Bitcoin theft: S'porean Malone Lam, 20, attends status hearing, weighs plea deal

Singaporean Malone Lam, 20, returned to U.S. federal court on Nov. 18, for a status hearing regarding his US$265 million (S$345 million) fraud case.

This came a day after one of his alleged co-conspirators, Kunal Mehta, 45, pleaded guilty to money laundering and Racketeer Influenced and Corrupt Organisations (RICO) conspiracy, reported CNA.

The RICO charge is a U.S. federal law designed to combat organised crime.

Lam was allegedly the ringleader of the group of Bitcoin thieves in a wide-ranging conspiracy to identify victims who held cryptocurrency, steal those assets, and then launder the proceeds.

Still weighing plea deal

Lam appeared calm during the hearing and was dressed in a jumpsuit with the words “Alexandria Inmate" on the back, reported CNA.

It seemed that he was still deciding whether to take the plea deal or have his case go to trial. 

His lawyer, John Patrick Pierce, said that he had received a new offer for a plea deal from the government on Nov. 16.

Pierce did not elaborate on the new plea offer, and said he would “continue to address” this with Lam and the Department of Justice attorney Kevin L Rosenberg. 

Evidence aplenty

On Nov. 17, Pierce filed a motion to grant Lam access to a computer for discovery review.

According to CNA, this is a pretrial phase in which opposing parties exchange information and evidence.

Pierce emphasised the sheer volume of evidence in the case, stating that "an extraordinary volume of electronic discovery" was produced.

"So much so that the Court has approved the use of a discovery attorney to facilitate with organisation and review of the electronic discovery.”

He added that the “the volume is too unwieldy to be reviewed exclusively with counsel”.

On Nov. 18, Judge Colleen Kollar-Kotelly approved the funds for the computer.

The computer would not have internet access and could only be exclusively used in the library of the Alexandria County Jail, where Lam is being held.

Discovery review could influence Lam’s decision on whether to accept a plea deal or go to trial. 

Lam was ringleader, prosecutors claim

Lam is believed by prosecutors to be the ringleader of a crypto-crime ring which accessed victims' online cryptocurrency accounts by scamming them into handing over passwords and other key information.

They would then steal the victims' virtual assets and convert them into hard cash.

These, they spent on items like luxury sports cars, expensive jewellery and handbags, and private jet and luxury home rentals. 

Lam is among 13 people charged in Washington, D.C., for their roles in the conspiracy.

The group became friends via online gaming platforms.

U.S. prosecutor Jonathan Stratton previously described Lam as a “sophisticated crypto fraudster”, reported The Straits Times.

“He executed one of the most significant cryptocurrency hacks in the country.

He can do those kinds of hacking from anywhere, and there is no reasonable combination of conditions that pre-trial services can implement that will prevent his ability to further exploit crypto investors throughout the country.”

Alleged co-conspirator also joined hearing

One of Lam’s alleged co-conspirators, Ethan Yarally, 18, joined the Nov. 18 status hearing via video.

He was accused of being a “caller” for the enterprise. 

To dupe their victims into handing over access to their online accounts, CNA stated that the caller's role is to pretend to be a security technician for email providers like Google and Yahoo.

Yarally’s lawyer Robert A Feitel said his client’s case was “likely to be resolved with a non-trial resolution”, adding that he was still in discussions on a potential plea deal with the U.S. government. 

Both Lam and Yarally will return to court on Dec. 17 for an update hearing. 

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Top photo from U.S. authorities & Malone Lam