Wallingford man pleads guilty to bitcoin phishing scheme

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HARTFORD, Conn. (WTNH) — Deirdre M. Daly, United States Attorney for the District of Connecticut, announced on Tuesday that a Wallingford man pled guilty in Hartford federal court to fraud and money laundering offenses in connection with a scheme to steal bitcoins in an online phishing scheme.

Michael Richo, 35, was arrested on October 5, 2016. He was released on bond with computer monitoring conditions.

Through an investigation by the Federal Bureau of Investigation and the case being prosecuted by Assistant U.S. Attorney Neeraj N. Patel, it was reported through court documents and statements made in court that Richo engaged in an online phishing scheme to steal bitcoins from individuals on the dark web. Bitcoins are a form of electronic currency, and online marketplaces on the dark web typically accept them as a payment method.

Daly stated, in pleading guilty, Richo admitted that he posted fake links to online marketplaces on dark web forums.  The links directed individuals to a fake login page that looked like the real login pages for the various online marketplaces.  When individuals attempted to log in, Richo stole his or her username and password.

Once he had an individual’s username and password, Richo monitored the individual’s bitcoin balance at the real marketplace.  If the individual later deposited bitcoins with the real marketplace, Richo withdrew the bitcoins before the individual could spend them and caused the stolen bitcoins to be deposited into his own bitcoin wallet.

Richo then sold the stolen bitcoins to others in exchange for U.S. currency, which was deposited into bank accounts that he controlled or was provided to him through Green Dot Cards, Western Union transfers, and MoneyGram transfers.