by Matthew Russell Lee, Patreon Book Substack
SDNY COURTHOUSE, Dec 14 – Shakeeb Ahmed was arrested at 6 am on July 11 and appeared in court at 3 pm on crypto fraud charges. Indictment on Patreon here.
Inner City Press was there, in the Magistrates Court of the U.S. District Court for the Southern District of New York, when Ahmed was brought in by U.S. Marshals, wearing shorts and a t-short emblazoned "I [two-screens] CODE." Thread here.
The SDNY prosecutors agreed to release Ahmed on bond, only $100,000 of it secured by cash, to live in his luxury apartment on 57th Street. This stands in contrast to the detention of Avi Eisenberg, and Miles Guo.
On July 14, District Judge Victor Marrero set the next conference for August 11.
Inner City Press went to the nearly empty courtroom; threadette:
Shakeeb Ahmed has 3 lawyers and is wearing a suit, not "I CODE" T-shirt he wore at arraignment.
All rise!
Judge Marrero: Tell me about discovery...
AUSA: We turned over Google subpoena returns. We seized over 20 devices, we are imaging them and Ahmed's laptop from his former employer.
Defense: We got 90 gigabytes this morning. We'd like until October.
AUSA: Oct 20.
Judge Marrero: 2 pm. Adjourned.
On October 16 Judge Marrero ruled: "ORDER as to Shakeeb Ahmed: Counsel for the Government, with the consent of counsel for Defendant, requests that the status conference currently scheduled for October 20, 2023 be adjourned. (See Dkt. No. 20.) The conference is hereby adjourned to December 1, 2023 at 12:30 p.m. (Time excluded from 10/16/2023 until 12/1/2023) (Signed by Judge Victor Marrero on 10/16/2023) "
The prosecutors summarize: "In July 2022, AHMED carried out an attack on the Crypto Exchange by exploiting a vulnerability in one of the Crypto Exchange’s smart contracts and inserting fake pricing data to fraudulently cause that smart contract to generate approximately $9 million dollars’ worth of inflated fees... The Crypto Exchange was incorporated overseas and operates on the Solana blockchain... AHMED laundered the millions in fees that he stole from the Crypto Exchange to conceal their source and ownership, including through (i) conducting token-swap transactions, (ii) “bridging” fraud proceeds from the Solana blockchain over to the Ethereum blockchain, (iii) exchanging fraud proceeds into Monero."
On December 14, Shakeeb Ahmed pled guilty in SDNY Magistrates Court. Inner City Press was the only media there; thread:
Judge: How old are you? Shakeeb Ahmed: 34. I have a B.S. from the University of Illinois. Judge: Do you understand you are changing your plea to guilty? Ahmed: Yes.
Judge: How do you plead?
Shakeeb Ahmed: Guilty. Judge: The maximum penalty is five years, fine of $250,000 or twice the gain or loss, plus any restitution. Judge: Let's turn to the plea agreement. [Let's]
Judge: It says 70 to 87 months but 60 months is the maximum, so that's the guideline. Do you understand? Shakeeb Ahmed: Yes.
Judge: Before I ask you what you did, I'll ask US to summarize the elements and proof. AUSA: Accessed without authorization, intent to defraud. He hacked a decentralized crypto exchange. On July 2-3, 2022 Ahmed attacked the exchange by exploiting a smart contract
AUSA: He exploited it for $9 million. We have blockchain records linking it to him, and his search history. Ahmed was in Manhattan when he did it. He admits a 2d a different attack - on Nirvana Finance, ANA. On July 28, 2022 he took out a loan for $10 million
AUSA: He made $3.6 million. He repaid the loan. Nirvana offered him $600,000 to return the funds. He wanted $1.4 million. There was no agreement so he laundered the funds through crypto mixer Samurai
Judge: Mr. Ahmed, tell me what you did. Shakeeb Ahmed: I exploited a weakness and inserted fake pricing information. I returned $7.5 million but kept $1.5 million, I told the exchange about their vulnerabilities.
Judge: You were in Manhattan? Ahmed: Yes.
Judge: I will recommend acceptance of the guilty plea. Has Judge Marrero set a sentencing date?
AUSA: There is not. We ask for a control date of 90 days out. Judge: March 13. Defense: He is not allowed to open a new bank account. He needs one to pay forfeiture
Defense: Mr. Ahmed opened a Bank of America account on December 5. Judge: So it's already in progress. I'll modify the order. We are adjourned.
Plea agreement on Patreon here.
The case is US v. Ahmed, 23-cr-340 (Marrero / Wang)
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