San Diego, California - The United States took action in federal court last week to protect and ultimately return more than $154 million in funds that were allegedly stolen from a subsidiary of Tokyo-based Sony Group Corporation and then seized by law enforcement during the FBI’s investigation of the theft.
The United States filed a civil forfeiture complaint in the Southern District of California to protect Sony’s interest in the property, which an employee allegedly embezzled in May 2021 and converted to more than 3,879 Bitcoins valued today at more than $180 million. Those funds were seized by law enforcement on December 1, 2021, based on the FBI’s investigation.
According to the government’s complaint, Rei Ishii, an employee of Sony Life Insurance Company Ltd. (“Sony Life”) in Tokyo, allegedly diverted the $154 million when the company attempted to transfer funds between its financial accounts. Ishii allegedly did this by falsifying transaction instructions, which caused the funds to be transferred to an account that Ishii controlled at a bank in La Jolla, California. Ishii then quickly converted the funds to Bitcoin cryptocurrency, the complaint said.
Based on evidence uncovered during the FBI’s investigation, a seizure warrant was authorized in June 2021 by a U.S. Magistrate Judge in the Southern District of California. As alleged in the supporting affidavit, law enforcement was able to trace Bitcoin transfers and identify that approximately 3,879.16 Bitcoins, representing the proceeds of the funds stolen from a subsidiary of Sony Life, had been transferred to a specific Bitcoin address and then to an offline cryptocurrency cold wallet.
The FBI, with significant assistance from Sony and Citibank, continued to investigate in cooperation with Japan’s National Police Agency, the Tokyo Metropolitan Police Department, Tokyo District Public Prosecutors Office, and JPEC (Japan Prosecutors unit on Emerging Crimes). As a result of this coordinated effort, investigators obtained the “private key” – the rough equivalent of a password – needed to access the Bitcoin address. All the Bitcoins traceable to the theft have been recovered and fully preserved. Ishii has been criminally charged in Japan.
“It is our intent to return the stolen money to the victim of this audacious theft, and today’s action helps us do that,” said Acting U.S. Attorney Randy Grossman. “This case is an example of amazing work by FBI agents and Japanese law enforcement, who teamed up to track this virtual cash. Criminals should take note: You cannot rely on cyptocurrency to hide your ill-gotten gains from law enforcement. The United States coordinates extensively with its international partners to forestall crime and retrieve stolen funds.” Grossman thanked the prosecution team, the FBI and Japanese authorities for their excellent work on this case.
“The FBI was able to recover these stolen funds for two very important reasons,” said FBI Special Agent in Charge Suzanne Turner. “First, Sony and Citibank immediately contacted and cooperated with law enforcement as soon as the theft was detected, and the FBI worked in partnership with both to locate the funds. Second, the FBI’s footprint internationally through our Legal Attaché offices and the pre-existing relationships we have established in foreign countries – in this instance with Japan – enabled law enforcement to coordinate and identify the subject. The FBI’s technical expertise was able to trace the money to the subject’s crypto wallet and seize those funds.”
The Major Frauds and Public Corruption Section and Asset Recovery Section of the U.S. Attorney’s Office for the Southern District of California is handling the proceedings, with significant assistance from the Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section and Computer Crime and Intellectual Property Section. The Justice Department’s Office of International Affairs provided investigative assistance. The FBI continues to investigate the alleged crime.