Homeland Security Charges Las Vegas Man Over Fake Crypto Recovery Scheme
The United States Homeland Security Investigations (HSI) has charged a Las Vegas resident for operating a fraudulent cryptocurrency recovery scheme.
On August 5, the Department of Homeland Security announced that its New York task force has charged Michael Lauchlan in connection with a scam involving a fake crypto asset recovery business.
Lauchlan ran Coin Dispute Network (CDN), which purported to offer services such as blockchain analysis, tracing, and the recovery of lost cryptocurrency for a fee.
Instead of providing legitimate recovery services, Lauchlan allegedly pocketed the fees and, in some cases, extracted additional Ether from customers through false promises and fraudulent blockchain tracing reports.
HSI reported that more than 175 CDN customers were interviewed, none of whom successfully recovered any cryptocurrency through the service.
Approximately $14,000 worth of cryptocurrency belonging to CDN users was traced to the CoinEx crypto exchange.
The case marks the first takedown of a crypto recovery site by the Manhattan District Attorney’s Office.
Lauchlan, who also used the alias Max Handler, was charged in Manhattan Criminal Court with grand larceny and two counts of scheming to defraud.
“Michael Lauchlan allegedly exploited his customers’ lack of experience with the cryptocurrency industry and in turn fleeced them out of thousands of dollars in sham services and stolen assets,” HSI New York Special Agent in Charge Ivan J. Arvelo said.
The CDN website was seized by law enforcement in July 2023 following a year-long investigation.
Lauchlan was arrested on July 9.
The fraudulent activities reportedly date back at least two years, with victims questioning CDN’s legitimacy and reporting losses on Reddit.
In November
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