on them. In addition to the prison time, Meza was forced to surrender nearly $1 million in cryptocurrency.
In June, three other men were indicted for participating in the robbery scheme. Those cases are pending. In his plea agreement, Mr. Meza didn’t agree to cooperate against them, according to his lawyer, Mr. Horn.
Under his agreement with prosecutors, Mr. Meza agreed to forfeit about 84 bitcoin – now worth roughly $589,000 – and 269,000 SALT lending tokens, a loan product backed by cryptocurrency.
Even as the price of a bitcoin has continued to unravel, we imagine we’ll be seeing more heists like these. After all, it’s much easier to jack a hard drive than an ATM.