On the shallow surface of Instagram, Ramon “Hushpapi” Abbas was the quintessential influencer. A flamboyant Nigerian, he displayed a lavish lifestyle that included private jets, luxury cars, and designer clothing. His fascinating adventures have earned him over 2 million followers and millions of dollars. However, his post hid a dark reality.
The 41-year-old was “one of the most prolific money launderers in the world,” according to the FBI.
By his own admission, Hushpuppi conspired to launder more than $300 million in just 18 months. One of his alleged clients was North Korea’s supreme leader, Kim Jong Un.
Hushpuppy’s interest in cybercrime, cryptocurrencies, and social media exemplified a new era in his profession. Technology was transforming money laundering.
His escapades caught the attention of Geoff White, a UK-based investigative journalist.White was praised lazarus robbera podcast and book about cybercrime groups with ties to the North Korean state.
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In 2019, the group infiltrated Bank of Valletta in Malta.
“At that stage, they’re in a bank vault,” White told TNW. “They can withdraw the money, but they have to send it somewhere. Obviously they can’t send it to Kim Jong Un’s bank account, so they dial up Hushpuppy instead.”
Hushpuppi was open for business. The scammer provided a bank account to launder the stolen money. Prosecutors said the suspect helped launder approximately $14.7 million in money obtained from the raid.
The Malta heist exposed the value of tech-savvy money launderers. Even a talented hacker backed by a nation-state needed an ally like Hushpuppi.
“North Korean hackers are said to be very good at breaking into banks and financial institutions,” White said.
“They’re not necessarily good at stealing money once they get there. They need allies and accomplices who know what to do, so they turn to accomplices on the dark web.”
These accomplices became the subject of White’s next book. Rinsed. He will discuss his research in detail at the TNW conference in Amsterdam on June 20-21. Ahead of the event, White shared a glimpse of the survey results.
Hushpuppi’s social media fame made him an unusual accomplice. He used Snapchat and Instagram to recruit money mules to help transfer stolen money from victims to criminals. As profits passed through a web of bank accounts, they became harder to track.
Future money mules were offered large sums of money for small jobs and even windows into much larger fortunes. Hushpuppi, flaunting his wealth, was a living poster boy for potential rewards.
“These high-tech money launderers weren’t just helping cybercriminals.
Young followers are especially susceptible to temptation. In 2019, researchers found People under the age of 25 are six times more likely to become victims of crime using social media platforms than those over 50.
“Social media channels don’t just give you a way to find and communicate with people,” White says. “Mule recruiters also allow you to show off how much money you make. To portray a lavish lifestyle of wearing Yeezys and driving Bentleys. And that’s when hiring money mules. It’s a powerful tool for doing that.”
It certainly proved powerful for Hushpuppi. According to the FBI, the charismatic felon has built a worldwide network of mules who move funds at his behest. They will either use their existing bank account or open a new one. Cash will flow between the two parties through electronic transfers.
Although this was a profitable business, it also had the drawback of costing a lot of money.
Investigators used Hushpuppi’s Instagram and Snapchat to track his whereabouts and collect evidence. The findings led to an 11-year sentence in federal prison and an order to pay $1.7 million in restitution to the victims.
Still, this was nothing compared to the amount of money in circulation in cryptocurrencies, the technology industry’s biggest contribution to modern money laundering.
Cryptocurrency can be a force for good. It can bring banks to the unbanked, disrupt centralized financial systems, and add privacy to transactions. All of these attractions appeal to law-abiding citizens. Unfortunately, they are also very attractive to money launderers.
With no central authority to verify and monitor transactions, criminals are able to exploit regulatory gaps and quickly move funds across borders.
With large amounts of money in circulation at constantly fluctuating valuations, it is also easier to hide tainted funds. Once the price of an individual coin reaches his 10,000% growth rate, the holder will be able to easily account for the sudden increase in wealth.
You can also open an account for free right away. Computer scripts can be used to carry out large-scale money laundering schemes involving thousands of transfers.
This is a process that is becoming increasingly accessible. Specialized cryptocurrency money laundering services no longer require technical expertise.
according to chain analysisIn 2022, nearly $23.8 billion in virtual currency was transferred from fraudulent addresses, a 68% increase over 2021. Mainstream centralized exchanges were the largest recipients, accounting for just under half of all funds.
Another reason for this growth is cost reduction. Traditional money launderers could charge first-time customers a whopping 60% of their profits. White says. Even regular customers may pay 40-60%.
In the world of cryptocurrencies, fees can be significantly lower. Mr. White knows of a broker whose commission is as little as 4%. Instead, they convert cash into cryptocurrency, clean it through various transactions, and send the clean money to customers’ accounts.
“Depending on the size of your company, this could mean millions of pounds more in profits than if you used a traditional money launderer,” he says.
The cryptocurrency industry may not only facilitate money laundering. It can also be a target.
Another use for cryptocurrencies is blockchain-based games. These games use a business model called “Play-to-Earn” to reward successful players with tokens with real-world monetary value and their NFTs.
One of the most popular titles in this genre is Axie Infinity, which attracts millions of players. It has also attracted the attention of cybercriminals.
In March 2022, hackers stole $600 million worth of cryptocurrency from the digital ledger powering Axie Infinity. Investigators soon identified the culprits as North Korea’s Lazarus Group.
The gang has pulled off the largest cryptocurrency heist in history. To launder the stolen property, they turned to a service called Tornado Cash.
Tornado Cash is known as a “crypto mixer.” These services collect digital assets from various users, combine them, and redistribute funds to designated recipients.
“This helps people protect their privacy, which is important in cryptocurrency trading,” White says. “Unfortunately, it also helped North Korea successfully launder $488 million in stolen funds.”
A technology invented by libertarian programmers was being misused by one of the world’s most authoritarian regimes.
US in August 2022 government The service has been blacklisted. The two founders of Tornado Cash were charged with laundering more than $1 billion in criminal proceeds.
The Lazarus Group has launched another headline-grabbing case of high-tech money laundering. But those were just the tip of the iceberg.
researching a new bookWhite found that new methods were becoming mainstream.
“We realized that high-tech money launderers weren’t just helping cybercriminals,” White said. “There are all kinds of criminals: drug dealers, prostitution rings, child sex abuse rings. They all generate money, and that money has to be laundered somewhere, but often , that money is falling into the same funnel.”
As for Hushpuppi, he remains in U.S. custody, but his legacy as an influencer lives on.
“I hope that one day more young people will join me on this journey,” his last Instagram post read.
Advances in money laundering suggest his wish has come true.
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