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DA says he shut down 21 sites stealing millions through crypto scams
NEW YORK | Authorities in New York City said Thursday they disrupted an online fraud operation that stole millions of dollars by duping victims into making phony cryptocurrency investments.
Brooklyn District Attorney Eric Gonzalez said his office seized 21 web domains that were being used by scammers in so-called “pig butchering” schemes, a term that refers to gaining victims’ trust through dating apps or other sites and steering them toward bogus investments.
“Pig butchering is a growing type of scam that defrauds residents of Brooklyn and the entire country out of billions of dollars every year,” Gonzalez said in a statement. “My office’s strategy is to disrupt these schemes by seizing and shutting down their online infrastructure, and to educate the public.”
He urged people not to trust crypto investments that seem too good to be true and warned against downloading apps from unverified crypto websites.
The New York Police Department received 50 complaints about online crypto scams last year, but that is likely a tremendous undercount because people are ashamed of being fooled or don’t know how to report the crime, Gonzalez said.
The victims who have come forward reported losing more than $4 million in Brooklyn alone, Gonzalez said, calling the reports “heartbreaking.”
“There are people who are losing huge sums of money,” he said during a news conference. “Sometimes they’re losing their entire life savings. Sometimes they’re mortgaging their homes.”
One victim, a 51-year-old woman, reported to police last year that she lost $22,680 after she was added to online chat groups discussing crypto investments.
The woman made eight deposits and saw statements showing her account grew to $387,495. But, when she tried to withdraw her initial investment, she was told she had to pay taxes. She complained, and she was blocked from the chat group. Her money was gone, Gonzalez said.
Investigators learned that the woman’s money was moved through multiple cryptocurrency addresses, deposited into an account at a foreign crypto exchange and cashed out by an individual in a region beyond U.S. jurisdiction, possibly China. The investigation found additional victims of the same scheme from California, Pennsylvania, and Illinois who had lost a total of $366,665, Gonzalez said.
Another woman who spoke anonymously in a video shared by the district attorney’s office said a scammer first reached her through a dating app.
“His flirting made me feel secure and trusting,” said the woman, who was trying to buy her former husband out of their house.
Though she said she hesitated when the scammer first told her to invest in crypto, she ultimately lost $118,000 after tapping a personal loan and her pension.
“I feel like an idiot,” she said.
British billionaire Joe Lewis gets no prison time at sentencing
NEW YORK | British billionaire Joe Lewis, whose family trust owns the Tottenham Hotspur soccer club, will not spend any time in prison after pleading guilty to insider trading and conspiracy charges in New York, a federal judge said Thursday.
Judge G.L. Clarke cited Lewis’ decision to promptly come to the United States to face charges and his failing health, along with a lifetime of good works, in ruling that Lewis will face three years on probation and a $5 million fine rather than time behind bars.
Lewis, 87, was wearing an eye patch and one of his hands shook steadily throughout the one-hour proceeding in a federal court in Manhattan. He has remained in the United States since last July.
Before he was sentenced, Lewis spoke briefly, saying he learned growing up in England during World War II how “precious” life is and decided to devote much of his life to finding a cure for “horrendous diseases.”
“Your honor, I’m here today because I made a terrible mistake. I’m ashamed,” he said.
Lewis said he hoped “to make amends and to rebuild the trust that I have squandered” for the remainder of his life.
U.S. sentencing guidelines had called for Lewis, a citizen of the United Kingdom and resident of the Bahamas, to serve 18 months to two years behind bars. Even prosecutors, though, agreed time behind bars was not necessary.
At his January plea, Lewis admitted that he agreed in 2019 to share secrets about publicly traded companies with several individuals. Prosecutors said afterward that his company, Broad Bay Limited, and Lewis would pay $50 million in financial penalties, the largest such penalty for insider trading in a decade.
His lawyer said Thursday that the money was in escrow and ready to be paid and plans were for him to leave the United States for the Bahamas on Thursday night.
Prosecutors wrote in their presentence submission that Lewis deserved leniency because he is older and “battles significant health issues” that would cause a term of imprisonment to be more difficult for him than others.
They cited his acceptance of responsibility that he demonstrated by voluntarily surrendering rather than forcing a drawn-out extradition battle, and said that he’d “otherwise lived a law-abiding life.”
The government also noted that Lewis is recognized as one of the 500 richest people in the world with approximately $6.2 billion as of February, including homes in several countries; a $250 million yacht; private planes valued at $90 million and an art collection worth $100 million.
When she announced the sentence, the judge said: “It is clear to me that Mr. Lewis’s life would be at serious risk if he were to be incarcerated.”
Defense attorneys said in their presentence submission that Lewis “is nearing the end of life in declining health.”
They said Lewis was aware that his conviction meant he can’t return to the United States to see his children, grandchildren or great-grandchildren, who all live in the U.S.
From the start, Lewis was no ordinary defendant. After his arrest less than a year ago, he had been free on $300 million bail after putting up a yacht and private plane as collateral.
In court papers, prosecutors said Lewis learned secrets about public companies after making large investments. They said that on at least four occasions, he tipped off his girlfriend, personal pilots, employees and friends, enabling them to profit from the secrets.
“This insider trading was not the result of aberrant, one-time conduct, but rather, a troubling pattern of misconduct over the course of several years,” they wrote.
Prosecutors said the insider activity might have resulted from “hubris, ego, a desire to make a financial gift without parting with his own money, an irrational form of greed, or some other reason.”
But, regardless, “it is clear that Lewis believed he was above the law — that he had achieved a level of wealth and stature that relieved him from having to operate by the same rules that apply to everyday investors,” prosecutors said.
As he left the courthouse, Lewis was surrounded by aides who blocked members of the media from seeing him as he walked a short distance to a waiting vehicle.
Average long-term U.S. mortgage rate rises modestly
LOS ANGELES | The average long-term U.S. mortgage rate rose modestly this week, holding below 7% as it has for much of this year.
The average rate on a 30-year mortgage rose to 6.82% from 6.79% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.28%.
When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already out of reach for many Americans.
Rates have been drifting higher and lower in recent weeks, often from one week to the next. The average rate for the benchmark 30-year mortgage is now just below where it was two weeks ago.
After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has remained below 7% since early December, though it also hasn’t gone below the 6.6% it averaged in January.
In late February, it got up as high as 6.94% after stronger-than-expected reports on inflation, the job market and the economy clouded the outlook for when the Federal Reserve may begin lowering its short-term interest rate.
Many economists expect that mortgage rates will ease moderately this year, but that’s not likely to happen before the Fed begins cutting its benchmark interest rate. Last month, the central bank signaled again that it expects to make three rate cuts this year, but not before it sees more evidence that inflation is slowing from its current level just above 3%.
How the bond market reacts to the Fed’s interest rate policy, as well as other factors can influence mortgage rates. Current indications are mortgage rates will remain higher for a while longer.
“While incoming economic signals indicate lower rates of inflation, we do not expect rates will decrease meaningfully in the near-term,” said Sam Khater, Freddie Mac’s chief economist.
The U.S. housing market is coming off a deep, 2-year sales slump triggered by a sharp rise in mortgage rates and a dearth of homes on the market. The overall pullback in mortgage rates since their peak last fall has helped provide more financial breathing room for homebuyers.
Sales of previously occupied U.S. homes rose in February from the previous month to the strongest pace in a year. That followed a month-to-month home sales increase in January.
Still, the average rate on a 30-year mortgage remains well above where it was just two years ago at 4.72%. That large gap between rates now and then has helped limit the number of previously occupied homes on the market because many homeowners who bought or refinanced more than two years ago are reluctant to sell and give up their fixed-rate mortgages below 3% or 4%.
Even so, the pace of new homes hitting the market in the leadup to the spring homebuying season has been stronger than last year.
Active listings — a tally that encompasses all the homes on the market but excludes those pending a finalized sale — jumped nearly 24% in March from a year earlier, according to Realtor.com. That marks the fifth consecutive month of annual inventory growth.
Home shoppers last month still had far fewer options than they did before the pandemic. In March 2019, active listings were nearly 38% higher.
Meanwhile, homeowners looking to refinance their home loan got a break this week. Borrowing costs on 15-year fixed-rate mortgages fell, pulling the average rate to 6.06% from 6.11% last week. A year ago it averaged 5.64%, Freddie Mac said.
U.S. applications for jobless benefits rise to highest level in two months
The number of Americans applying for jobless benefits rose to their highest level in two months last week, but layoffs remain at historically low levels as the labor market continues to chug along despite elevated interest rates.
The Labor Department reported Thursday that filings for unemployment claims for the week ending March 30 climbed by 9,000 to 221,000 from the previous week’s 212,000.
The four-week average of claims, which evens out some of the weekly volatility, rose modestly to 214,250, an increase of 2,750 from the previous week.
In total, 1.79 million Americans were collecting jobless benefits during the week that ended March 23, a decline of 19,000 from the previous week.
Weekly unemployment claims are considered a proxy for the number of U.S. layoffs in a given week and a sign of where the job market is headed. They have remained at historically low levels since the pandemic purge of millions of jobs in the spring of 2020.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in an effort to bring down the four-decade high inflation that took hold after the economy roared back from the COVID-19 recession of 2020. Part of the Fed’s goal was to loosen the labor market and cool wage growth, which it believes contributed to persistently high inflation.
Many economists thought the rapid rate hikes could potentially tip the country into recession, but jobs have remained plentiful and the economy has held up better than expected thanks to strong consumer spending.
In February, U.S. employers added a surprising 275,000 jobs, again showcasing the U.S. economy’s resilience in the face of high interest rates.
At the same time, the unemployment rate ticked up two-tenths of a point in February to 3.9%. Though that was the highest rate in two years, it is still low by historic standards. And it marked the 25th straight month in which joblessness has remained below 4% — the longest such streak since the 1960s.
The March jobs report comes out on Friday.
Though layoffs remain at low levels, there has been an uptick in job cuts recently, mostly across technology and media. Google parent company Alphabet, eBay, TikTok, Snap, Amazon, Cisco Systems and the Los Angeles Times have all recently announced layoffs.
Outside of tech and media, UPS, Macy’s and Levi Strauss also have recently cut jobs.
—From AP reports
