Yahya 
An investigation by the United States Homeland Security Investigations (HSI) task force into a fake crypto recovery operation has resulted in charges against Michael Lauchlan from Las Vegas.
Charges Against Lauchlan
On August 5, the Department of Homeland Security announced that the New York task force had charged Lauchlan with running a fake crypto asset recovery business called Coin Dispute Network (CDN). CDN claimed to offer services such as blockchain analysis, tracking, and recovering lost cryptocurrencies. However, it is alleged that Lauchlan withheld fees instead of recovering the assets and, in some cases, obtained additional Ether from customers using false promises and fabricated blockchain tracking reports.
Investigation Findings
The HSI team interviewed over 175 individuals who were CDN customers, and none reported recovering any cryptocurrency using this service. Additionally, the team traced approximately $14,000 worth of cryptocurrencies belonging to CDN users to the CoinEx crypto exchange. This case marked the first dismantling of a crypto recovery site by the Manhattan District Attorney’s Office.
Lauchlan, residing in Las Vegas, was charged in the Manhattan Criminal Court with grand larceny and two counts of a fraudulent scheme. HSI New York special agent Ivan J. Arvelo commented, “Michael Lauchlan exploited his customers’ lack of experience in the cryptocurrency industry by defrauding them with fake services and stolen assets.”
Legal and Public Response
Following a year-long investigation, the CDN website was seized by law enforcement in July 2023, and Lauchlan, operating under the alias Max Handler, was arrested on July 9. The fraud is reported to have been ongoing for at least two years, with victims questioning the legitimacy of CDN on Reddit.
In November 2022, the U.S. Federal Trade Commission issued a warning about crypto recovery services due to increasing scams following the FTX collapse. Ironically, in March 2023, CDN launched a database allowing users to report online scams.
This case serves as a cautionary tale, emphasizing the importance of verifying the legitimacy of services for those seeking to recover lost cryptocurrencies.
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