A Nebraska man was sentenced to one year in prison for defrauding cloud computing providers of over $3.5 million to mine cryptocurrency worth nearly $1 million.
Charles O. Parks III (also known as "CP3O") was arrested and charged in April with wire fraud, money laundering, and engaging in unlawful monetary transactions. He was facing up to 20 years in prison in December after admitting that he didn't pay a $3.5 million bill after renting cloud computing time from two providers for his cryptojacking operation.
While the Justice Department didn't name the two companies, court documents indicate that one is headquartered in Redmond, Washington, and the other is located in Seattle, Washington, where Microsoft and Amazon are based.
According to the indictment, Parks used various aliases and corporate entities he controlled, such as "CP3O LLC" and "MultiMillionaire LLC," to create accounts with multiple cloud service providers, allowing him to access "immense amounts" of computing power and storage without payment between January 2021 and August 2021.
He used these resources to mine various cryptocurrencies, including Monero (XMR), Ether (ETH), and Litecoin (LTC), while deceiving cloud providers into granting him "elevated levels" of services and deferring billing, as well as deflecting their inquiries about unpaid balances and suspicious data usage.
"Parks told one provider that he was using the computing resources to build 'a global online training company that focuses on media, technology, and business strategy' and that his goal was 'to serve 10,000 students simultaneously,'" the Justice Department said in a Friday press release.
Parks laundered the illegal cryptocurrency proceeds using multiple crypto exchanges, online payment services, a New York City non-fungible token (NFT) marketplace, as well as bank accounts to obscure their origins.
After converting all the cryptocurrency into cash, he made various extravagant purchases, including a luxury Mercedes-Benz S AMG car, jewelry, and first-class travel expenses.
"Parks boasted about his profits so as to earn credibility as a crypto influencer. In a video uploaded to his YouTube channel in September 2022, Parks purported to share tips for achieving what he called a 'MultiMillionaire Mentality'," the Justice Department said.
"Parks branded himself as an innovator and a thought leader, but in the end he was merely a fraudster whose secret to getting rich quick was lying and stealing," added United States Attorney Nocella.