Shakeeb Ahmed, a senior security engineer, was apprehended earlier today in New York City by law enforcement agencies. The arrest follows an extensive investigation conducted by the United States Attorney’s Office for the Southern District of New York, Homeland Security Investigations (HSI), and the Internal Revenue Service – Criminal Investigation (IRS-CI).
Ahmed stands accused of wire fraud and money laundering, allegedly orchestrating a complex attack on a decentralized cryptocurrency exchange, resulting in the theft of approximately $9 million worth of digital assets. He could be possibly in jail for twenty years if convicted.
The indictment, unsealed today, outlines the sophisticated tactics employed by Ahmed, who exploited a vulnerability in the targeted exchange’s smart contracts. By injecting fraudulent pricing data, Ahmed deceived the smart contract into generating inflated fees, which he then withdrew from the exchange as cryptocurrency. This manipulative scheme defrauded both the exchange itself and its users, who unknowingly suffered losses as a result.
U.S. Attorney Damian Williams emphasized the importance of cracking down on fraud within the digital asset ecosystem. He stated, “As alleged in the indictment, Shakeeb Ahmed, who was a senior security engineer at an international technology company, used his expertise to defraud the exchange and its users and steal approximately $9 million in cryptocurrency.”
Williams further revealed that Ahmed attempted to cover his tracks by employing a series of complex transfers across various blockchain platforms and utilizing overseas cryptocurrency exchanges. However, the efforts of law enforcement were not deterred, leading to Ahmed’s arrest and the recovery of substantial evidence.
HSI Special Agent in Charge Chad Plantz highlighted the significance of combatting financial crimes that threaten the stability and integrity of the banking system. “Ruthless and reckless attempts aimed to sabotage legitimate commerce for greed must be stopped,” Plantz stated. He emphasized the commitment of HSI to collaborate with other agencies to dismantle intricate fraud schemes and hold accountable those responsible, regardless of their operational jurisdiction.
IRS-CI Special Agent in Charge Tyler Hatcher commended the collaborative efforts of the agencies involved in tracking down fraudsters in the cyberspace. “Mr. Ahmed used his skills as a computer security engineer to steal millions of dollars,” said Hatcher.
He further revealed that Ahmed’s attempts to conceal the stolen funds were no match for the expertise of IRS-CI’s Cyber Crimes Unit, emphasizing their determination to identify and apprehend cybercriminals.
The indictment also reveals that, following the attack, Ahmed engaged in communication with the Crypto Exchange, offering to return all of the stolen funds except for $1.5 million, on the condition that the attack would not be reported to law enforcement. These details shed light on Ahmed’s awareness of the illegal nature of his actions.
Throughout the investigation, Ahmed conducted several online searches related to the attack, his potential criminal liability, and evasion strategies, underscoring his intent to evade justice. His search history included terms such as “defi hack,” “wire fraud,” “evidence laundering,” and queries regarding fleeing the United States and purchasing citizenship.
The successful collaboration between the U.S. Attorney’s Office, HSI, IRS-CI, and the Southern District of California U.S. Attorney’s Office demonstrates the unwavering commitment to investigate and prosecute cybercrimes within the cryptocurrency sector. The case is being prosecuted by the Money Laundering and Transnational Criminal Enterprises Unit and Complex Frauds and Cybercrime Unit of the U.S. Attorney’s Office for the Southern District of New York.
It is important to note that the charges outlined in the indictment are allegations, and the defendant is presumed innocent until proven guilty in a court of law. This arrest sends a powerful message to potential criminals in the cryptocurrency space, reaffirming law enforcement’s dedication to safeguarding the integrity of the financial system and protecting users from fraudulent activities.