Joel Ortiz, a 21-year student at the University of Massachusetts Boston, was sentenced to 10 years in prison by Judge Edward Lee of the Santa Clara County Superior Court. Ortiz was convicted of stealing $7.5 million in cryptocurrency using sim-swapping techniques from at least 40 victims including a Silicon Valley entrepreneur, reported by the San Francisco Chronicle on April 22.
Ortiz pleaded nolo contendere to 10 charges of felony theft leveled against him in January before being sentenced on April 19. According to Santa Clara officials, this is the first conviction of its kind in the U.S.
Sim Swapping Crypto Theft
Ortiz and his henchmen engaged in a SIM swap scam in which they targeted people in the cryptocurrency sector. The accused stole millions in May last year after hacking a number of smartphones at a crypto industry conference called Consensus.
They then gained access to the victims’ phones and looted their digital assets. Officials believe that there are several ways that illegal SIM swapping can be carried out.
The hackers can call phone companies claiming to have lost their SIM cards and in need of new ones. They can use stolen social security numbers or addresses to validate their claims. If the thieves succeed in having the target number transferred to a new SIM card, they can bypass two-step authentication steps before gaining access to crypto accounts.
Ortiz managed to steal more than $5.2 million in a matter of minutes from a Silicon Valley entrepreneur in May last year.
According to the Santa Clara District Attorney’s Office:
“Ortiz was a prolific SIM swapper who targeted victims to steal cryptocurrency and to take over social media accounts with the goal of selling them for Bitcoin.”
Ortiz was arrested last year at the Los Angeles International Airport and is among the five people taken into custody by the REACT task force in connection with the cellphone scam. The REACT Task Force consists of several law enforcement agencies collaborating on combating the growing number of high-tech crimes such as identity theft.
Crooks Far From Robin Hood
Investigators retrieved only $400,000 from Ortiz when they arrested him, the rest of the loot was either spent or hidden. He used the proceeds from the crime to fund a lavish life – bought designer items such as Gucci clothing and luggage, blew $10,000 per night at Los Angeles night clubs, and even hired a helicopter to transport him and his friends to a music festival.
During two court hearings leading to the sentencing, some of the victims gave details of the damages caused by the crypto SIM swapping thefts. Prosecutor Erin West said:
“These are not Robin Hoods. These are crooks who use a computer instead of a gun. They are not just stealing some ethereal, experimental currency. They are stealing college funds, home mortgages, people’s financial lives.”