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The prosecution indicted a man from Nebraska for allegedly executing a cryptojacking plan that deceived two cloud providers—one located in Seattle and the other in Redmond, Washington—out of $3.5 million.

The document, lodged in US District Court for the Eastern District of New York and revealed on Monday, accuses Charles O. Parks III—45, from Omaha, Nebraska—of wire fraud, money laundering, and engaging in illicit monetary transactions related to the plan. Parks has not entered a plea yet and is set to appear in federal court in Omaha on Tuesday. He was taken into custody last Friday.

The authorities claim that Parks hoodwinked “two renowned providers of cloud computing services” of over $3.5 million in computational assets to mine cryptocurrency. The legal filing suggests that the operations were part of a cryptojacking scheme, which is a label for offenses that acquire digital currency by siphoning off computing resources and power from others through deception, hacking, or other illicit methods.

The specifics outlined in the legal document highlight the flawed economics linked with the mining of most cryptocurrencies. The $3.5 million worth of computational assets only yielded around $1 million in cryptocurrency. As a result, a significant amount of energy was consumed.

Allegedly, Parks’ scheme employed various personal and commercial identities to register “multiple accounts” with the two cloud providers and illicitly obtained extensive computational processing power and storage that he never paid for. Prosecutors asserted that he misled the providers into granting him escalated services and deferred billing accommodations, evaded inquiries from the providers about questionable data usage on unpaid bills, and subsequently utilized those resources to mine Ether, Litecoin, and Monero digital currencies.

The accused then supposedly laundered the illicit profits through cryptocurrency exchanges, an NFT marketplace, an online payment provider, and conventional bank accounts in a bid to camouflage the unlawful scheme. Once the funds were converted into dollars, Parks allegedly purchased a Mercedes-Benz, jewelry, luxurious hotel stays and travel arrangements, as well as other high-end goods and services.

Between January and August 2021, according to prosecutors, Parks established five accounts with the Seattle-based “on-demand cloud computing platform” using various names, email accounts, and organizational affiliations. He allegedly deceived and defrauded platform employees into delivering enhanced services, deferring bill payments, and overlooking the suspicious activities.

During this period, Parks continuously asked the platform to “grant him access to potent and costly instances containing graphic processing units utilized for cryptocurrency mining and instigated tens of thousands of these instances for mining cryptocurrency, utilizing mining applications to expedite token mining including ETH, LTC and XMR in diverse mining pools, and employing tools that enabled him to optimize cloud computing power and monitor active mining instances on each mining pool,” as indicated in the indictment by prosecutors.

Within a day of having one account suspended due to nonpayment and fraudulent activities, Parks purportedly switched to a new account with the provider. In total, Parks allegedly utilized over $2.5 million in services from the Seattle-based provider.

The prosecutors further claim that Parks employed similar strategies to dupe the Redmond provider into losing over $969,000 in cloud computing and associated services.

The authorities did not specify exactly how Parks managed to deceive the providers into granting him elevated services, postponing unpaid bills, or failing to detect the allegedly fraudulent conduct. They also did not disclose the names of either of the cloud providers. Nevertheless, based on the details provided, they are most likely Amazon Web Services and Microsoft Azure. Representatives from both firms did not immediately respond to email requests for confirmation.

If found guilty on all counts, Parks could face up to 30 years behind bars.