DOJ Charges $236M Crypto Crime Ring That Spent Millions at Nightclubs

In brief

Twelve more defendants have been charged in a sweeping cyber-fraud case.
The alleged cybercrime ring laundered crypto through mixers, shell companies, and stuffed toys.
It comes as the FBI reported crypto investment fraud had spiked to $5.8B in losses last year.

U.S. prosecutors have charged 12 more people in connection with a cybercrime ring that allegedly stole more than $263 million in crypto through a sophisticated social engineering and hacking operation and spent the proceeds on expensive cars, nightclub blowouts, and luxury goods.

The charges, unsealed Thursday in a four-count indictment against Malone Lam, 20, and Jeandiel Serrano, 21, were announced by the U.S. Attorney’s Office for the District of Columbia, the FBI, and IRS Criminal Investigation. Serrano is not in the new indictment.

Alongside Lam, the new suspects include both U.S. citizens and foreign nationals, with arrests made in California and warrants issued for two individuals believed to be in Dubai.

All but one are aged between 18 and 21, with two defendants’ identities not known beyond their online monikers.

Of the thirteen, twelve defendants are charged with RICO conspiracy, nine have an additional charge of conspiracy to launder monetary instruments, and eight conspiracy charges to commit wire fraud.

A final defendant, 19-year-old John Tucker Desmond, is charged with obstruction of justice for destroying evidence.

The case comes amid a broader surge in cybercrime. The FBI’s Internet Crime Complaint Center reported $16.6 billion in internet crime losses in 2024, up 33% from the year prior.

Crypto-related fraud made up a significant chunk, with 149,686 complaints. Funds lost totaled more than $9.3 billion in losses, up 66% over 2023.

Spending spree

According to the indictment, the group operated from at least October 2023 through March 2025, initially bonding over online gaming platforms.

Members assumed various roles, from database hackers and target identifiers to callers who impersonated support agents to trick victims and launderers who converted stolen crypto into cash.

Group member Marlon Ferro, 19, conducted physical burglaries to steal crypto wallets, including a July 2024 break-in at a New Mexico home.

The defendants are also accused of laundering funds through mixers, peel chains, VPNs, and shell companies.

Money was used for the purchase of at least 28 exotic cars—some worth up to $3.8 million each—private jet rentals, several half-million-dollar nightclub tabs, and gifting Hermes bags to girlfriends.

Bulk cash was reportedly shipped hidden inside stuffed Squishmallows, a popular soft toy brand.

Members of the group rented luxury homes in the Hamptons, Los Angeles, and Miami, and hired private security guards.

Prosecutors said forfeited assets include Lamborghinis, Ferraris, Rolls-Royces, designer clothing and watches, champagne, and a yellow teeth grill.

Lead defendant and “organizer” Lam allegedly continued to orchestrate activity even while in pretrial detention, directing associates to deliver luxury goods to his partner.

The investigation remains ongoing, with support from FBI offices in Los Angeles and Miami.

Edited by Sebastian Sinclair