Karanjit Singh Khatkar, Jagroop Singh Khatkar – Bitcoin Fraud, Oregon 2019

PORTLAND, Ore.— Two Canadian nationals have been sentenced to federal prison for their roles in a Bitcoin scam that targeted an Oregon resident, according to court documents.

Karanjit Singh Khatkar, 23, and Jagroop Singh Khatkar, 24, residents of Surrey, British Columbia, Canada, were sentenced to 24 months in federal prison and three years of supervised release for conspiring to commit wire fraud and money laundering.

The scheme began in October 2017 and continued until August 2018, when the defendants used a Twitter account with the name @HitBTCAssist to trick victims into thinking they were communicating with a customer service representative from HitBTC, a Hong Kong-based online platform used to exchange virtual currency.

Using the fraudulent Twitter account, the defendants convinced the victim to send information they could use to log on and take over her email, HitBTC, and Kraken accounts. Kraken is a U.S.-based online platform that offers services similar to HitBTC.

The defendants initiated transfers of 23.2 bitcoins from the victim’s HitBTC account to Karanjit Khatkar’s Kraken account. Karanjit Khatkar then transferred approximately 11.6 of the stolen bitcoins to Jagroop Khatkar’s Kraken account.

Two days after illegally accessing the victim’s account, Karanjit Khatkar used the stolen funds to purchase a Mercedes-Benz worth $56,598 in Canadian dollars. The brothers also used the stolen funds to travel to casinos, with Karanjit Khatkar gambling with tens of thousands of dollars at high-end casinos in Las Vegas.

Karanjit Khatkar was arrested upon arrival at the McCarran International Airport in Las Vegas on July 18, 2019, and later ordered detained pending trial. Jagroop Khatkar appeared voluntarily for his arraignment and change of plea on December 16, 2019.

The Khatkars pleaded guilty to conspiring to commit wire fraud and money laundering on December 16, 2019, and were ordered to pay a total restitution of $184,511 to their victim. This includes a prepayment of $142,349 made at their change of plea hearing, as well as an additional $42,162 ordered at sentencing.

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