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Luke Hughes

Crypto miner arrested for skipping on millions in cloud server bills

Crypto mining.

A 45-year-old Nebraska man Charles O. Parks III has been charged with numerous financial crimes, including wire fraud and money laundering, as part of a scheme defrauding two cloud storage providers based in Seattle and Redmond, Washington.

Ars Technica, reporting on the indictment, beat us to the punch in alleging that the cloud providers in question are probably Amazon Web Services and Microsoft Azure. 

Parks registered a number of accounts using various identities to secure the computing resources, and continued registering accounts even after being kicked off of the Seattle provider for non-payment and suspicions of fraudulent activity.

Don’t try this at home

Though Parks is estimated to have cost both providers a combined $3.5 million in unpaid service fees and the sheer amount of energy consumed by his operation, the whole charade only netted around $1 million. That’s probably not worth the 30 year custodial sentence facing Parks if he’s convicted on all charges.

Parks was methodical, laundering his ill-gotten Ether, Litecoin and Monero via crypto exchanges, unnamed NFT marketplaces and online payment gateways, as well as plain old bank accounts. 

He was cunning, managing to socially engineer, trick and fraud his way to persuading employees at the provider to defer demands for payment and elevate his service allowances.

However, Parks was also reckless in not paying his bills in the first place, as well as splashing the cash about a little too much, buying a car, jewelry, ‘first-class hotel and travel accommodations’, and ‘other luxury goods and services’. 

The decision was perhaps particularly unwise, as we’ve already highlighted that the return on investment with cryptocurrency mining isn’t great, in part because companies are wise to it now. They can throttle their resources (which is almost certainly why Parks had to do some social engineering fraud) and have the telemetry (as they almost certainly did on Parks) to look at what their systems were doing and put two and two together.

Plus, caring about the environment might be for squares or whatever when there’s money to be made, but the environmental impact of data centers generally is bleak and depressing, even when you’re not using them to mine monopoly money. What better reflection is there of capitalism in action than a race to the bottom, ultimately set to doom us all, for a meager return on investment?

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