A Queens grand jury has indicted seven members of a California-based cryptocurrency hacker network on charges including grand larceny, money laundering, identity theft, and related crimes. The indictment follows a detailed investigation into the theft of Bitcoin from a private wallet belonging to a 61-year-old man from Jamaica, Queens, announced Queens District Attorney Melinda Katz on Monday.
The victim, an auto body shop owner in southeast Queens, purchased the Bitcoin in 2017 as a retirement investment and had not conducted any transactions with it. In November 2022, two unauthorized transactions removed 5.75 bitcoins from his Blockchain.com wallet, valued at approximately $92,000 at the time. The current value of the stolen cryptocurrency exceeds $300,000.
The alleged ringleader, Aaron Peterson Jr., 20, and his parents, Aaron Peterson, 39, and Autumn Clark, 37, all from Sacramento County, California, were arrested, extradited to Queens, and arraigned on Friday in Queens Supreme Court. Co-defendants Dontay Brown, 39, from Sacramento County, and Ronald Lamar Jr., 22, from Solano County, are expected to be arraigned at a later date. Two additional defendants remain at large.
The victim sought assistance from Assemblymember Clyde Vanel, chair of the Subcommittee on Internet and New Technology. Vanel alerted the Queens District Attorney’s Office, prompting an investigation. The DA’s Cyber Crime Unit and Detective Bureau used advanced techniques to trace over 250 transactions used to launder the stolen funds. This method, known as a “peel chain,” involves sending small amounts of cryptocurrency to multiple wallets to obscure the transaction trail.
The investigation revealed that the stolen funds were moved through various deposit addresses associated with Cash App and other financial services, which were subsequently subpoenaed. Each of the seven defendants was identified as the account holder receiving the laundered funds.
The laundered money was withdrawn from Cash App accounts for personal use, and the remaining funds were consolidated into a “pool account” controlled by Peterson Jr. He used these funds for luxury purchases, including a diamond pendant necklace and a new Mercedes-Benz.
Aaron Peterson Jr. and his parents, along with co-defendants Brown and Moland, were arrested on July 24 at their residences in California following the indictment warrant.
Queens Supreme Court Justice Maria Hirsch has scheduled a court date for Aaron Peterson Jr. and his parents on October 15. They face potential maximum sentences of 5 to 15 years in prison if convicted of the top charges. The defendants are also charged with computer trespass and conspiracy.
Assemblymember Vanel praised the efforts of Queens District Attorney Melinda Katz in combating technology-related fraud, emphasizing the importance of safe investment and transaction practices. Vanel, in his role as chair, continues to focus on ensuring effective regulation of emerging technologies like cryptocurrency.
“Today demonstrates our commitment to bringing justice to those who attempt to defraud residents of Queens,” Vanel stated.
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