June 13, 2024
Crypto

Theft of more than $3 million worth of cryptocurrency lands 22-year-old Portland man in prison


A 22-year-old Portland man who hijacked people’s cellphone numbers to take over their online accounts and steal more than $3 million worth of cryptocurrency, was sentenced Tuesday to six years in prison.

One victim said in court that he lost 99% of his savings and was on the verge of bankruptcy several times because of Daniel James Junk.

Assistant U.S. Attorney Quinn P. Harrington called Junk a longtime thief who started at a young age and considered quitting his criminal life only when he lamented losing millions of dollars of his stolen proceeds to other hackers in 2022.

“Mr. Junk carried out his criminal conduct incessantly because Mr. Junk cannot stop stealing,” Harrington wrote in a sentencing memo.

In March 2022, the FBI raided Junk’s apartment with a search warrant. Agents seized over 71 bitcoin that day, worth approximately $3 million at that time, according to Harrington. Junk later surrendered more cryptocurrency — about 33 bitcoin worth more than $1 million at the time, according Harrington.

Junk’s computers had browser windows open showing he’d been actively trying to steal when the FBI arrived, the prosecutor said.

One tab, for example, was open to a Microsoft OneDrive file called “Microsoft Doxed” and contained email addresses and phone numbers for potential targets of SIM-swapping.

That occurs when a thief causes a phone carrier to switch a person’s legitimate phone number over to a SIM card that the thief or their accomplice controls. The thief can then receive messages intended for the victims, which are used to reset passwords or access their personal email and bank accounts.

Another tab showed Junk logging into accounts in other people’s names and accessing phone company websites, according to the prosecutor.

“He targeted people. He gathered information about them, impersonated them, and stole from them,” Harrington wrote.

“Those victims suffered immensely as they lost control of their digital lives and finances. Some woke up to their savings gone overnight. Some saw their phones flooded with thousands of messages to distract them while he stole.”

Junk pleaded guilty in late April to conspiracy to commit wire fraud.

Seven months later, on Nov. 11, he was found tied up in a field after he was kidnapped the night before. He told police a random person targeted him because they thought he had cryptocurrency. It’s unclear where the kidnapping occurred or if anyone was arrested.

But the kidnapping didn’t stop his criminal activity as he awaited sentencing, Harrington said.

“Did I never tell u Like 2 weeks ago I’m a hacker,” Daniel James Junk texted to another person when asked how he had so much money, according to court records.

After his pretrial release was revoked in December for violating substance abuse treatment requirements and he spent about a week in custody, Junk was released to a federal halfway house in Northeast Portland. The FBI acted on a tip and searched the location in the halfway house where he was staying on Jan. 9, according to Harrington.

Investigators seized a thumb drive recovered from a trash can and found it held information on additional victims, lists of multiple target victims, including one with about 25,000 compromised email addresses, according to court records.

John E. Gutbezahl, Junk’s defense lawyer, argued for a lesser sentence of five years.

He said Junk began his crimes as a minor and has struggled with substance abuse and undiagnosed mental illness.

What might have been a case of a prolific shoplifter years ago has turned into something much more serious with the ease of the internet, Gutbezahl said.

“In another time, kids and young adults of Mr. Junk’s age would likely have been engaged in shoplifting or perhaps misuse of a parent’s credit card or checkbook,” he wrote to the court . “Now with the wide open frontier of the internet it appears that money can be obtained (stolen) with little effort. Such computer savvy of the young and the ease of availability of millions of dollars is a recipe for disaster.”

U.S. District Judge Michael W. Mosman also ordered Junk to pay $3,063,573.06 in restitution, representing the losses to five of Junk’s victims, according to court records.

— Maxine Bernstein

Email mbernstein@oregonian.com; 503-221-8212

Follow on Twitter @maxoregonian

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