An indictment was unsealed recently, charging Anton Peraire-Bueno, 24, of Boston, and James Pepaire-Bueno, 28, of New York with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. The charges stem from an alleged scheme by the defendants to exploit the Ethereum blockchain's integrity to fraudulently obtain approximately $25 million worth of cryptocurrency within approximately 12 seconds. The brothers were arrested in Boston and New York respectively and will be presented before U.S. Magistrate Judge Paul G. Levenson for the District of Massachusetts and U.S. Magistrate Judge Valerie Figueredo for the Southern District of New York.
Deputy Attorney General Lisa Monaco stated, “As alleged in today’s indictment, the Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically sophisticated scheme they plotted for months and executed in seconds.” She added that their alleged crimes were no match for Department of Justice prosecutors and IRS agents who unraveled this first-of-its-kind wire fraud and money laundering scheme.
U.S. Attorney Damian Williams for the Southern District of New York indicted the two brothers for conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. He said that their alleged scheme calls into question the very integrity of the blockchain.
Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York Field Office commented on how these brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions.
The indictment alleges that Anton Peraire-Bueno and James Pepaire-Bueno exploited the Ethereum blockchain's integrity using their specialized skills developed during their education as well as their expertise in cryptocurrency trading. They manipulated and tampered with the process by which transactions are validated and added to the Ethereum blockchain.
If convicted, Anton Peraire-Bueno and James Pepaire-Bueno each face a maximum penalty of 20 years in prison for each count. The case was investigated by IRS-CI New York’s Cyber Investigations Unit, with the assistance of the U.S. Customs and Border Protection and New York City Police Department.
Assistant U.S. Attorneys Rushmi Bhaskaran and Danielle Kudla for the Southern District of New York are prosecuting the case. It is important to note that an indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.