An 18-year-old suburban New York high school senior is being sued for allegedly being the mastermind and ringleader of a cybercrime scheme...
An 18-year-old suburban New York high school senior is being sued for allegedly being the mastermind and ringleader of a cybercrime scheme that defrauded a cryptocurrency investor out of millions of dollars in digital currencies.
Michael Terpin, a pioneer in the world of cryptocurrency, is accusing Ellis Pinsky, of Irvington, New York, and 20 of his alleged co-conspirators of stealing $23.8 million of cryptocurrency in January 2018.
Pinsky was just 15 and in 10th grade at the time of the alleged crime. Terpin is seeking triple the amount lost in damages, to the tune of $71.4 million.
'On the surface, Pinsky is an "All American Boy," Terpin said in a complaint filed in federal court in White Plains, New York, but claims in reality he is 'an evil computer genius. The tables are now turned.'
In his complaint, Terpin said Pinsky from Westchester county and his 'gang of digital bandits' would steal from victims after gaining control of their smartphones through 'SIM swaps,' and that Pinsky bragged to friends that he would never get caught.
Michael Terpin, an American cryptocurrency investor, is now suing the New York teenager who is a senior in high school
He is alleged to have written to an acquaintance, 'I could buy you and all your family. I have 100 million dollars.' The complaint also alleges that an accomplice saw, in December 2017, 'records indicating that Ellis had $70 million.'
The case against Pinsky alleges he was able to hack Terpin's BlackBerry phone and access his 'digital vault' which stored the $23.8 million.
Terpin then alleges that within forty-eight hours, Pinsky had managed to launder the virtual cash.
'In his early teens, Pinsky began hacking computers with the mission of accessing his victims' private accounts where they store their cryptocurrency holdings or private information,' the complaint reads.
According to the New York Post friends believed Pinsky to have made his money though more pedestrian means.
'His best friend thought he was making money through trading Bitcoin and stock,' an insider said.
Pinsky is alleged to have used a portion of the money to maintain a lavish lifestyle, all while living at home with his parents who are believed to thought he made his Bitcoin money winning on video games.
He is alleged to have had an account with JetSmarter, a private jet sharing company and said to drive an Audi R8 worth around $170,000 while wearing pricey Louis Vuitton streetwear. Yet he was also said to be stingy with his cash.
'He had a designer wallet packed with $100 bills but he never liked to pay for anything,' the insider claimed to the Post. 'He was an extreme miser. He anticipated retiring from crime after the Terpin heist.'
'Whether [Pinsky's] parents were recklessly negligent or worse in failing to monitor and control their wayward son remains to be seen,' the complaint read.
The insider described Pinsky as a teenager who had superb organization skills but someone who was also a bully.
'He would tell everyone what to do [during heists]. He bragged about [the Terpin robbery] being his job. He's a very smart guy and a control freak. If you pissed him off, he would start texting you from weird numbers and threaten you. He'd call your parents and say weird things.'
Terpin is accusing Pinsky and his alleged co-conspirators, none identified by name in the complaint, of violating federal laws against racketeering and computer fraud.
The New York charges relate to the $23.8 million theft, but in May 2019 Terpin won a $75.8 million civil judgment in a related case in a California state court against Nicholas Truglia, an alleged Pinsky associate who has faced criminal hacking charges in California and New York.
Terpin won a won a $75.8 million civil judgment in a related case in a California state court against Nicholas Truglia, pictured, an alleged Pinsky associate
Truglia has faced criminal hacking charges in California and New York
Truglia is alleged to have collaborated with Pinsky and would 'obtain [a victim's] cellphone and passcode numbers, conning the mobile-phone carrier into giving him or another imposter a new SIM card and then handing the scam off to [Ellis] to execute the hack,' the complaint as seen by the Post reveals.
SIM swapping occurs when a hacker tricks a mobile phone carrier into transferring a target's phone number from a registered SIM card, the small plastic chip connecting a phone to a cellular network, to a SIM card he or she possesses.
This can be done with help from someone at the carrier, or by stating information about the target obtained from social media and other accounts.
'Once you are in somebody's phone, stealing valuable names, taking their Bitcoin seems obvious. Plus, stealing crypto is impersonal. For kids who spend their whole lives staring at screens and playing games, it feels natural', an insider told the Post.
'Your phone goes dead and theirs is alive. Then they own you.'
Things appeared to have taken a downward turn for Pinsky as an investigation into the missing crypto currency took hold.
Pinsky is alleged to have had an account with JetSmarter, a private jet sharing company and said to drive an Audi R8 (file image) worth around $170,000 while wearing pricey Louis Vuitton streetwear... yet he was also said to be stingy with his cash
Terpin's lawyer contacted Pinsky's mother and although her son did not admit to anything, soon after the complaint was filed he is alleged to have sent him $2million including cryptocurrency, cash and also a Patek Philippe Nautilus watch worth more than $100,000.
'Pinsky . . . sent cryptocurrency, cash and a watch to [Terpin] without any condition . . . There was no other reason to repatriate these items — worth nearly $2 million at the time — other than to make a partial repayment of what he had stolen from Terpin,' the complaint details.
Although no criminal charges have been filed Terpin told The Post that he had deliberately waited until after Pinsky turned 18 in order to file suit against him as an adult.
'It will be easier to sue him [than it would be if he was a minor] and we're intending to get treble damages. These are crypto gangsters. My nickname . . . for Pinsky is Baby Al Capone.'
Terpin not only seeks to regain his stolen money but seeks punitive and exemplary damages 'to make a public example of Pinsky and his co-conspirators.'
Noam Biale, Pinsky's attorney, told The Post: 'Ellis was a child at the time of the alleged conduct . . . It is deeply unfortunate that Mr. Terpin has chosen to bring [a] lawsuit, full of smears and baseless allegations, for no imaginable purpose other than spite.'
Cryptocurrency crime is a growing problem, with losses soaring to $4.52 billion last year from $1.74 billion in 2018, according to cybersecurity company CipherTrace.
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