This entire story is interesting to follow. Consumers all over the world are all too familiar with the concept of phishing sites. A phishing site tricks visitors into providing criminals with sensitive information, logins, passwords, and who knows what else. In virtually every case, such a phishing site is created by criminals who reside on the darknet. One would expect those people to be well aware of how phishing sites operate and what they can do to avoid falling for these scams.
That does not necessarily appear to be the case, though. Several darknet marketplace shares fell for phishing sites set up by Michael Richo. This was done in an effort to gain access to user credentials. With these credentials, Richo could access their account on the actual darknet marketplace and clean out their Bitcoin balance. Most darknet marketplaces let users fund their native account balance with Bitcoin to avoid any delays while making a purchase.
Richo was able to breach many accounts due to these phishing sites. A total of US$365,000 worth of Bitcoin has been stolen from thousands of darknet users in the process. It is believed all of this funds belongs to darknet criminals, who would have used the money for nefarious activities. Stealing from criminals sounds a bit like what Robin Hood would do. Unfortunately, Richo had no intention of redistributing this stolen money to the poor, but rather kept it for himself.
When the FBI arrested Richo in 2014 and searched his computers, they found over 10,000 stolen login credentials. His phishing sites were crafted in a professional manner, and he succeeded in tricking experienced darknet users into giving up their login information. Richo also directed users to his phishing sites by posting fake links on forums and other marketplaces.
Remarkably, Richo transferred the stolen Bitcoin to his LocalBitcoins account. Most people are well aware of how LocalBitcoins is a popular peer-to-peer marketplace to buy and sell cryptocurrency. Richo accepted bank transfers to his Bank of America account, as well as Green Dot prepaid debit cards. It is also believed he received various Western Union and MoneyGram transfers. Whether or not these transfers were made under his real name or a fake alias, remains unknown at this point.
After nearly three years of building a case against Richo, the prosecution will likely secure a brutal sentencing. Stealing money from darknet users has finally caught up with him. It is possible he may face up to thirty years in prison for his felonies. We will know more on September 28th of 2017, as that is the date on which Richo will sentenced. It is unclear what will happen to the bitcoins stolen or the money earned from doing so.