Showing posts with label Core of corruption. Show all posts

Thursday, 3 March 2022

Shocking! MACC officers posed as TNB meter readers were paid in bribes as string cripples Bitcoin syndicates

Sting operation on bitcoin-mining power theft racket nets 18 suspects

Eighteen people have been arrested in relation to the bitcoin mining syndicate busted by a joint sting operation involving Tenaga Nasional Bhd (TNB) and the Malaysian Anti-Corruption Commission (MACC).

MACC stings bitcoin miners

Open sesame A fireman breaking open a reinforced door at one of the Bitcoin mining centres. The raiding team had to break two more such doors before they could enter the premises.
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Electricity stealing spree comes to an end as Macc finally takes action

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In the three years that MACC officers posed as TNB meter readers, they were paid a whopping Rm2.4mil in bribes. The Bitcoin mining syndicates were raking in much more – about Rm50mil a month – but this is about to end soon. JAYA: It was a sting operation that began three years ago during which time MACC officers disguised as TNB meter readers were paid Rm2.4mil in bribes.
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Some were even offered Bitcoin – a first for graft busters – to turn a blind eye to the power theft by mining syndicates.
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The masterminds could afford this. They were raking in a whopping Rm50mil a month from their 1,000-odd premises nationwide.
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Yesterday, the anti-corruption officers crippled much of their activities by conducting simultaneous raids in Malacca, Negeri Sembilan, Kedah, Penang, Kuala Lumpur and Selangor. But it wasn’t easy.
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“It took us an hour to break open two doors at each premises,” a source close to the investigation revealed.
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“And then, there were three more vault-like doors to cut through before we could enter one of the premises,” the source said.
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“We had to seek the help of the Fire and Rescue Services.”
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Dozens of suspects were arrested, including the heads of the syndicates. More than 200 Bitcoin mining machines were also seized in yesterday’s raids that involved dozens of Tenaga Nasional officers.
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“Some 350 MACC officers were involved in the probe,” said the source.
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While it is not illegal to mine Bitcoin, power theft is.
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This is done because running such an operation requires dozens of computer servers that would be in operation around the clock.
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“This would require huge amounts of electricity,” said the source.
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“The amount of electricity stolen at each premises could amount to RM40,000 per month,” added the source, saying that the syndicates earned around RM50,000 from every premises.
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“If they had paid their electricity bills, they could still make a profit because most of them own dozens of premises each,” the source explained.
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“But, greed got the better of them.”
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Bitcoin mining uses sophisticated computer software to try to solve complex mathematical problems to unlock a “key” that will enable a new Bitcoin to be produced.
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The Bitcoin market is highly volatile. Its value fluctuated from RM160,000 to RM277,000 in a month.
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A MACC spokesman confirmed yesterday’s raids.
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Yesterday, The Star reported that Bitcoin mining operators were reaping in millions at the expense of the public.
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Local communities, including hospitals, that shared the same power source as the mining premises, were being deprived of supply.
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Some buildings located near the Bitcoin mining premises experienced power outages often, with some burning to the ground.
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It is understood that the graft busters began the sting operation following a sharp increase in losses incurred by the country due to electricity theft.
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“Each premises owns around 80 to 120 Bitcoin machines.
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“They bring in these machines from China via Port Klang. They declare it as computer equipment,” the source said.
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Investigations are being conducted under Sections 16 (b) and 17 (b) of the MACC Act 2009 and if convicted, the guilty face a maximum imprisonment of 20 years and can be fined not less than five times the value of the bribe or RM10,000, whichever is higher.
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On Jan 24, Energy and Natural Resources Minister Datuk Seri Takiyuddin Hassan said the country lost more than Rm2.3bil in bitcoin mining activities – an increase of 400% over the past four years.
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By ALIZA SHAH alizashah@thestar.com.my

Busting bitcoin bribers

On the watch: A TNB officer checking on a bitcoin mining premises.

`MACC zeros in on miners who pay meter readers to look the other way

PETALING JAYA: Bitcoin mining operators running their operations on stolen electricity and bribing electricity meter readers to help them hide their actions will soon have to pay the piper.
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The Malaysian Anti-corruption Commission (MACC) is zooming in on them and their crime which is causing financial losses in the billions of ringgit.
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“Graft-busters have been looking at dozens of such operators and they are expected to make their move anytime now,” revealed sources with knowledge of the investigation.
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It is learnt that these operators, who have branched out to every state in Malaysia, are even willing to pay up to a quarter million ringgit as bribes to meter readers to look the other way and give them a miss.
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While it is not against the law to mine bitcoin, running such operations requires dozens of computer servers working on a 24-hour basis, which requires huge amounts of electricity.
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Many are not paying their dues and are instead stealing electricity by illegally tapping into power sources or tampering with the meter.
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In an interview with The Star, sources said that in addition to cash, these syndicates even offered bitcoin, or cryptocurrency, as bribes.
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The authorities, they added, kickstarted their on-ground investigation a few years ago following the sharp increase of losses incurred by the country due to electricity theft by bitcoin miners.
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It is understood that the investigations are currently being conducted under Sections 16 (b) and 17 (b) of the MACC Act 2009, which stipulates that giving or offering bribes is equal to the offence of accepting bribes.
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If convicted, the person faces maximum imprisonment of 20 years and can be fined not less than five times the value of the bribe or RM10,000, whichever is higher.
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However, enforcers face several challenges in thwarting these illegal activities, especially since these premises are usually as tightly sealed like as a war-time bunker.
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On Jan 24, Energy and Natural Resources Minister Datuk Seri Takiyuddin Hassan said the country had lost more than Rm2.3bil in bitcoin mining activities – an increase of 400% over the past four years.
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The number of cases has also drastically increased year-on-year.
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In 2018, there were 610 cases while there were 1,043 cases in 2019, 2,465 cases in 2020 and 3,091 cases in 2021, totalling 7,209 cases.
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By ALIZA SHAH alizashah@thestar.com.my

Syndicate’s greed ravaging local communities

Fire hazard: The energy intensive mining activities of bitcoin machines that run 24/7, can lead to power outages, damage to electrical appliances and worse – potential fires. — Photo courtesy of TNB

PETALING JAYA: Bitcoin mining operators running on stolen electricity are reaping in millions at the expense of the public.
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Sources said the syndicates behind the operations were depriving the local communities – including critical sectors such as hospitals which shared the same power source – of their supply.
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The energy intensive mining activities of bitcoin machines that run 24/7, can lead to power outages, damage to electrical appliances and worse – potential fires.
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“Each premises is loaded with mining machines and the operators rely on air conditioning to help cool the equipment.
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“So, their electricity bills can go up to RM40,000 per month for each premises but their profit is just slightly above the amount.

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“That is why they have no choice but to operate using illegal sources (of electricity),” the sources told The Star.
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The Star learnt that some buildings located near these bitcoin mining premises had experienced power outages, with some even burning to the ground.
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“These bitcoin mining premises often use fuses that do not adhere to safety standards and load, exceeding the capacity of the cables. So, unfortunately for their ‘neighbours’, when the fire breaks out, they are also affected.
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“There were instances where reports were lodged over power outages at dialysis centres and clinics and upon investigation, authorities found that these were due to bitcoin mining premises illegally tapping into the power,” said the sources.
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It is understood that some of these bitcoin mining operators own hundreds of premises.
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“Bitcoin mining” is a process of using sophisticated computer software to try to solve complex mathematical problems to unlock a “key” to produce a new bitcoin.
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The first bitcoin miner to solve the puzzle is rewarded with a bitcoin.
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Only one miner can add a new block to the blockchain every 10 minutes by solving the puzzle and to maintain a competitive advantage, many operators would scale up or upgrade their equipment to run round the clock.
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A study in the United States suggested that a single bitcoin transaction required 2209.41 kilowatt per hour (kWh), which was equivalent to 75.73 days’ worth of power consumed by an average household in the country.
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The bitcoin market is highly volatile, with its value having fluctuated from more than RM277,000 in October to over RM160,000 this month.

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MACC stings bitcoin miner

Tools of the trade: (From left) energy commission ceo abdul razib dawood, azam and Baharin looking at the seized computer hardware at the Macc headquarters in Putrajaya.

18 nabbed and rm4.5mil frozen after three-year Op Power

The masterminds behind a multimillion ringgit bitcoin mining syndicate are among 18 individuals arrested by the Malaysian Anti-corruption Commission (MACC), following a threeyear sting operation codenamed Op Power.

MACC chief commissioner Tan Sri Azam Baki said the 18 individuals arrested are all Malaysian males aged between 30 and 60.

“We confiscated 1,157 bitcoin (mining) machines worth Rm2.3mil in total.

“A total of Rm4.5mil was frozen from bank accounts linked to 94 individuals and 29 companies.

“The MACC also seized RM281,180 in cash, RM82,000 in ewallet balances and some US$25,893.46 worth of cryptocurrencies.

“Five vehicles, including a BMW, Toyota Vellfire and an Audi, have also been seized,” said Azam at a press conference at the MACC headquarters here.

Azam added that the MACC is looking to arrest another five individuals with links to the case, but this has been put on hold as the suspects have currently tested Covid-19 positive.

The Star on Sunday and Monday reported on a sting operation that began three years ago during which MACC officers posing as TNB meter readers were paid Rm2.4mil in bribes.

Azam said the syndicate operators offered between RM3,000 and RM300,000 to TNB officers to help cover up their operations.

The syndicate was found to have used special devices to manipulate power usage to ensure that their operations used as little electricity as possible.

Azam said that while cryptocurrency mining is not illegal, power theft is a crime.

TNB chief executive officer Datuk Baharin Din, who was also present at the press conference, said the syndicate used sophisticated methods for their illicit operations.

“The quantum of the power volume that this syndicate has stolen is very large, and it was done continuously for 24 hours and 365 days. This went on for over three years.

“The technique the syndicate used to tamper with the power usage is quite sophisticated.

“You come across small households that try to steal power, but these people go way beyond that.

“To do what they did, you have to be very competent.

“So we are very thankful to the MACC for their big help in this operation and because of them, we managed to stop this syndicate,” said Baharin.

By JOSEPH KAOS Jr joekaosjr@thestar.com.my

`Related posts:

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Environmental impact of cryptocurrency

Bitcoin, digital currencies rally, caution prevails; virtual currency in property

Bitcoin: Utter pipedream

Corruption & incompetence as a result of corrupt policies that breed corruptions & incpmpetency as Malaysia fails in graft index?

Monday, 10 January 2022

Core of corruption, anti-corruption agency corrupt?

Who watches the watchers? The country’s anti-corruption agency has taken a battering of late with some of its officers arrested for corruption. — Filepic/The Star

` Our country seems to be adept at scripting headlines for all the wrong reasons.

` IT looks like the Malaysian Anti-Corruption Commission (MACC) is at its lowest ebb. The agency’s image is in tatters, and in the eyes of the public, an impression has been formed.

` Malaysians expect an enforcement agency fighting graft to be whiter than white, with exacting standards of accountability, transparency and ethics.

` If the MACC can’t deliver that, then how can the public expect the agency to execute its responsibilities and tasks?

` Perception is everything. The timing of the controversy involving its chief, Tan Sri Azam Baki, couldn’t be worse for the agency because trust and confidence in our institutions have eroded badly.

` Just last week, an MACC senior enforcer was charged with misappropriating US$6.4mil (RM25.1mil) seized by the commission four years ago. Shahrum Nizham Baharuddin pleaded not guilty.

` He was accused of criminal breach of trust (CBT) with monies entrusted to him at the MACC special action branch chief’s room in 2019.

` It was reported that former Malaysian External Intelligence Organisation director-general Datuk Hasanah Abdul Hamid tried to reclaim US$6mil (RM25.2mil) in cash that was confiscated from a Cyberjaya apartment after she was granted a discharge not amounting to an acquittal in her CBT case. She claimed that a portion of the cash was missing and was replaced with counterfeit notes.

` Last month, two more MACC officers were arrested in connection with a heist at a businessman’s house in Jalan Ampang, Kuala Lumpur, involving RM700,000. Before that, two other MACC personnel were arrested and remanded over the case.

` And now, Azam has found himself in the news for the wrong reasons. He is under investigation by the Securities Commission for his statement that his brother had used his name to purchase shares in 2015.

` Azam had made this claim following allegations that he had interests and shareholding in several companies. The Anti-Corruption Advisory Board chairman Tan Sri Abu Zahar Ujang subsequently cleared him, saying the board was satisfied with Azam’s explanation.

` But, of course, it didn’t end there. It would be surprising if Azam and Abu Zahar expected it to because it’s naïve of them to underestimate Malaysians, who are generally in a foul mood.

` Surely both know that every securities account opened with a central depository must be in the name of the beneficial owner of the deposited securities, or in the name of an authorised nominee.

` While Azam is understandably furious at the controversy, it’s difficult to be certain if his threat of legal retribution against those responsible will help him.

` He has said “there were efforts by individuals with personal interests or with a bad agenda against the MACC”, saying “we have identified who they are and what their agenda is”.

` Granted, that while there will be individuals or groups with political motives, many ordinary Malaysians are also asking the same questions, and they certainly have no interests.

` Azam may not have to answer directly to the people, but it would definitely be incorrect for him to say that he is only answerable to the advisory board.

` It would also not be wise for him to be so dismissive of the people’s sentiments and give the impression of high-handedness and intimidation.

` It could be ignorance on Azam’s part that led to him allowing his brother, Nasir, to use his account to buy shares on the open market without realising that he had committed an offence.

` But it would be erroneous for him to say that he owes no one any explanation because he is the top MACC chief – surely, by virtue of his position and the agency he serves, Azam is accountable.

` Basically, the people want to know why Nasir needed to use his brother’s account when he has his own.

` Surely Malaysians are reasonable and rational enough to accept convincing explanations.

` There are no rules that say civil servants can’t trade in shares, and if he can invest in the stock market with good supporting documents, there’s no reason to doubt it.

` Likewise, Nasir needs to prove he has sufficient financial means to purchase these shares on the open market and explain why he had to use his brother’s account.

` Malaysians are furious because public figures, whether political or government, have failed badly in terms of trust and integrity. So much so that we have adopted a cynical view of politicians.

` The perception is that the rot of corruption has set at the core. It’s now so entrenched that it has become a culture and an expected way of doing business. Greed has seeped into every crevice of morality, and all this has damaged Malaysia’s cost of doing business and sense of competitiveness.

` Outside Malaysia, we are looked upon as a corrupt country where the rich and powerful can get away with just about anything.

` Worse, those who aren’t familiar with our British-modelled legal system think that convicted persons can walk around freely.

` That is simply because they have not exhausted their appeals avenue. Unlike the US system, they don’t go to jail immediately.

` It doesn’t help that the leadership has chosen to remain silent over many contentious issues when public and government figures fail miserably, such as the mishandling of crises like the recent floods.

` No one seems to take responsibility, and no one has been shown the exit for their utter incompetence.

` In fact, when the public writes complaint letters to the media, to the help desks or even sends e-mails to government websites, the missives often go unanswered, leaving them frustrated.

` Here’s some advice to our leaders: Put your ear to the ground and hear the loud rumblings and grumblings. They’re thunderous!

Wong Chun Wai

Wai Wong Chun Wai Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 35 years in various capacities and roles. He is now group editorial and corporate affairs adviser to the group, after having served as group managing director/chief executive officer. On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.

` https://twitter.com/chunwai09 http://www.wongchunwai.com/

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