Crypto Scam Sentence: Shocking 12-Year Extension for Failure to Pay Restitution

The world of cryptocurrency can be exciting, but it also attracts bad actors. A recent court decision highlights the serious consequences faced by those who commit crypto crime, especially when they fail to make amends. A crypto scammer initially given a relatively short sentence saw his time behind bars increase dramatically for not paying back his victim.

Who is Nicholas Truglia and What Happened?

Nicholas Truglia was previously convicted in 2022. His initial sentence was 18 months in prison for conducting SIM-swapping attacks against crypto investors. However, a judge has now extended his sentence significantly.

Why the Shocking Increase in Sentence?

Truglia’s sentence was increased to 12 years primarily because he failed to pay over $20 million in crypto restitution to one of his victims, Michael Terpin. Terpin is a crypto investor and CEO of Transform Group.

According to a recent court order, the judge noted:

• At the original sentencing, Truglia indicated willingness to repay the victim.
• Despite this, Truglia failed to make any restitution payments.
• He actively avoided efforts by law enforcement and the court to enforce the restitution obligation.
• Evidence at the time showed he owned assets worth over $61 million, far exceeding the required restitution.
• He had signed a consent order agreeing to the restitution.

This failure to honor his commitment and court order led directly to the much longer prison term.

Understanding SIM Swapping Scams

The original crypto scam Truglia committed involved SIM swapping. This technique is a major threat to anyone using a mobile phone for account security, especially in the crypto space.

Here’s how SIM swapping generally works:

1. Criminals trick a mobile carrier into transferring a victim’s phone number to a SIM card controlled by the criminal.
2. This gives the criminal control over the victim’s phone number.
3. They can then intercept calls and, crucially, text messages, including two-factor authentication codes.
4. Using the phone number and intercepted codes, they can gain access to the victim’s online accounts, including crypto exchanges, banks, and email.
5. Once inside, they can drain funds or steal assets.

In 2018, Truglia was arrested for using these tactics against investors in California. Michael Terpin lost $24 million in crypto to Truglia’s SIM-swapping scheme.

The Victim’s Pursuit of Justice

Michael Terpin didn’t just rely on the criminal justice system. He also pursued civil action.

• In 2018, he filed a $224 million lawsuit against his carrier, AT&T, alleging negligence allowed the SIM swap to happen.
• He also filed a $75 million civil lawsuit directly against Truglia.
• In 2019, the court awarded Terpin full damages in the civil case against Truglia.

Despite the civil judgment and the criminal restitution order, Truglia failed to pay back the stolen funds, leading to his resentencing.

Preventing Crypto Scams: What You Can Do

While this case highlights the consequences for scammers, it also underscores the importance of personal security against crypto crime methods like SIM swapping.

Actionable steps to protect yourself:

• Use strong, unique passwords for all online accounts.
• Enable two-factor authentication (2FA), but prefer authenticator apps (like Google Authenticator, Authy) or hardware keys over SMS-based 2FA, as SMS can be intercepted via SIM swap.
• Talk to your mobile carrier about adding extra security measures to your account, like a PIN or password required for any changes or transfers.
• Be wary of phishing attempts that try to trick you into revealing personal information.
• Consider using a separate phone number or even a dedicated device for sensitive crypto activities if possible.

Summary

The case of Nicholas Truglia serves as a stark reminder that committing crypto crime has severe repercussions, especially when offenders fail to comply with court orders for crypto restitution. His sentence increasing from 18 months to 12 years for welshing on his debt sends a clear message. It also brings attention back to dangerous techniques like SIM swapping and the need for robust personal security measures in the crypto world. Victims like Michael Terpin demonstrate resilience in pursuing justice through both criminal and civil avenues against those who perpetrate crypto scam operations.