Accused cryptocurrency thief Daniel Chen alleged Caleb & Brown Melbourne Bitcoin rort

A Melbourne crypto broker allegedly fleeced Bitcoin worth more than $650,000 from his ex-employer before fleeing the country.

A jetsetting cryptocurrency trader fleeced Bitcoin worth more than $650,000 from a Melbourne brokerage firm, a court has heard.

Daniel Chen, 24, fronted Melbourne Magistrates’ Court on Friday after he was charged with multiple dishonestly obtain a financial advantage by deception offences.

Chen, of Kew, is accused of fleecing 10 Bitcoin from his former employer Caleb and Brown in June 2018.

The court heard the Bitcoin was valued at just over $93,000 at the time of the alleged deception but worth “two-thirds of a million dollars in today’s money”.

Police had alleged Chen stole other cryptocurrencies including Tether and Ethereum which he transferred to a “digital wallet” but these charges were withdrawn.

Chen’s alleged modus operandi was to conduct crypto transactions under the guise of legitimate Caleb and Brown deals.

Police alleged Chen falsely transferred the high-priced crypto purchases to a digital wallet he controlled and not linked to any Caleb and Brown clients.

According to a police summary tendered to the court, Chen allegedly fleeced the Bitcoin after joining Caleb and Brown as a broker and analyst in December 2017.

Chen allegedly promised to transfer Tether tokens to purchase the Bitcoin.

Prosecutor Brett Sonnet, who told the court no funds had been returned to Caleb and Brown, submitted Chen’s alleged deception began while senior staff were in the United States.

“He’s tested the waters …,” Mr Sonnet said.

“He becomes aware that he is able to engage in the transactions that he has with limited oversight.

“That sounds like a criticism of Caleb and Brown but my submission doesn’t wash Mr Chen’s hands in anyway from the fact that his employer might have one hand not knowing what the other hand was doing … it doesn't take away from the inference (Chen) was being deceptive.”

Caleb and Brown’s then chief operating officer Jackson Zeng noticed exchange account balances were “lower than usual” so he sought a please explain from Chen in June 2018.

Caleb and Brown accountant Tony Fan asked Chen to transfer funds back to the firm and asked him in for a meeting at the company’s former Little Bourke St office.

It was alleged Chen failed to attend the meeting then rang Mr Fan on July 15 to inform him his family was sending him to a drug rehab centre in China.

Chen allegedly told Mr Fan his flight was leaving at 10.30am and he would transfer the funds once he arrived in China.

Australia Border Force records show Chen did not leave the country until October 31.

Mr Zeng and Caleb and Brown co-founder Dr Prash Puspanathan attempted to contact Chen’s parents at their Kew home to resolve the matter.

Dr Puspanathan reported the alleged deception to police on November 7.

Police visited Chen’s home on January 30 2019 but he was still overseas.

Investigators communicated with Chen and his solicitor via email to arrange for his arrest and interview upon his return to Australia.

E-Crime police also served a search warrant at Southbank cryptocurrency exchange Huobi Australia.

Police alleged Chen had established an account with Huobi on January 1, 2018.

Chen was arrested and interviewed after he returned to Australia from South Korea on July 26 last year.

Chen told police he had never transferred Caleb and Brown crypto funds to accounts registered in his own name.

Chen, who was slapped with 19 charges, also stated that all cryptocurrency exchange accounts he opened for Caleb and Brown were in the name of Dr Puspanathan.

The defence submitted there was “no evidence” Chen stole any funds from Caleb and Brown.

“There’s an assumption there was a balance in the accounts greater than the sum needed,” the defence submitted.

“There is no evidence about any amount that was in those accounts.”

Mr Sonnet withdrew 14 charges prior to the commencement of Friday’s committal but Magistrate Fiona Hayes later ruled only a single charge pertaining to the alleged Bitcoin deception could go ahead.

“I’m troubled by the lack of evidence to (three struck out deception) charges …,” Magistrate Hayes said.

“There is evidence Mr Chen had authority, in my view, to transfer money into those accounts for preparation for trades … I’m not satisfied it was his intention to keep the money …

“I propose to commit in relation to (Bitcoin) charge … It was a purchase of Bitcoin for himself which he did not pay for and it is different to the other charges.”

The matter will return to court for a summary jurisdiction battle on October 10.

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