Crypto Scammer Gets 12 Years After Failing to Pay $20M

Key Takeaways

• Extended Sentence: Nicholas Truglia’s prison sentence increased from 18 months to 12 years for failing to pay court-ordered restitution
• Hidden Assets: Despite owing over $20 million in restitution, Truglia was found to possess assets worth more than $61 million
• SIM Swap Attack: The case involved sophisticated SIM swap fraud targeting cryptocurrency investors, resulting in $24 million in losses
• Legal Precedent: The case demonstrates serious consequences for cryptocurrency scammers who fail to comply with court-ordered restitution payments
• Victim Impact: Michael Terpin, CEO of Transform Group, was the primary victim who lost significant cryptocurrency holdings through the scheme

Nicholas Truglia, a cryptocurrency scammer initially sentenced to 18 months in prison in 2022, had his prison term dramatically extended to 12 years on Thursday after failing to pay restitution to his 2018 victim. According to court filings, Truglia defaulted on over $20 million in restitution owed to crypto investor and Transform Group CEO Michael Terpin.

“At sentencing, Mr. Truglia demonstrated good faith in making full restitution to the victim for the money he stole,” Judge Alvin Hellerstein noted in the July 2 order. However, the order added: “Mr. Truglia has failed to perform his restitution obligation and has actively evaded law enforcement and judicial efforts to enforce it. Despite evidence at trial showing he possessed assets worth $61,830,828.10, significantly more than his restitution obligation and he has not made any payments.”

In the original sentencing, Judge Hellerstein had also imposed three years of supervised release alongside the 18-month sentence and restitution. Truglia was convicted of wire fraud for orchestrating SIM swap attacks to hijack Terpin’s phone and steal his cryptocurrency.

SIM Swap Fraud Scheme Leads to Truglia’s Downfall

SIM swapping involves fraudsters transferring a victim’s phone number to a new SIM card, enabling them to intercept authentication messages (like 2FA codes) from banks and crypto exchanges. This exploit capitalizes on the reliance on mobile numbers for identity verification..

In 2018, Truglia was arrested for targeting investors across California’s San Francisco Bay Area via SIM swaps. That same year, Terpin filed a $224 million lawsuit against AT&T, his mobile carrier at the time, for negligence and allowing Truglia to compromise his mobile phone.

Terpin lost $24 million in cryptocurrency to the SIM swap fraud scheme. The cryptocurrency investor also filed a $75 million civil lawsuit against the scammer and was awarded full damages by the court in 2019.

With billions stolen in crypto theft annually, this ruling sets a stark precedent: courts will punish non-compliance harshly. As authorities ramp up efforts against crypto cybercrime, failing to honor restitution can result in a sentence of over a decade behind bars. For victims and investors, it underscores the critical need for robust security beyond SMS-based authentication.