The scammer, the fixer and the cop: Inside L.A.'s world of millionaire 'crypto kids'

Daniel landed successful Los Angeles with his woman and a hard thrust containing $350,000 successful bitcoin.

The 17-year-old’s manner was intended to gully attention: Parties astatine the hottest clubs. Rented sports cars. Cuban nexus chains. Imitation Richard Mille watches.

California is afloat of young radical who were transformed into millionaires erstwhile crypto went mainstream. But Daniel didn’t conscionable bargain integer wealth erstwhile it was inexpensive and ticker it skyrocket successful value. He stole it.

The teen — who was identified lone by his archetypal sanction erstwhile helium testified arsenic a cooperating witnesser astatine a caller proceedings — was portion of thing called “the comm,” which national authorities accidental was a escaped web of con artists who treated defrauding investors of millions of dollars similar a game.

Holed up successful lavish rental homes successful Encino and Malibu, they hatched schemes to instrumentality radical into giving up entree to crypto accounts with nine-figure balances. They gleefully screen-recorded immoderate of the heists, prosecutors wrote successful tribunal documents charging them with racketeering, fraud and wealth laundering.

For Daniel, a rail-thin teen with a wispy goatee and heavy achromatic hair, the amusive was not needfully spending the stolen funds connected cars, cocaine, jewelry and his 23-year-old girlfriend, but flaunting his manner connected societal media.

It got him noticed by the incorrect people.

Daniel was the prima witnesser of a proceedings successful February and March that revealed a subculture revolving astir recently created crypto wealth. There are “crypto kids” — immoderate scammers similar Daniel, others who acquired their riches legitimately. There are fixers who acceptable up them up with homes, cars, apparel and different luxuries.

And past determination are those who preyed connected the crypto kids. When masked, equipped men forced their mode into Daniel’s flat successful 2024, they identified themselves arsenic constabulary officers.

One of them had worked for the Los Angeles Police Department, but helium wasn’t connected the occupation erstwhile helium came for Daniel.

According to 1 witness, the erstwhile serviceman justified taking the teenager’s crypto astatine gunpoint, calling it “stealing thing from idiosyncratic who stole.”

‘Ghost’ and the illicit crypto economy

On the witnesser stand, Daniel didn’t accidental wherever helium grew up. He spoke English without the hint of an accent and said he’s besides fluent successful Spanish and Portuguese. A detective testified the teen showed him a passport that said helium was calved successful Rio de Janeiro, but helium acknowledged the papers could person been fake.

Daniel said helium met members of the comm done the encrypted messaging app Telegram. As helium described it, they were not hackers. They stole fortunes done deceit, moving successful performance to impersonate employees from well-known crypto exchanges.

Daniel testified helium called radical with accounts connected Coinbase and different platforms, pretending to beryllium a lawsuit work representative. After tricking investors into handing implicit login access, helium transferred bitcoin and different currencies into “hardware wallets” beyond the scope of instrumentality enforcement, Daniel said.

In 1 of the astir brazen heists attributed to the comm, Malone Lam, a 20-year-old Singaporean nationalist who was past surviving successful Los Angeles, allegedly stole $248 cardinal successful 2024.

Malone Lam has pleaded not blameworthy to racketeering, fraud and wealth laundering. Prosecutors allege the Sinagaporean nationalist stole astir $250 cardinal from a bitcoin investor.

(U.S. District Court, District of Columbia)

While staying astatine a rented Encino mansion, prosecutors say, Lam plotted with respective accomplices to instrumentality an capitalist from Washington, D.C., into reasoning helium was being hacked. After Lam’s accomplices purposely utilized incorrect credentials to entree the man’s Google account, the capitalist got a information alert, Jonathan Stratton, an adjunct U.S. attorney, said astatine Lam’s bail hearing.

Lam has pleaded not blameworthy to charges of racketeering, fraud and wealth laundering.

According to Stratton, Lam, posing arsenic a Google representative, called the capitalist and convinced the antheral to springiness up his password and information codes to forestall what Lam described arsenic a hacking attempt. Lam allegedly saw the antheral had an relationship with Gemini, a crypto brokerage, and an accomplice posing arsenic a Gemini typical past called the investor.

Convinced his Gemini relationship had been compromised, the antheral agreed to download what helium thought was a information program. In fact, it was a distant desktop exertion that enabled Lam and his conspirators to transportation 4,000 bitcoins to themselves, Stratton said. If Lam had tried to transportation disconnected that magnitude of wealth successful $100 bills, the authoritative said, it would person weighed much than 2½ tons.

Afterward, Lam embarked connected “what lone tin beryllium described arsenic an outrageous and exorbitant spending spree,” Stratton said. According to the prosecutor, Lam spent $569,525 successful 1 nighttime astatine an unnamed L.A. nightclub, and helium became “notorious” for throwing Hermes bags worthy tens of thousands of dollars into crowds of partygoers.

On Telegram, Lam was known arsenic $$$, King Greavys and Anne Hathaway.

Daniel was known arsenic Scare. Testifying successful a downtown L.A. courtroom, Daniel, dressed successful a charcoal suit, achromatic formal garment buttoned to the pharynx and Louis Vuitton belt, said idiosyncratic other had already claimed the Scare grip connected Instagram, truthful helium bought it from them for $16,000. He posted photographs that showed disconnected trappings of luxury without ever revealing his face.

One depicted a Louis Vuitton container with the caption: “I’ve ne'er seen a cheater suffer truthful wherefore would I play fair?”

When helium arrived successful L.A. successful November 2024, Daniel had nary recognition past and couldn’t rent an flat successful his ain name. He said that done a nightlife promoter, helium was introduced to Pierre Louis, a fixer who specialized successful getting affluent radical what they wanted.

Louis, 27, testified helium grew up successful Montreal. In a heavy Quebecois accent, helium said helium acceptable up rappers, athletes and different affluent clients with rented cars, homes, jewelry and clothes. Although helium catered to affluent radical and hung retired successful posh nightclubs connected the Westside, Louis said helium made lone astir $50,000 a twelvemonth and lived successful an flat successful Burbank.

When helium archetypal met Daniel, Louis testified the teen tried to scam him by offering to assistance with his crypto investments. That didn’t enactment disconnected Louis, who rented Daniel a high-rise flat connected Wilshire Boulevard. The teen sent him $60,000 successful bitcoin for six months’ rent.

Louis offered different service: a mode to launder stolen crypto. Unable to usage morganatic exchanges, Daniel testified helium converted immoderate by trading it for golden with a downtown L.A. jeweler. He besides relied connected Louis to link him with radical consenting to wage currency for bitcoin without asking questions.

A teen testified helium laundered stolen crypto done buying golden successful the downtown L.A.’s Jewelry District.

(Myung J. Chun/Los Angeles Times)

Through communal friends successful the luxury car rental business, Louis said, helium had met a antheral called Ghost who had a web of crypto buyers. Louis testified that helium sent Ghost funds he’d received from Daniel and different crypto kids, and Ghost brought him cash. Both Louis and Ghost charged their clients fees of 2% to 5%, the complaint varying depending connected who was involved, Louis said.

After gathering Ghost, Louis said, helium usually brought the currency to a car rental concern successful Van Nuys called Drive-LA to usage its electrical wealth counter. The company, which owned a fleet of Lamborghinis, Porsches and Bentleys, was tally by a erstwhile serviceman who aspired to beryllium much than conscionable a patrol cop.

Lamborghinis and ‘$5 wrench attacks’

Eric Halem created Drive-LA successful 2021 arsenic a broadside gig to his time occupation patrolling the San Fernando Valley for the LAPD.

The business, which besides offered customers entree to jets, homes and chauffeurs, gained a loyal pursuing among section rappers and societal media influencers. During an interior affairs interview, Halem said that helium raked successful astir $1 cardinal a twelvemonth successful nett from Drive-LA, according to a section root who requested anonymity successful bid to sermon unit matters. He claimed successful online interviews that helium had interests from task capitalists and was looking to expand.

A 13-year seasoned of the LAPD, Halem discontinue the unit successful 2022 but was inactive moving arsenic a reserve serviceman erstwhile helium met Louis, who testified helium brokered hundreds of car leases for Drive-LA.

A erstwhile LAPD officer, Eric Halem, owned a car rental concern called Drive-LA successful this concern halfway successful Van Nuys.

(Myung J. Chun/Los Angeles Times)

Louis said helium was astatine Drive-LA counting currency he’d received from Ghost erstwhile Halem asked wherever the wealth came from.

“From the crypto kids,” Louis replied.

Halem was funny however they were truthful rich. “I told him they fundamentally scam oregon bargain people’s crypto,” Louis recalled during his testimony.

Through Halem, Louis said, helium was introduced to Gabby Ben. Twice convicted of fraud, Ben, 51, has ties to Israeli organized transgression circles, a authoritative said astatine his bail proceeding successful November.

Louis brokered the merchantability of Amiri apparel and Hermes bags from Lam to Ben, who bought the luxuries connected recognition and ne'er paid him, Louis testified.

At Ben’s rented mansion successful the Hollywood Hills, Louis said, helium spitballed with Ben and Halem ideas connected however to rob crypto kids. Louis recalled Halem saying they were criminals who wouldn’t study being robbed to the police.

“It’s fundamentally similar stealing thing from idiosyncratic who stole,” Halem said, according to Louis.

It’s progressively communal for criminals to usage carnal unit to extract crypto from a victim, said Marilyne Ordekian, a lecturer of information and transgression subject astatine University College London who co-wrote a insubstantial connected the trend.

The heists are called “$5 wrench attacks” aft a comic portion successful which a robber bypasses a laptop’s encryption protections by threatening the idiosyncratic with a wrench. A perpetrator who whitethorn deficiency the method expertise to hack into a crypto wallet tin edifice to cruder methods, Ordekian said.

According to authorities, the tools Halem, Ben and Louis planned to usage included constabulary uniforms, handcuffs and a gun.

Masked men, handcuffs and a setup

The crippled came unneurotic 2 days aft Christmas successful 2024, Louis testified.

Daniel had sent Louis $23,000 successful crypto to person to cash. Louis said the program was for him to telephone Daniel down to the parking store from his 18th-floor apartment, manus implicit the wealth and stall portion the others entered the flat utilizing the doorway codification that Louis had provided.

Louis, Halem, Ben and 3 others acceptable retired from Ben’s location astir 2 a.m., driving to Koreatown successful a greenish Range River and orangish Lamborghini Urus, Louis testified. Both cars were owned by Drive-LA, Louis said.

Louis texted Daniel erstwhile helium arrived. Ben had fixed Louis $7,000 successful currency for the transaction. When Daniel got successful Louis’ Range Rover, helium testified, helium gave the teen $6,000 — pocketing $1,000. Louis said helium “dapped him up” and told him he’d spot him soon.

In Daniel’s telling, helium was counting the wealth successful Louis’ car erstwhile helium got a substance from his woman that read, “Help me.”

His woman — identified successful tribunal lone by her archetypal name, Victoria — testified she was successful the chamber unsocial erstwhile she heard the dependable of idiosyncratic entering the incorrect codification to the beforehand door. She looked done the pinhole and saw 2 men wearing hoods.

She testified that she fled to a closet and was hiding determination erstwhile she heard the dependable of the codification being entered again — this clip correctly. Through the ace nether the closet door, she said, she saw feet traipsing done the chamber and heard men whispering successful a overseas language.

The feet approached the closet door. Then it was thrown open.

“I’m greeted by 4 masked men,” Victoria testified. “One of them is holding a gun. I person my hands up. I’m saying, ‘I’ll springiness you what you want. I’ll springiness you the safe. Just delight don’t termination me.’”

The men said they were LAPD officers serving a hunt warrant.

“Exit the closet,” 1 said.

They cuffed her wrists and demanded to cognize wherever her fellow was, she testified. Then she heard the dependable of Daniel opening the beforehand door.

Daniel said helium was “absolutely terrified” to spot men wearing achromatic clothes, constabulary vests and achromatic masks that covered everything but their eyes wrong his apartment.

“There was thing moving done my caput different than fear,” helium recalled.

The men slammed him against a wall, snapped handcuffs onto his wrists and pushed him into the spare chamber helium utilized arsenic an office. The intruders told him to crook connected his machine and transportation crypto retired of his wallet. Trying to instrumentality them, helium showed them a wallet that contained lone a small money.

Daniel testified 1 of the men threatened to sprout him successful the foot, asking different intruder for a gun. Daniel told them the operation to a harmless wherever helium stored his hardware wallet, which was astir the size of a USB drive.

Daniel testified helium was being detained successful a bath with the ablution moving erstwhile 1 of the intruders burst successful and said thing successful a overseas language. The intruders fled the apartment, leaving Daniel and his woman successful cuffs.

A forgotten codification and a missing fortune

Louis testified helium was liable for cutting the robbery short. After Daniel near his car, helium circled the artifact a fewer times, past pulled over, helium said.

“I started to consciousness blameworthy astir what was going on,” Louis testified. “He didn’t bash thing to me.”

Louis had spent a fewer hours earlier that nighttime drinking astatine Poppy connected La Cienega Boulevard. He said helium felt compelled to substance his accomplices wrong Daniel’s flat that the constabulary were connected the way.

“I deliberation it was the intoxicant mixed with my feelings,” Louis said. He thought astir however Daniel, similar himself, was “just a idiosyncratic trying to marque it big.”

Later that night, Louis said, helium and his bodyguard returned to Koreatown to cheque connected Daniel — and retrieve the cuffs his accomplices had near behind.

Louis said helium recovered Daniel and his woman hiding successful a harmless country successful the apartment. She was inactive handcuffed.

“We’re going to find who did this,” Louis recalled Daniel saying.

Louis testified helium felt blameworthy astir mounting up Daniel, but helium wasn’t supra pestering Halem and Ben for a chopped of the profits. Both tried putting him disconnected by claiming they hadn’t stolen anything, Louis testified.

Halem called the full happening a “major discarded of time,” Louis said. Yet Ben went connected a “nice small buying spree” with his girlfriend, Louis testified, portion Halem bought 2 Porsche 911 GTs and a Rolex Yacht Master watch.

When Louis confronted Ben astatine his house, Louis said, an subordinate helium knew by the nickname Lucky brandished a weapon and warned “not to messiness with them.” Louis testified that Ben said helium was from the “Israeli mafia” and knew radical “everywhere.”

Ben has pleaded not blameworthy to charges of kidnapping, robbery and fraud. At a bail hearing, his lawyer said Ben owned morganatic healthcare and assisted surviving facilities.

Louis was arrested 5 months aft the robbery. In a jailhouse call, Halem told him to “hang tight” and said helium knew an FBI cause who could get him retired of jail, according to Louis.

No 1 from the FBI ever came to spot to him, Louis said, and Halem was arrested 3 months later.

Halem was convicted this period of robbery and kidnapping. He has maintained his innocence but faces a imaginable beingness sentence.

Louis was charged with robbing Daniel, and helium agreed to attest against Halem successful hopes of getting retired of situation early. He has yet to beryllium sentenced.

The LAPD ne'er determined what happened to the crypto connected Daniel’s hard drive.

Daniel testified helium mightiness person been capable to entree his wallet remotely utilizing a “seed phrase,” a unsocial drawstring of words that helium wrote down connected a portion of paper. But the men who robbed him took it from his safe, helium said, and helium can’t retrieve the phrase.

Now 18, Daniel testified helium doesn’t privation the crypto back, though helium inactive tracks the terms of bitcoin connected his phone’s location screen.

“I spot it each day,” helium said.