How Teenage Burglars in Scottsdale Nearly Walked Away With $66 Million in Crypto

A couple in a peaceful Scottsdale neighborhood north of Cactus Road answered their front door on a Saturday morning in late January, anticipating a package. Instead, they were confronted by two teenagers dressed in FedEx uniforms, carrying a dolly and a fictitious package, who broke in, beat the husband, bound them both with duct tape, and demanded their Bitcoin. It reads like a poorly organized scene from a crime thriller. But it wasn’t fiction, and the man suffered a concussion and a broken rib.

Prosecutors claim that Jackson Sullivan, 17, and Skylar LaPaille, 16, drove about 600 miles from San Luis Obispo County, California, to carry out a targeted robbery. The robbery was allegedly planned by a third party known only to the teenagers as “Red,” who interacted with them via the encrypted messaging app Signal and somehow acquired comprehensive information about the couple’s cryptocurrency holdings. According to reports, Red gave them $1,000 to purchase supplies like duct tape, zip ties, and delivery uniforms, told them there was $66 million in cryptocurrency sitting inside that house, and then let them go. Before making the trip, the two teenagers had only been acquainted for a few weeks.

That detail has a quality that is nearly impossible to comprehend. Because someone on the internet promised them a fortune, two high school students who had only known each other for a month are driving through the night toward a stranger’s house in Arizona. They might have really thought it would work. They might have been terrified and unable to escape. According to court records, they told investigators that Red was extorting them, effectively forcing them to commit the robbery under duress. It’s more difficult to determine whether that completely explains their decisions.

For what it was, the operation had a somewhat rudimentary preparation. The uniforms were bought online. To tell the delivery story, they brought a dolly. They had a burner phone and a 3D-printed gun, which turned out to be unloaded. Throughout the actual robbery, a third, unidentified suspect is said to have been on the phone with them, directing the attack in real time. The beating persisted after the male victim denied owning any cryptocurrency. His wife was confined close by. Hiding deeper within the house, their adult son was able to dial 911.

Sullivan and LaPaille were still inside when officers showed up. During the subsequent pursuit, the two ran through the backyard, leaped into a vehicle with a stolen license plate, and drove straight into oncoming traffic. When they reached a dead end in the parking lot of a shopping center, the chase came to an end. Just after 11:30 a.m., both were taken into custody. Earlier that morning, Ari Parker, a neighbor, saw the blue Subaru passing his house slowly and didn’t think much of it. When he returned from his errands, the trunk was open and it was surrounded by police cars. He was unaware that it had anything to do with what was going on on his street.

Beyond the initial shock of two teenagers being charged with nine felonies apiece, the case highlights a problem that the cryptocurrency industry has had difficulty resolving since its inception: the physical vulnerability associated with possessing substantial digital wealth. When questioned, Nicole DeCicco, CEO of CryptoConsultz, was pretty straightforward about it. Physical crimes involving cryptocurrency are uncommon, but they do occur and have for as long as digital assets have been around, she said. The hardware that holds your wallet may be targeted by thieves, or they may target you directly. The attack surface is real in either case.

After the fact, the security advice usually seems reasonable: use cold storage, avoid advertising your holdings, and bolster your security with multi-signature protocols that require multiple wallets to validate a transaction. However, it’s difficult to ignore the fact that the majority of people who amass substantial cryptocurrency wealth interact with others, operate in communities, and live in a society where that kind of information circulates. Red was informed about this Scottsdale couple by someone. That is still one of the case’s most unresolved and subtly unsettling issues. Red has not been publicly identified or charged by investigators, and it is still unknown if they are aware of Red’s location.

In a March hearing, prosecutors pointed out that in the months prior to the Scottsdale incident, at least two similar crimes had taken place in the Bay Area using almost identical techniques—the same strategy, the same overall pattern. This implies that this was not an example of improvised genius. It was probably a technique that had already been tried and tested before being exported to two teenagers who were either willing or under duress to drive 600 miles and knock on a stranger’s door while wearing a FedEx jacket.

Since then, Sullivan has been freed with an ankle monitor and a $50,000 cash bond. The same amount was set for LaPaille’s bond. Sullivan’s lawyer has maintained that his client was duped by an online acquaintance and that his parents were unaware of the situation. That might be accurate. At least in part, it most likely is. However, the Windrose Drive couple still has a victim with a concussion and a broken rib, as well as memories of duct tape and strangers in their house asking for passwords to their virtual wealth. The people who opened that door on a Saturday morning didn’t ask to be targeted, regardless of what the teenagers thought they were entering.