Marcos Ponce, a 37-year-old Austin resident, was sentenced in federal court on May 11, 2022, to five years in prison for conspiring to commit wire fraud. The court also ordered him to pay $1.4 million in restitution and serve three years of supervised release after prison. Ponce had pleaded guilty in October 2021.
How the PayPal credential scheme worked
From at least November 2015 through about November 2018, Ponce and co-conspirators set up buyer accounts on an illegal online marketplace selling stolen payment-account credentials and personal information. They purchased more than 38,000 stolen PayPal login credentials, according to the U.S. Department of Justice.
A court-record account reported that an account linked to Ponce bought 38,153 credentials in 757 transactions between November 1, 2015, and September 26, 2016. The records described information that could include usernames, passwords, names, email addresses, balances, linked credit-card numbers, and linked bank-account numbers, according to the Fort Worth Star-Telegram.
What social engineering did
The conspirators used social-engineering techniques to trick unwitting third parties into accepting money transfers from compromised PayPal accounts and forwarding the funds to accounts controlled by conspiracy members, according to the U.S. Attorney’s Office for the Western District of Texas. In practical terms, social engineering means manipulating people into taking an action—here, moving money—rather than relying only on direct technical access to an account.
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Ponce’s sentence and restitution
The federal sentence consisted of five years in prison, followed by three years of supervised release. Restitution was set at $1.4 million. That restitution figure is the amount the court ordered Ponce to pay; the cited announcement does not establish it as a complete accounting of all money stolen or losses caused by the scheme.
Ponce pleaded guilty to conspiracy to commit wire fraud. Assistant Attorney General Kenneth A. Polite Jr. said the sentence should signal that online crimes have real-world consequences. U.S. Attorney Ashley C. Hoff said the prosecution demonstrated that the cyberworld is not a haven for criminals.
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Who investigated and prosecuted the case?
The FBI Washington Field Office investigated, with significant assistance from the FBI San Antonio-Austin Cyber Task Force. Senior Counsel Laura-Kate Bernstein of the Justice Department’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Matthew Devlin for the Western District of Texas prosecuted the case, with assistance from Assistant U.S. Attorney Demian Ahn for the District of Columbia, according to the Justice Department announcement.
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