Judge jacks up sentence for New York City crypto scammer to 12 years

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A man who got 18 months in prison for his part in a scheme to steal $22 million in cryptocurrency saw his sentence increased to 12 years after failing to pay back his victim as he had promised.

Nicholas Truglia received the stiff new sentence Thursday, after U.S. District Judge Alvin Hellerstein found he had willfully failed to honour his agreement to pay nearly $20.4 million in restitution.

“You paid not a cent, not one cent,” Hellerstein told Truglia, 27, in resentencing him to eight times his original prison term. The judge ordered Truglia, who has already served his original sentence, taken into custody immediately after the hearing.

Mark Gombiner, Truglia’s lawyer, told Hellerstein the sentence was illegal and “an extraordinary abuse of discretion.” He promised to appeal.

Truglia pleaded guilty in 2021 to participating in a complex scheme to gain control of the victim’s cell phone and steal more than $20 million of his cryptocurrency. He was charged as part of a ring of “evil computer geniuses” who tricked telecom employees into transferring customers’ cell numbers to SIM cards the hackers.

The group targeted Michael Terpin, the founder and chief executive officer of Transform Group, which advises blockchain businesses on public relations. The hackers recruited Truglia to convert stolen digital tokens into Bitcoin after they drained Terpin’s cryptocurrency accounts.

During Truglia’s initial sentencing hearing, it emerged that he had $53 million in assets, including crypto, art and jewelry. Gombiner, argued in a court filing that Truglia has “surrendered every valuable asset he has access to,” including all the money in a Wells Fargo & Co. account.

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Truglia said much of his wealth was contained in bitcoin wallet that he could not access. If he could, he would pay what he owes, he said.

But Terpin, participating in the hearing by phone, called Truglia’s claim  “a giant smoke screen.” The judge slammed his lavish lifestyle.

“You didn’t have a job, but you lived in splendour,” the judge said to Truglia.

The case is US v. Truglia, 19-cr-00921, US District Court, Southern District of New York (Manhattan).