When the cops arrested scammer Evan Leslie McMahon in March 2019 they found a lot more than just the bootleg Netflix logins that enabled his clients to watch The Witcher on the cheap.
Also in the possession of the early-20s hacker were nine electronic wallets containing an alphabet soup of cryptocurrencies – bitcoin, bitcoin cash, ethereum, digibyte, XRP, stratis, bitcoin gold and litecoin – that he bought with the proceeds of his crimes.
McMahon escaped jail when he was sentenced in April last year for “providing a circumvention service” and “dealing with the proceeds of crime”, receiving an intensive correction order that allowed him to serve his two-and-a-half-month sentence in the community.
But he forfeited the crypto, which was initially worth $460,000, but by the time of his sentencing had risen to an estimated value of $1.2m, making it the biggest stash of tokens seized by the commonwealth to date.
To collect fees from customers of his websites, HyperGen, WickedGen, Autoflix and AccountBot, McMahon used 175 PayPal accounts held in fake names – aliases included Zac Kentish, Izabella Sjogren and Samuel Binns, according to court documents.
He then converted some of the proceeds into crypto, federal police said.
PayPal declined to comment when asked how McMahon had managed to open 175 accounts with the company and what this said about its anti-money laundering systems.
“We devote significant resources to identify, investigate and stop improper or potentially illegal activity on PayPal,” a spokesman said.
Crypto seizures on the rise
Australia’s financial security agency, Austrac, says the criminal use of cryptocurrency is no longer confined to online scammers like McMahon, who ran a series of websites selling logins to Netflix, Spotify and other subscription sites that he bootlegged using software that automatically generated the keys.
“As legitimate use of cryptocurrency increases, we’re seeing a sort of comparable increase in abuse,” says Austrac’s national manager of intelligence operations, Michael Tink, who runs teams at the agency concentrating on cybercrime, national security and money laundering.
“As an example, where a crime group might have previously been sending money offshore using the banking sector or a remittance dealer, in some cases – not a lot – we might see them trying to deposit criminal proceeds through a digital currency exchange provider and send money to a counterpart offshore using cryptocurrency itself,” he says.
Tink is keen to point out that using cryptocurrency to launder the proceeds of crime is still “fairly” niche – but it is on the rise.
While the seizure of McMahon’s wallets was the biggest crypto bust in Australia at the time, larger amounts have since been frozen by regulators investigating possible fraud.
In October last year, the Australian Securities and Investments Commission obtained federal court orders freezing bitcoin estimated to be worth between $7m and $22m that were allegedly related to what the corporate watchdog claims was an unlicensed superannuation investment scheme run by Gold Coast couple Aryn Hala and Heidi Walters. Asic alleged in court documents that at least $2.4m of investor money had been used to purchase crypto-assets. Asic’s investigation is continuing and no charges have been laid.
Overseas enforcement agencies have also seized large amounts of crypto. Last month, the US FBI seized 3,879 bitcoin, which it claims in documents filed in the American federal court system are the proceeds of a US$155m ($216m) fraud perpetrated against insurance company Sony Life by employee Rei Ishii. Ishii has been charged with fraud in Japan and is yet to face trial.
In another crypto seizure case before the US courts involving 9.881 bitcoin (about $590,000), authorities allege bitcoin was used to launder ill-gotten gains.
Between May 2019 and February 2021, suspected money launderer Fernando Berrocal, a businessman in the perfume industry, picked up bulk cash from locations both inside and outside the US of US$2.3m ($3.2m), a Homeland Security agent alleges in an affidavit filed in forfeiture proceedings in the federal court system.
This was made up of “$1m in illegal gambling proceeds and $1.3m in narcotics proceeds”, Homeland Security agent James Barden said in the affidavit.
In addition, bank accounts owned or controlled by Berrocal received “$1,789,628.40 in proceeds generated by various financial frauds, many targeting elderly US residents,” Barden said.
He accused Berrocal of controlling “multiple commercial and personal bank accounts and shell-companies in the United States and elsewhere”, as well as “multiple virtual currency accounts and/or Bitcoin addresses”, which were used to launder dirty money.
“Berrocal conducted numerous financial transactions, many involving virtual currency, specifically bitcoin, to launder and transfer criminally derived proceeds from the United States to individuals and organizations outside the United States,” Barden said.
The agent said Berrocal admitted that the bitcoin was the proceeds of his criminal activity “during a consensual interview with law enforcement” in March last year. No charges have been laid and the investigation continues.
The regulators are watching
Cryptocurrencies had another of their moments in the sun last year, with the Commonwealth Bank announcing it would allow customers to buy, hold and transfer tokens through its app, ads for trading platforms dominating bus stops and the treasurer, Josh Frydenberg, talking about bringing exchanges – which are prone to collapse – into Australia’s regulatory system.
But sceptics reckon the hype conceals a terrible truth: cryptocurrencies are fantastic for speculators but, despite many attempts, not much use as a means of exchange unless you are buying something you shouldn’t be.
“Paying for things the government doesn’t want you to buy was the first actual payment use case for cryptos – the Silk Road drug market – and it’s still about the only one,” says David Gerard, the author of two books on cryptocurrencies and a keen and critical observer of the sector.
“People only use crypto for payments when they can’t use good money for some reason, so they use this stuff instead. That’s expanded into large-scale ransomware. Ransomware existed before crypto, but not at this scale – that’s 100% on cryptos.”
Meanwhile, dirty cash from crime continues to wash into a crypto ecosystem electrified by speculative investment that, despite frequent crashes, has driven the price of bitcoin up from a few hundred dollars in 2015 to close to $60,000 today.
“The crypto system is not, technically, a Ponzi scheme – it just works like one,” Gerard says.
“Early buyers can only be paid out with money from later buyers. The whole purpose is to sell magic beans to people for real money, and convince them that these objects are the future of anything other than getting skinned.
“The general answer is: there’s no such thing as a get rich quick scheme, magic doesn’t happen, if there’s ever ‘one weird trick’ then it’s one weird trick for picking your pocket.”
Austrac has limited visibility of what goes on inside this booming market. Currently, exchanges that register with it only have to report suspicious or large movements of cash into their coffers or payments out – not transfers of crypto that occur between market participants.
However, Tink says the idea that transactions occurring on the blockchain – the distributed ledger that records crypto transactions – are completely anonymous is wrong.
“Our analysts also have access to other open source commercially available and more classified tools and data sets that help them track transactions as they occur through the blockchain and also link that to other data and criminal intelligence holdings,” Tink says.
He points out that one advantage of the blockchain technology underlying cryptocurrencies is that the data is publicly available.
“You might not always know who is behind a particular coin address, but it allows you to track transactions through with other data sets. It allows analysts to look at attributing wallet addresses to real world people.”
I am a child of the internet. I was always drawn to computers and tech, and used to beg my dad to bring us to his office on a weekend so we could use the high-speed internet to play Neopets games. As I got older it was all MSN, MySpace, Paramore fan forums, Tumblr, Twitter and now TikTok. I want nothing more than to zone out and look at my little pictures.
One of my favourite things about the internet is that it allows you to see everyone’s best joke. The moment in their life where they were at their absolute funniest – whether it be because they had a moment of brilliant wit or because they got pulled through a panel roof while practising for a high school play (I assume).
The internet has rotted my brain with the following content. Please now allow it to rot yours.
The Pandemic Years have (and continue to be) difficult for everyone. Who among us has not, at one time or another, needed to just explain themselves by saying: “It’s mental illness, innit?”
2. Perfect burger
When I showed this video to my fiancee, she flatly said: “I like how absurdist it is.” That’s her code for, “I don’t get it, but I’m happy you’re happy.” And I am happy. Look at how confident and brave this burger is – ready to take on the world, come what may. I wish to be the burger.
I have been to court precisely once because I inadvertently got in a cop’s way and he was grumpy about it so he booked me. The penalty was dismissed but not before I cried in front of the judge trying to explain what happened because I was so stressed out. Court is a daunting place and I simply cannot imagine walking in there with any level of irreverence. However, I’m extremely glad there are people who simply do not care, will say whatever damn thing and then an internet angel turns them into TikToks.
4. Turtle choir
This tweet is made all the more majestic by the vaguely threatening Sylvanian Families-style profile picture, on a Twitter account named @bigfatmoosepssy.
5. Trying coffee with pasta water
Climate change is slowly turning the Earth into a barren ball of pain as Mother Nature smacks us for being extremely bad. Even though individual responsibility for climate change isn’t enough to turn the tide, I still applaud those who try. Twitter user @madibskatin woke up in the morning and decided to be the change she wants to see in the world, tastebuds be damned. One could argue that it’s pretty obvious that pasta water isn’t going to make a good coffee but like my dad says as he puts pineapple juice in his coffee: “If no one tries it, how will we know? What if it’s secretly good?”
6. Soaring, flying
If you look closely, this video is actually a metaphor for the ways in which we attempt to break free from our circumstances, yet are entirely at the mercy of them.
7. You cannot trick me
This may be a parody Twitter account, but the spirit of Gail Walden speaks truths. There is no victory sweeter than that which is gained on thine enemy’s own soil.
8. Self-deprecating jokes
Humour is a coping mechanism. I am coping.
Dairy products are delicious. Ice-cream? Revolutionary. Cheese? Life-changing. Whipped cream on a pavlova? Essential. But milk? Disgusting. It’s not a drink, it’s a stepping stone to greater things.
I am absolutely 100% not at all lactose intolerant (I promise) so I don’t relate to this video at all (not even a bit).
The artist formerly know as F5 Networks – it moved to plain old F5 in November – is clipping revenue forecasts for fiscal ’22 by $30m to $90m because it can’t source enough specialised chips to produce systems.
The continued impact of the shortfall was outlined in F5’s Q1 results to 31 December and subsequent earnings conference call, during which chief exec François Locoh-Donou opened up on the challenge of suppliers cancelling orders because they can’t meet demand.
“As a result of persistent strong system demand, our systems backlog continued to grow in Q1,” he said. “Over the last 30 days, suppliers of critical components that span a number of our platforms have informed us of significant increases in decommits.
“These came in the form of both order delivery delays and sudden and pronounced reduction in shipment quantities. The step function decline in components availability is significantly restricting our ability to meet our customers’ continued strong demand for our systems.
“Like others in the industry, we are seeing worsening availability of specialized networking chipsets. Within the last 30 days, we have learned that deliveries for 52-week lead time components or at a year ago have been pushed out and that our expected quantities have been reduced.”
Group turnover grew 10 per cent year-on-year to $687m in F5’s Q1, fuelled by a 47 per cent leap in software to $163m, 2 per cent in services to $344m, and 1 per cent in hardware to $180m.
“Our software transition continues to gain momentum,” said Locoh-Donou, adding later in the earnings call: “While we are solely disappointed that supply chain challenges have gated our ability to fulfil customer demand for systems in the near term, we are more confident than ever in our position, our strategy and our long-term opportunity.”
The backlog grew by 10 per cent so the sales pipeline is looking healthy, said the exec, who was at great pains throughout the call to tell analysts: “It absolutely is a supply issue. And the revision we’ve just done to our annual guidance is 100 per cent linked to the supply issue.”
For the year, F5 now expects sales to grow 4-8 per cent ($610m to $650m).
“The issue with our supply chain has deteriorated steadily. And last year, we were not able to ship the demand, which is why our backlog grew so much during the year.
“Things have been getting worse. And at the beginning of our fiscal year, when we were doing the planning for this year, we actually took into account the number of decommits that we were getting from various suppliers and a situation that was already very tight on a number of components.”
He said in the past month it was seeing more than 400 cancellations from suppliers, “and we were running about 30 per cent less than that even just a month ago – the situation is quite unprecedented.”
In a bid to ameliorate the supply situation, F5 said it is working to design and qualify replacement parts – which may improve thing in the second half of the year. It is also trying to pre-order more components.
F5 is confident that it will not see orders cancelled. “The demand we have is very real. Our lead times, unfortunately, have gotten progressively worse over the last five, six quarters, but we haven’t seen any increase in order cancellation, and we don’t expect to see that going forward,” Locoh-Donou stated.
Supply chain problems with silicon components have been hitting companies in the IT industry and beyond for multiple quarters now, and networking vendors are no less vulnerable.
Last year, Arista warned that lead times for key chips were extending out to 60 weeks, twice what would be expected before the pandemic. Both Arista and Juniper announced they were being forced to bump up prices in November, while Cisco warned its buyers and investors that supply chain issues were likely to persist for several months more, although it expected to see some improvement in the situation for Q3 and Q4, taking us into the second half of 2022. ®
Munters, a Swedish air treatment technology company, will use the Edpac acquisition to expand into the European market.
Irish data centre equipment manufacturer Edpac has been acquired by Swedish company Munters in a €29m deal.
Based in Carrigaline, Co Cork, Edpac manufactures cooling equipment and air handling systems for data centres in the European market, with additional sales in the Middle East, South America and Asia.
For Munters, which has significant operations in North America, the acquisition is an opportunity for it to expand in the European market. Once complete, the deal will see the transfer of Munters’ technologies and engineering capabilities to Ireland.
“The European data centre market is a prioritised segment for Munters, and the acquisition is a significant step in our growth strategy,” said Klas Forsström, president and chief executive of Munters.
Forsström said that Munters’ experience in the North American market will provide Edpac with “opportunities for further profitable growth” by collaborating on “technology development and establishing unified processes”.
Edpac has two manufacturing facilities in Ireland – Newmarket and Carrigaline – and employs around 150 people in the country. Currently a manufacturing partner for Munters, Edpac sees approximately 7pc of its revenue come from the sale of Munters products.
In the financial year ending April 2021, Edpac reported net sales of €17m and earnings before tax of €1.7m. According to The Irish Times, Edpac managing director Noel Lynch has led the company since it was bought from its Swiss parent in 1991.
“We are excited to welcome Edpac to Munters. Edpac brings an attractive, differentiated customer base and high-quality products,” Forsström said, adding that Edpac’s operating model “is a perfect match with Munters ways of working.”
Founded in 1955, Munters aims to create energy efficient air treatment technologies for customers in a wide range of industries. Listed on Nasdaq Stockholm, it employees 3,300 employees across 30 countries – with annual sales exceeding 7bn Swedish krona in 2020.
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