‘It was instantaneous’: Chasing the crypto criminals

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Very few people have heard of Detective Sergeant Dion Achtypis, but there may well be no more important investigator in Australia.

You won’t see him holding a press conference at a murder scene and he doesn’t command a squad of detectives. He doesn’t use a sledgehammer during raids, for he gains access in a much more subtle way. He is part of a three-person team working in the present while exploring the future.

Cyber-cops Detective Sergeant Dion Achtypis and Detective Superintendent Jane Welsh. They tip-toe on the Crypto.Credit: Scott McNaughton

What Achtypis and his team have discovered in the last 12 months has changed the very nature of investigations in Victoria and will become the template for how serious crimes are tackled.

We are talking about so-called new technology – which is anything but, as online crime is now the main game. One senior officer observed: “Organised crime bosses must laugh when they see headlines that we have seized a couple of motorbikes and a few million in cash when they are moving hundreds of millions around the world.”

Let’s look at a notorious “traditional” crime. On June 22, 1994, five men set up fake roadworks at the Richmond freeway entrance, stopped an Armaguard van that had just left the Reserve Bank and stole $2.3 million.

The gang trained for months, set up warehouses to store gear, carried out dry runs, recruited insiders and used a corrupt solicitor to launder the funds. Only one of the gang, Percy “No Mercy” Lanciana, was convicted after he was linked to money from the job being exchanged at three banks – undone not by the crime but the cash.

Less than 30 years later, in 2022, there was an equally well-planned theft from a Victoria-based cryptocurrency exchange that didn’t dominate the headlines. “It was instantaneous,” says Achtypis. Without entering a building, pointing a gun or driving a getaway car, the crooks escaped with $135 million. None of the money has been recovered.

“Over several months there has been a spiderweb of thousands of transactions to international exchanges – everywhere except Australia,” Achtypis says.

Usually police respond to a crisis: if street gang crime is on the rise, form a special unit; if there is a spike in the road toll, send more cars onto the road.

But the Cryptocurrency Operations Team was formed more than 12 months ago on guesswork. There were no reliable figures on the extent of the crimes and no comparable unit in Australia to act as a model.

The times are changing. TV Homicide actors Jack Fegan, Leonard Teale and Terry McDermott in black and white.Credit: Crawford Productions

Police work under the Crimes Act that came into operation in 1958 – two years after black-and-white television was introduced in Australia and when Qantas still flew propeller-driven planes to London.

Crime was local, crooks stayed in their own patch and cops rarely travelled. Police had a method of gathering evidence and catching offenders. Sure, there have been developments such as DNA and CCTV, but the actual system hasn’t changed (other than detectives no longer wear pork pie hats).

How do you investigate a crime when the offender is in an office in Moscow and the victim is sitting on their couch in Footscray?

And how do you seize the assets of crime when there is no cash and the profits moved offshore with the touch of a button?

Achtypis says the investigator has to throw away the old rule book not once but again and again.

“It is not about just re-honing the same old tools, but going to the drawing board and designing entirely new ones, with the very real understanding that many of these will likely be useful for only a short time before they themselves are rendered obsolete,” he says.

It is the ultimate in cyber-chess. The crooks are constantly looking for a weakness to exploit while the cops are searching for a weakness in the criminal organisations’ defences.

This means just about every police breakthrough will be redundant. Like the flu vaccine, what works this year will be obsolete the next.

Not that long ago crooks laundered money at racecourses, bought into businesses, set up companies run by their stooges or buried cash. Deceased drug dealer Dennis Allen was rumoured to have left a fortune underground.

The Cryptocurrency Operations Team discovered a local money laundering operation that turned over nearly $500 million in six months.

Achtypis says the money from South-East Asia (original source unknown) was used to buy real estate in Australia and around the world. “They bought every flavour available – land, commercial properties and residential at both ends of the market.

“This means home buyers are indirectly competing against criminals at auctions.”

Crooks have embraced cyber laundering because, he says, “it is more secure than having a pile of cash, you don’t have to trust a middle man, and you can transfer money anywhere in the world without using a bank”.

How did Achtypis end up an international cyber cop? After graduating from Monash University in sociology and psychology, he felt he lacked life experience and decided to join the police for a couple of years to gain it. Twenty-seven years later, he is still there.

A point of indulgence here. (In this column? Surely not.) Dion says after reading crime books such as the critically acclaimed (again, surely not) Underbelly series co-authored by this reporter, he decided to become a crook catcher.

A self-confessed computer nerd, he joined the e-crime squad in 2012. The following year, a suburban detective with misgivings about returning information to a suspect from a seized computer called the squad. Achtypis said an examination showed drug trafficking through the dark web and 24,500 bitcoin then valued at $3.4 million. “At its peak, it was valued at $2.4 billion.”

From a standing start, the Cryptocurrency Operations Team of three discovered a local money-laundering operation, assisted in 44 virtual currency seizures totalling $13 million, uncovered serious corruption and assisted in more than 200 major crime investigations. Pound for pound, they must be the most effective investigators in the country. Not bad for a unit that could hold its Christmas party in a phone booth (or perhaps a small internet cafe).

Dion loves his job and increasingly so do his colleagues, with veteran detectives embracing the new ways. “They have taken to it like ducks to water. It is a shiny new investigative tool.”

One of more than 100 arrests from the Australian Federal Police Operation Ironside.

These six facts, he says, speak for themselves:

• Australia has the second-highest concentration of dark net drug traffickers in the world, just behind the Netherlands.
• A staggering $50 billion of bitcoin changed hands in the past 24 hours.
• The World Economic Forum lists cyberattack and data theft in its top 10 risks, between extreme weather events and armed conflict.
• Sixty per cent of human communication is data-based.
• Fake identity technology that a few years ago was only used by high-end hackers is now available through off-the-shelf apps.
• Data-based businesses have replaced oil as the most valuable industry in the world.

The twist is that new-world policing can turn the computer weapons used by crooks against them. They may have dug a moat, but there is always a bridge.

You say no one was home when the house burnt down? Then how is it the smart fridge was opened 30 minutes before the fire? You say you were at home asleep at the time of the assault? Then how is it your pulse rate on your smartwatch was 170 bpm?

Operation Ironside is the perfect example of the new rules. Using a former syndicate insider, the Australian Federal Police and FBI built the phone app An0m, sold as a rock-solid encrypted phone system for crooks.

It grew to 12,000 phones connecting 300 criminals around the world. But there was a back door and 27 million messages sent over three years were automatically downloaded to a police-friendly server.

The crooks who years ago were assured their dark web money movements were untraceable should be looking over their shoulders. Cryptocurrency movements, Achtypis says, leave a trail. You only need to find the tools to follow the money.

Like DNA, as the science develops, there are more positive results and more convictions.

There is more than one way to hide a treasure chest of ill-gotten gains.Credit: Istock

The Cryptocurrency Operations Team has developed a cold-case capacity to look back at cryptocurrency movements, which means an offender who thought he had successfully tip-toed with the crypto worth millions some time ago has recently been arrested. There will be more.

Achtypis says while the technology has changed, the motive is the same — make money illegally and hide it. They are modern-day pirates who use the dark web rather than shovels to bury their treasure.

Take the Nigerian scam, where thousands of emails are sent by someone who says they have millions locked away unfairly and with just a little financial help, the fortune is there to be shared.

Before it was the Nigerian Scam (or 419 Fraud, as it is also known), it was called the Spanish Prisoner. It was a letter with a Barcelona postmark from a jail inmate with two cheques valued at £75,000 pleading that if the recipient helped retrieve the money, they would be rewarded with £25,000.

That sting started in 1807.

“We started with gold, then notes and coins and now cryptocurrency. There was snail mail, then faxes and now social media,” says Achtypis.

“It is the same old scams really. Nothing has changed.”

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