Statement by DFS Superintendent Harris on Million Dollar Embezzlement and Crypto Currency Money Laundering Case
July 14, 2023
District Attorney Hoovler Announces Million Dollar Embezzlement and Crypto Currency Money Laundering Case
Former Montgomery man extradited back to New York from Colorado to face allegations that he embezzled $1.6 Million Dollars in a digital currency investment fraud scheme.
Defendant also charged with Money Laundering for concealing the source of the
stolen funds through digital currency transactions.
Orange County District Attorney David M. Hoovler announced that on Thursday, July 13, 2023, Martin Soudani, age 37, formerly of Montgomery, was arraigned in Orange County Court on an indictment charging him with the crimes including Grand Larceny in the First Degree and Money Laundering in the First Degree. The indictment charges that between December 19, 2017, and August 15, 2022, the defendant embezzled $1,620,506.50 from a relative with whom he resided during the commission of the crime.
It is alleged that Soudani lured the relative into permitting him to withdraw the funds from the victim’s trust account so that the defendant could invest them, on the victim’s behalf, on a digital currency exchange. The defendant touted a 10% return on investment to entice the relative into giving him access to the trust fund account and to make transfers to a digital currency exchange. It is alleged that instead of funding the account on his relative’s behalf, Soudani systematically transferred funds to digital currency accounts, called “wallets”, established on various exchanges, which he solely controlled. The Money Laundering charge stems from allegations that Soudani concealed and disguised the stolen funds through hundreds of transfers of digital currency between his own accounts ultimately making transfers to “cold wallets”, making tracing of the funds more difficult if not impossible. It is alleged that to conceal the thefts from the victim, Soudani created a fake website, and fraudulent monthly statements, which purported to show the victim that his “investment” was with a legitimate exchange and that his funds were secure and increasing in value. Investigation revealed that shortly after the victim became suspicious of the “investments” and was planning to change passwords and control of his account and have someone other than the defendant handle the investment, the defendant fled to Colorado, where he made efforts to not use funds which could be traced back to him.
The case was investigated by the New York State Department of Financial Services, the Orange County White Collar Crimes Taskforce, and the Orange County District Attorney’s Office. On March 8, 2023, investigators from the New York State Department of Financial Services and Orange County District Attorney’s Office aided the Parker Police Department in executing a search warrant at the residence where the defendant was staying in Parker, Colorado. The defendant was arrested and refused to voluntarily return to New York State to face the charges. The Orange County District Attorney’s Office obtained a governor’s warrant and Soudani was extradited to New York. An Executive Assistant District Attorney had also accompanied the investigators to Colorado.
Soudani was remanded to the Orange County jail with no bail pending further proceedings which are to occur in County Court on July 23, 2023.
District Attorney Hoovler thanked the New York State Department of Financial Affairs for their investigation of the case.
“As technology evolves, criminals will find innovative ways to use it to their advantage,” said District Attorney David M. Hoovler. “I am grateful to the New York State Department of Financial Services and Superintendent Harris for their thorough investigation in tracking the financial transactions in this case, and for closely coordinating and working with the District Attorney’s Office and other members of the Orange County White Collar Crimes Task in this matter. I am also grateful for the assistance of the Parker Colorado Police Department in aiding with search warrant executions and the arrest of Soudani. This prosecution is one of the first of its kind in the Hudson Valley involving the theft of a large sum of money and the use of digital currency to conceal the theft and thwart recovery. This case is an example as to why law enforcement must continue to adapt as technology evolves.
"Martin Soudani and his associates manipulated and preyed upon the trust of New Yorkers, exploiting them for personal gain. As the nation's only prudential regulator of cryptocurrency, DFS remains steadfast in our commitment to safeguard consumers and ensure market integrity," said DFS Superintendent Harris. “DFS stands ready to assist its law enforcement partners, particularly in cases such as this in which the Department’s expertise in the cryptocurrency industry is vital.”
This criminal charge is merely an allegation that a defendant has committed a violation of the criminal law, and it is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the State of New York’s burden to prove guilt beyond a reasonable doubt.