SAN JOSE — A Boston-area resident has been sentenced to a decade in a California prison in what is believed to be the country’s first-ever arrest and conviction for “SIM swapping,” commandeering victims’ smartphones to steal millions of dollars’ worth of bitcoin and other cryptocurrency.
Joel Ortiz, 21, was sentenced Friday after pleading no contest in January to eight counts of identity theft and computer crimes. He was originally charged with 41 counts and linked to 13 identified victims; the plea involved agreeing to pay restitution to the eight who suffered some monetary loss.
Santa Clara County Deputy District Attorney Erin West, whose office runs the South Bay-based Regional Enforcement Allied Computer Team that handled the case, credited the team — which includes Sheriff’s Office detectives — with being on the forefront of high-stakes financial tech crime.
“I’m very proud that the Santa Clara County courts were able to recognize the significance of this crime and the complete devastation in which it leaves the victims,” West said. “It’s under-reported and under-investigated, but it’s a major threat to our country’s financial security.”
All told, authorities believe Ortiz stole more than $7.5 million in digital cryptocurrency — including $5.2 million from a Cupertino cryptocurrency entrepreneur — from upward of 40 victims, though the charges and conviction reflect just a portion of those figures.
“Ten years should send a strong message to would-be hackers that Santa Clara County will not tolerate crime,” West said.
In SIM swapping, hackers get a mobile phone carrier to transfer access to a targeted person’s phone number from the registered SIM card to one of theirs. Some cases involve internal sabotage — like having a connection at a phone carrier — though many digital intruders answered security questions by combing through a person’s social media profile, or through phishing emails and chain-style Facebook posts. Having access to text messages allows someone to bypass most digital security barriers to banking, social media and cryptocurrency accounts.
REACT investigators first got onto Ortiz’s trail in February 2018 when a Santa Clara County resident suspected he was the victim of such a scheme, and eventually discovered that he had lost $10,000 worth of bitcoin. Within a few days, the presumed hacker called the victim’s wife and sent text messages to his daughter including the message “TELL YOUR DAD TO GIVE US BITCOIN.”
That led to detectives tracing the hacker’s SIM and smartphones used to access the man’s accounts, and found emails that identified Ortiz, including a photo of him holding his Massachusetts ID card. That led to the discovery of at least $1.5 million in activity. Several of the victims linked to Ortiz attended the same May 2018 cryptocurrency conference in New York.
Online, Ortiz flaunted a lavish lifestyle presumably funded by the stolen funds that included designer clothing and posh mansion rentals in Los Angeles, where he was arrested July 12 while trying to fly out of LAX.
Since Ortiz’s arrest, the REACT task force has made other notable SIM swap arrests, including in August of 19-year-old Tracy resident Xzavyer Narvaez, who was reportedly implicated by emails found on one of Ortiz’s phones.
Kansas City resident Joseph Harris was arrested by REACT in Oklahoma City in September and later charged with stealing $14 million worth of cryptocurrency tokens from the San Jose-based tech firm Crowd Machine. New York City resident Nicholas Truglia, 21, was arrested in Manhattan in November and implicated in at least 11 SIM swap cases, with victims including a San Francisco man who lost $1 million in digital funds he had saved for his daughters’ college education, and a Cupertino resident.
Kalvin Ung was arrested Dec. 20 in Fresno and later charged with a SIM swap ploy targeting 12 victims for a total loss of $500,000, after a Bay Area resident reported a cryptocurrency theft last fall. The cases of Narvaez, Harris, Truglia and Ung are in various stages of prosecution, with Ung being the furthest along with a preliminary examination hearing scheduled in May.
In Ortiz’s case, only about $400,000 has been recovered, with the rest either believed to be spent or otherwise unaccounted for.
Published at Mon, 22 Apr 2019 18:57:58 +0000