Authorities have received an unexpected near $1m windfall after catching a Sydney-based Netflix scammer and confiscating the proceeds of his sophisticated scheme, a court has been told. The Australian Federal Police arrested Evan Leslie McMahon in March 2019 following a tip-off from the FBI after the young software developer came to the attention of US law enforcement over a website he ran to give subscribers cheap and illegal access to streaming services.
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His targets included Netlfix, Spotify and Hulu – in each case subscribers would pay a small fee that gave them access to an “account generator” that enabled them to procure the username and password of unsuspecting, legitimate users of those services.
In Sydney’s Downing Centre District Court on Friday, the scheme was described as “sophisticated” by Judge John Pickering.
The 23-year-old used a network of email and PayPal accounts to siphon the money and avoid detection, employed assistants to help run the websites and made more than $500,000 in two-and-a-half years.
According to an agreed statement of facts, when McMahon was arrested he transferred cryptocurrency worth $460,000 into an account controlled by police.
The court was told on Friday that its value had since skyrocketed, with Judge Pickering questioning whether there was another example of the police seizing assets and its worth more than doubling.
It’s understood that when the police cashed out the cryptocurrency, it was worth about $1.3m.
“The authorities ended up making money because cryptocurrency had a massive increase in July, which makes me upset because I never invested in it,” Judge Pickering quipped.
McMahon has pleaded guilty to two charges of providing a circumvention service and dealing with the proceeds of crime.
He will also have another three charges taken into account when he is sentenced next month.
Defence lawyer Hament Dhanji SC told the court that given McMahon’s youth – noting the offences began when he was 18 – a non-custodial prison sentence was appropriate.
Because of the nature of the scam, crown prosecutor Talia Epstein said it could not be determined how much McMahon’s crimes had cost the likes of Netflix and Spotify.
She said it was impossible to put a number on how many of his customers would have subscribed to the services via legal means had his websites not been available.
“It’s unrealistic that not a single person using the facility would not have subscribed to Netflix, there are so many good shows on,” Judge Pickering said.
“It’s an unquantifiable loss but a loss nonetheless,” Ms Epstein added.
According to an agreed statement of facts, McMahon ran the “pirate subscription” websites HyperGen, WickedGen, Autoflix and AccountBot that provided illegal access to dozens of streaming services.
For a small fee – sometimes as little as $10 for a lifetime subscription – clients were given log-in details that had been stolen from unsuspecting victims by other people.
Across his four websites McMahon had more than 150,000 users, and when police raided his Dee Why home, they found 69 fake IDs on his laptop.