A Queens auto repair shop owner lost $300,000 in retirement savings after a California man stole his bitcoin and used the funds to buy a diamond pendant, a Rolex and a Mercedes-Benz, authorities said.
The victim, 61, had 5.75 bitcoin, worth $92,000, in a blockchain digital “wallet” that was allegedly stolen by Aaron Peterson Jr., 20, in November 2022, according to the Queens District Attorney’s Office.
According to prosecutors, the digital currency’s value has now more than tripled.
Peterson, who was still a teenager at the time, was the “ringleader” of the hack, which also involved his parents, Aaron Peterson Sr., 39, and Autumn Clark, 37, and five others.
The group was indicted Friday on grand theft, money laundering, identity theft and other charges, Queens District Attorney Melinda Katz said.
Sources said the victim, a resident of Jamaica, Queens, purchased the cryptocurrency in 2017 and watched it increase in value over time.
He had not previously made any transactions and is believed to have been counting on the Bitcoin as a retirement gift when he discovered the fraudulent activity.
He reported the bitcoin theft to the office of Councilman Clyde Vannell, who notified the Queens district attorney, who opened an investigation.
Prosecutors say the funds were allegedly laundered over a period of eight months through a series of small transactions sent to individual Bitcoin wallets, using a technique known as a “peel chain.”
Authorities said participants, including Dontay Brown, 39, Ronald Morand Jr., 22, and two unidentified suspects, deposited cryptocurrency into Cash App accounts and then withdrew the money.
They put the remaining funds into a “pooled account” for his brother Peterson and used the money to buy luxury items, prosecutors said.
Incriminating videos and photos obtained by The Washington Post show Peterson Jr. counting piles of cash, showing off jewelry he allegedly purchased with stolen funds and transferring stolen cryptocurrency to his cellphone.
“The individuals allegedly responsible for this operation took a meticulous series of steps to conceal their criminal conduct,” Katz said.
Five suspects were arrested in California on July 24, and a search is ongoing for the remaining two.
Peterson and Clark each face up to 15 years in prison if convicted. They are due to appear again in October.
“We want to help Queens residents safely invest, transact and transfer value,” Vanell said.
