Two Canadian Nationals Plead Guilty for Bitcoin Fraud
PORTLAND, Ore.— Karanjit Singh Khatkar, 23, and Jagroop Singh Khatkar, 24, residents of Surrey, British Columbia, Canada, pleaded guilty today for conspiring to commit wire fraud and money laundering in a scheme to steal bitcoin from an Oregon resident.
According to the indictment, beginning in October 2017 and continuing until August 2018, the defendants used a Twitter account with the name @HitBTCAssist to trick victims into thinking they were communicating with a customer service representative from HitBTC, a Hong Kong-based online platform used to exchange virtual currency. HitBTC provides its customers with web-based “wallets” to store virtual currency and make transactions.
Using the fraudulent Twitter account, the defendants responded to the Oregon victim’s questions about withdrawing virtual currency from her HitBTC account. The defendants convinced the victim to send information they could use to log on and take over her email, HitBTC and Kraken accounts. Kraken is a U.S.-based online platform that offers services similar to HitBTC.
The defendants initiated transfers of 23.2 bitcoins from the victim’s HitBTC account to Karanjit Khatkar’s Kraken account. Karanjit Khatkar in turn transferred approximately 11.6 in stolen bitcoins to Jagroop Khatkar’s Kraken account. The stolen bitcoins have an estimated present value of approximately $160,254.
On July 18, 2019, Karanjit Khatkar was arrested upon arrival at the McCarran International Airport in Las Vegas, Nevada and later ordered detained pending trial. Jagroop Khatkar appeared out-of-custody for today’s change of plea hearing.
Conspiring to commit wire fraud and money laundering are punishable by 20 years and 10 years in prison, respectively, a $250,000 fine or twice the pecuniary gains or losses resulting from the offense if over $250,000, and three years’ supervised release. Both defendants will be sentenced on March 17, 2020 before U.S. District Court Judge Michael H. Simon.
As mandated by their plea agreements, the Khatkars delivered a check of $142,349 as a prepayment of restitution to their victim at the change of plea hearing. This prepayment along with the $6,000 in U.S currency and $230 in Canadian currency seized by law enforcement equal the value of the bitcoins stolen from the victim. The Khatkars have agreed to pay restitution in full to their victim, which may exceed the prepayment amount, as ordered by the court at sentencing.
This case was investigated by FBI and is being prosecuted by Quinn P. Harrington and Julia E. Jarrett, Assistant U.S. Attorneys for the District of Oregon.