District Attorney Alvin Bragg recently made a significant announcement regarding criminal charges against Michael Lauchlan, who is accused of participating in a fraudulent crypto asset recovery business in New York. Lauchlan, also known as Max Handler, allegedly operated under the guise of Coin Dispute Network (CDN) and deceived customers by falsely claiming to help them recover lost crypto assets.
By posing as the vice president and chief recovery officer of CDN, Lauchlan reportedly tricked clients into paying in Ethereum to consult with a supposed “recovery analyst.” He then allegedly misled customers by claiming to know the whereabouts of their lost cryptocurrency and offering to retrieve it for an additional fee. However, instead of delivering the promised services, he allegedly pocketed the fees and Ethereum, leaving customers empty-handed.
District Attorney Bragg described the scheme as a modern twist on a timeless crime, emphasizing how Lauchlan manipulated customers with false assurances and ultimately defrauded numerous individuals, including at least three New Yorkers. The charges against Lauchlan include three counts of grand larceny and two counts of scheme to defraud.
Between July 2022 and June 2023, CDN purportedly promoted services such as blockchain analysis, tracing, and recovery of lost crypto assets. However, these services were allegedly deceptive, and Lauchlan reportedly capitalized on customers’ limited knowledge of the cryptocurrency industry to unlawfully obtain their funds.
In a significant move against the crypto recovery scam, the Manhattan DA’s office seized the CDN website in June 2023. Subsequently, authorities apprehended Lauchlan in Las Vegas on July 9, 2024. As part of their investigation, the DA’s office has identified approximately $14,000 in user funds transferred to CoinEx by CDN and has engaged with over 175 impacted individuals.
This case serves as a stark reminder of the risks associated with the cryptocurrency industry and the importance of conducting thorough research and due diligence before engaging with any crypto-related services or businesses. It also underscores the commitment of law enforcement agencies to combat fraudulent activities and protect consumers from falling victim to scams in the evolving digital landscape.