Paraguay police confiscate coins from $1m teen crypto hacking gang

Police in Paraguay say they have arrested 10 people between the ages of 18 and 20 on suspicion of stealing $1.2 million from hundreds of bank accounts and e-wallets.

Officers say they have confiscated $400,000 of crypto, which the gang allegedly used to launder its stolen funds.

“The [gang] used cash and card mules, who provided the [gang with] personal information and bank account details,” said Irma Llano, a public prosecutor, per Paraguayan media outlet ABC. “After emptying their victims’ accounts, the [gang members] converted the money into cryptocurrencies.”

Criminals everywhere continue to use crypto as a money laundering tool, despite crackdowns from law enforcement agencies. In January, the US Department of Justice charged a Venezuelan national with using Tether’s USDT coin to launder around $1 billion for criminal networks.

Police raids

All of the suspects were arrested in the province of Itapúa, Llano said, but said the money mule network comprises “at least 400 people.”

The alleged masterminds had all recently graduated from the same high school, reported the Paraguayan media outlet Radio Universo 970AM.

The suspects allegedly hacked and drained scores of unsuspecting people’s bank accounts and e-pay wallets.

Officers seized motor vehicles, computer equipment, and mobile phones during raids conducted throughout the province.

The suspected ringleader is an 18-year-old male named Alex, say police. They did not disclose the suspect’s surname.

Courts have issued scores of arrest warrants, with police reportedly ready to launch another series of raids.

Raising suspicions

Some of the suspected mules have turned themselves in voluntarily at police stations, the prosecutor said.

After using the money mules’ accounts to launder the stolen money, Llano said the gang used over-the-counter trading platforms to convert their cash into crypto.

They allegedly offered to buy coins at more than double or even triple the market value to help close deals faster.

However, this strategy stoked the suspicion of a female crypto investor in the city of Encarnación, police said.

When the investor received a “strangely high” bid for her crypto holdings, she decided to report the bid to her local police station.

The mules, meanwhile, were paid a monthly “rental fee” for the use of their bank accounts, in addition to “commissions” for each transaction, Llano said.

The gang reportedly began stealing money in the first weeks of the year, but Llano said its activity “ballooned" in March.

Police said the suspects had “flaunted their money” by buying luxury cars and renting expensive apartments.

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at [email protected].