United States authorities have charged a Pennsylvania man with conspiracy to commit wire fraud and extortion via a series of SIM swaps targeting cryptocurrency execs and investors.

SIM-swapping — alternatively known as a port-out scam — involves the theft of a cell phone number in order to hijack online financial and social media accounts, enabled by the fact that many firms use automated messages or phone calls to handle customer authentication.

As per a Dec. 11 news release from the U.S. Department of Justice, Anthony Francis Faulk, 23, allegedly used “fraud, deception, and social engineering techniques” to persuade telecoms employees to transfer numbers from SIM cards belonging to his targets.

The charges were filed by U.S. Attorney David L. Anderson and FBI Special Agent in Charge John Bennett and were submitted to the U.S. District Court in Northern California.

Charges carry a maximum sentence of 20 years

Faulk and his co-conspirators, none of whom are identified, are alleged to have perpetrated their scheme between Oct. 2016 and May 2018.

While the court documents do not disclose the amount of allegedly stolen cryptocurrency, the indictment claims that Faulk used the proceeds to purchase a house, a Ferrari and three other cars, jewelry, a Rolex watch, and royalty rights to twenty songs.

The ill-gotten property will be subject to criminal forfeiture if Faulk is convicted. Following his arrest, Faulk appeared before a court in the Western District of Pennsylvania on Dec. 11.

He has been charged with one count of conspiracy to commit wire fraud and one count of interstate communications with intent to extort.

The former charge carries a maximum statutory sentence of 20 years in prison and a $250,000 fine, the latter a maximum statutory sentence of 2 years and likewise, a $250,000 fine.

Faulk has temporarily been released on a $250,000 bond and is due to appear in court on Jan. 9, 2020.

A persistent threat

SIM-swapping has become an increasing concern for law enforcement and has accordingly brought telecoms firms — gatekeepers of user identity data — under the spotlight for their alleged complicity in the crime.

Michael Terpin — a blockchain and crypto investor who filed a SIM-swapping-related lawsuit against telecoms provider AT&T — told Cointelegraph that the biggest risk to crypto investors “is that major phone companies promise you security and don't deliver it.”