Two Canadians Sentenced To Federal Prison For Bitcoin Fraud
Two Canadian nationals have been indicted and sentenced to two years in the U.S. federal prison and three years’ supervised release for committing Bitcoin fraud in a Twitter scam, according to a statement by the U.S. Department of Justice (DoJ).
Karanjit Singh Khatkar, 23, and Jagroop Singh Khatkar, 24, conspired to commit wire fraud and money laundering to steal bitcoin from an Oregon resident. The Khatkars are residents of the city of Surrey in British Columbia, Canada.
Karanjit Khatkar was arrested on July 18, 2019 upon arrival at the McCarran International Airport in Las Vegas and was detained pending trial. Jagroop Khatkar appeared voluntarily in the court on December 16, 2019.
Both the Khatkars pleaded guilty. They also paid $142,349 as a prepayment of restitution to their victim.
The two defendants used a Twitter account with the name @HitBTCAssist between October 2017 and August 2018 to trick victims into thinking they were communicating with a customer service representative from Hong Kong-based crypto currency exchange HitBTC.
In the process, the defendants responded to the Oregon victim’s query about cryptocurrency withdrawal process from her HitBTC account. They hoodwinked her to extract information and managed to log in and take over her email and HitBTC accounts as well as her account at U.S.-based crypto exchange Kraken.
They then transferred 23.2 bitcoins from the victim’s HitBTC account to Karanjit Khatkar’s Kraken account, with Karanjit Khatkar in turn transferring about 11.6 bitcoins to Jagroop Khatkar’s Kraken account.
Two days after, Karanjit Khatkar used the amount to buy a Mercedes-Benz with C$56,598 and Karanjit Khatkar used tens of thousands of dollars for gambling while staying at high-end casinos in Las Vegas.
Apart from the restitution prepayment, the Khatkars were ordered to pay an additional $42,162 to the victim for a total of $184,511. This case was investigated by FBI and prosecuted by Assistant U.S. Attorneys for the District of Oregon.
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