Party's over for crypto scammers who went on a spending spree after a
$240 million bitcoin theft
[September 08, 2026]
By MICHAEL KUNZELMAN
WASHINGTON (AP) — They pulled off one of the largest cryptocurrency
thefts in U.S. history, duping a stranger out of bitcoin worth over $240
million. They tried to hide their digital fingerprints, carrying out a
sophisticated scheme to launder the proceeds.
And then the party started.
The scammers — a network of young men in their late teens or early 20s —
celebrated the August 2024 heist by embarking on a wild spending spree.
They purchased fleets of sports cars, flew on private jets, hired
security guards and rented mansions in Miami and the Hamptons. An
alleged ringleader, 22-year-old Malone Lam, spent over $569,000 in one
evening at a Los Angeles night club.
Their bender lasted a month before FBI agents arrested Lam on charges
that he organized a "social engineering" attack on the Washington, D.C.,
resident. Lam, an eighth-grade dropout from Singapore, has a plea
agreement hearing set for Tuesday. His conviction would be a capstone
for the government's investigation.
The charges against Lam and 17 others are an extreme example of an
increasingly common form of cybercrime. Complaints of cryptocurrency
investment fraud to the FBI rose by nearly 50% in 2025, while Republican
President Donald Trump's administration largely abandoned a regulatory
crackdown on the volatile industry.
Last year, the Justice Department disbanded a unit dedicated to
prosecuting crypto-related crimes. Meanwhile, crypto companies that
complained of unfair treatment during Democratic President Joe Biden's
presidency are enjoying the government's hands-off approach under Trump,
who took in roughly $1.2 billion from his crypto businesses in 2025.
Cybersecurity researcher Allison Nixon, who has spent years tracking The
Com, an underground subculture of young hackers united by the “insane
amount of money” that crypto fraud can generate, advocates for more law
enforcement resources to go after them.
“If we don’t seriously ramp up the resources to take these people down
and do it faster, then it’s going to spread more and more,” she said.
Scammers nabbed millions though ‘social engineering’ heist
A man identified as “Victim 7” in court filings was at home in
Washington on Aug. 18, 2024, when his phone rang. The first caller
identified himself as a Google representative inquiring about attempts
to breach his account. A second, claiming to be from the Gemini crypto
exchange, warned the man of a malware attack affecting his crypto
wallet.
The callers manipulated the man into giving them access to his Google
Drive and revealing security codes that allowed Lam to siphon off over
4,100 bitcoin, according to prosecutors. They said Lam and his friends
on the calls — Veer Chetal and Jeandiel Serrano — targeted the man
because he was a wealthy, longtime crypto investor.
A private recording captured the moment when the friends realized how
much money they just stole, according to a video posted by a well-known
private investigator of cryptocurrency crimes who goes by ZachXBT.
“Oh, my God! Bro, bro, I'm going to spaz out!” a voice on the video
said.
Once they swiped the man's savings, they used money laundering
specialists to wash it through multiple exchange platforms and convert
virtual currency into government-issued cash.
It wasn't the first social engineering scam for the friends, who met in
online gaming forums. They had teamed up on other multimillion-dollar
thefts since late 2023 using a similar playbook, according to
prosecutors.
This time, however, one of them made a costly mistake: Serrano failed to
conceal his IP address when he created an account on a cryptocurrency
exchange to hold nearly $30 million in stolen crypto, according to
prosecutors. Investigators linked the IP address to a home in Encino,
California, that Serrano was renting for $47,500 a month.
Lavish spending quickly drew attention
Serrano was vacationing in the Maldives when investigators identified
him as a suspect. Lam was in Los Angeles, where he and friends spent $4
million at nightclubs in one month, authorities say. Chetal gifted a
Lamborghini to his parents and hid a duffel bag filled with $500,000 in
cash in their laundry machine.
Word of their windfall quickly spread in crypto scammers' circles. A
week after the big score, Chetal's parents were driving in Danbury,
Connecticut, when several masked men cut them off, forced them out of
their new car, beat Chetal's father with a baseball bat, shoved the
couple into a van and bound their hands.
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This Justice Department court filing in the case against Hamza Doost
and Kunal Mehta, that includes a photo of Malone Lam, is
photographed Friday, Sept. 4, 2026. (AP Photo/Jon Elswick)
The captors, from Miami, had intended to use Chetal's parents as
leverage for extorting him into giving up his share of the stolen
crypto. But the ransom plot fell apart when witnesses notified
police, who apprehended the carjackers.
The FBI showed up to search Chetal's apartment in Brunswick, New
Jersey, on Sept. 9, 2024, and found $37 million in stolen crypto in
his possession. He agreed to cooperate with their investigation.
Lam was attracting attention, too, for spending hundreds of
thousands of dollars a night at clubs and tossing handbags worth
tens of thousands of dollars to women in the crowds. He also used
stolen cryptocurrency to buy a $2 million watch and over 30 cars,
including custom Porsches, Lamborghinis and Ferraris, according to
the FBI.
“This luxury lifestyle, of which so many young men and women could
only dream, was just built on a foundation of fraud,” a prosecutor,
William Hart, said during a recent sentencing hearing for a money
laundering co-defendant.
‘Ferris Bueller gone bad’
Serrano was wearing a $500,000 watch when FBI agents arrested him at
Los Angeles International Airport on Sept. 18, 2024. He initially
professed his innocence but soon admitted to having roughly $20
million of the D.C. man's stolen crypto, prosecutors said.
Lam was arrested at one of his Miami mansions on the same day as
Serrano. An off-duty law enforcement officer had tipped off Lam that
authorities were on their way to arrest him, the indictment says.
“We always talked about what it would be like if I were to go down,
but never thought it would be this crazy,” Lam told associates from
jail on a recorded call, according to his indictment.
The judge for Lam's initial court appearance in Miami sounded
astonished by a prosecutor's summary of his lavish spending.
"I could only think of Ferris Bueller gone bad," U.S. Magistrate
Alicia Valle said, referring to the school-skipping protagonist of
the 1986 movie “Ferris Bueller's Day Off.”
Lam's capture didn't stop the splurging. Ferro, who pleaded guilty
to a racketeering conspiracy charge last year, used stolen funds to
cover Lam’s legal expenses.
Judgment Days
Eighteen defendants have been charged. Lam would be the 11th to
plead guilty. At Lam's first court appearance, a prosecutor
estimated that his sentencing guidelines would recommend a prison
term of at least 14 years upon conviction.
U.S. District Judge Colleen Kollar-Kotelly, who presides over Lam's
case, already has sentenced three of his co-conspirators. She
sentenced two money launderers to prison terms of approximately six
years.
Chetal pleaded guilty to conspiracy charges in November 2024 and
awaits sentencing. Serrano's charges remain pending.
Tucker Desmond, who pleaded guilty to destroying evidence of other
plotters' crimes, was sentenced to probation. Desmond apologized at
his sentencing hearing in March, saying he “got obsessed with the
image of success rather than actually becoming a hard-working
individual myself.”
Ferro declined to address the court during his sentencing hearing in
May. His attorney, Kevin Wilson, described the co-defendants as
mischievous “young kids," but the judge didn't accept that as an
excuse.
“Being young only goes so far,” Kollar-Kotelly said.
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