The Texas brothers who kidnapped a Grant man and held his wife and adult son hostage at gunpoint for nine hours last week stole $8 million in cryptocurrency from the family, authorities said Thursday.
The men were charged Wednesday with kidnapping in U.S. District Court. Raymond Christian Garcia, 23, and Isiah Angelo Garcia, 24, both of Waller, Texas, also face seven counts each in Washington County District Court in connection with the armed kidnapping, burglary and aggravated robbery Sept. 19 at a house in the 7300 block of Inwood Way North.
Isiah Angelo Garcia, left, and Raymond Christian Garcia (Courtesy of Waller County, Texas, Sheriff’s Office)
The brothers were arrested Monday in Texas.
The armed kidnapping and cryptocurrency heist caused a “shelter in place” warning to be issued in the immediate area of 75th Street North and Inwood Way in Grant and caused the cancellation of Mahtomedi High School’s homecoming football game against Bloomington Kennedy. The stadium is about a mile away from where the kidnapping took place.
“A violent kidnapping that stole $8 million and silenced a homecoming game is not just a crime. It is a blow to the sense of safety of everyone in Minnesota,” Acting U.S. Attorney Joseph Thompson said in a statement. “This is not normal. Minnesotans should not accept wild violence and thievery as normal.”
Police learned of the incident when the couple’s son called 911 around 4:45 p.m. Sept. 19 and whispered into the phone that he and his parents had been kidnapped and were being held hostage at gunpoint in their home, according to the criminal complaint.
The incident started around 7:45 a.m. Friday when the Grant man, bringing his garbage can out to the street from inside the garage, was confronted by the Garcias who “ran out from alongside the house’s driveway, pointing an AR-15-style rifle and a shotgun at him,” the federal complaint states. “They quickly escorted him back into the garage, where they bound his hands with zip ties and then brought him inside the house.”
The men then woke up the man’s wife and their son, both at gunpoint, bound them with zip ties and forced them to lie on the floor of the upstairs bedroom, the complaint states.
Raymond Garcia, armed with the AR-15 semi-automatic rifle, held the wife and son in their residence for the following nine hours.
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Isiah Garcia, armed with the shotgun, escorted the man around the house and forced him at gunpoint to log into his cryptocurrency accounts, the complaint states.
“Isiah demanded that (he) transfer large amounts of cryptocurrency to an unknown cryptocurrency wallet that he had provided,” the complaint states.
The brothers frequently made phone calls to an unknown third party and “the third party appeared to be providing the information related to the cryptocurrency accounts and transfers,” the complaint states. “Through this third party, (the Garcias) became aware at a certain point that (the man) had additional cryptocurrency funds that he had not yet provided.”
When the man explained that the remaining funds were on a hard-drive style cryptocurrency wallet that was stored at their family cabin in Jacobson, Minn., approximately three hours away, Isiah Garcia forced the man to drive the man’s truck to the cabin at gunpoint, according to the complaint.
At the cabin, the man transferred the remaining funds to Isiah Garcia’s provided cryptocurrency wallet before the two returned to the house in Grant. In total, Isiah Garcia forced the man to transfer $8 million worth of cryptocurrency, according to the complaint.
Largest financial crime
The $8 million heist is believed to be the largest financial crime ever committed in Washington County.
“Honestly, I’ve been here 32 years, and I don’t remember anything as large as this,” Washington County Sheriff Dan Starry said Thursday. “It was terrifying for the victims and also the community. But through great police work, the resolution is that they’re being held accountable and they’re behind bars.”
Paul Sibenik, CEO of CryptoForensic Investigators, said crypto-related kidnappings, extortion, and “$5 wrench attacks” are becoming more and more common.
“They have definitely become more common in the past year or two, and that is a reality that cryptocurrency holders need to be prepared for,” he said.
“Wrench attacks” — a name that originated in a xkcd post that basically mocked how easily high-tech security can be undone by hitting someone with a $5 wrench until they give up passwords — are on the rise because stealing a digital wallet can be easier than stealing money from a traditional bank account, Sibenik said.
“In many ways it is easier though kidnapping/extortion since the transactions can’t be reversed, and the attackers obtain custody and control of the funds — much like cash, albeit digital,” he said. “The funds aren’t directly sent to a custodial solution, something that would be akin to a bank.”
Cryptocurrencies like bitcoin offer traders full control of their funds without the need for a bank or permission from a government to buy, sell or hold it. The trade-off is that if funds are lost or stolen, there can be no way to get them back, he said.
Gone forever?
Does that mean the man’s $8 million is gone forever?
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“There’s no way to reverse/recall the transaction, as would be the case with a wire,” Sibenik said. “It is sometimes possible to get some of the funds back, but depends on a variety of factors, i.e. if the thief is caught, where/how they launder the funds, how cooperative exchanges are that receive stolen funds, etc… The victim might be able to get some of the funds back in the end, or might get nothing. It depends. Full recoveries are extremely rare.”
Sibenik said having $8 million in crypto might not be as unusual as people might think.
“It’s not common by any means, but more common than you think,” he said. “Some cryptocurrencies are seen by many as a store of value, albeit more volatile, and effective protection against inflation. Some people choose to store wealth in precious metals for example, since those metals can’t be arbitrarily printed by a government, but do inflate a bit, and there are costs associated with mining it.”
The Associated Press contributed to this report.
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