‘Misguided’ - parents of teenage hacker moved hoard of cryptocurrency during investigation
PUBLISHED: 17:11 02 October 2019 | UPDATED: 08:01 03 October 2019
Copyright: Archant 2019
The parents of a convicted teenage hacker have been given suspended prison sentences for moving ill-gotten cryptocurrency from a seized hardware wallet in a “misguided” attempt to help him.
Carlie and Jason Gunton's son Elliott Gunton, now aged 20, was convicted in 2016 for his role in the cyber-attack on the telecommunications giant TalkTalk.
He was convicted of further hacking offences this year and had been denied bail during the police investigation as a result of his parents' actions, Norwich Crown Court heard on Wednesday.
Gunton found a vulnerability in TalkTalk's website and shared details of this online, telling the youth court where he was sentenced: "I was just showing off to my mates".
While he did not exploit the information for gain, others did after he exposed the vulnerability.
TalkTalk said the fallout from the cyber-attack in October 2015 cost it £42 million and the personal data of nearly 160,000 people was accessed.
As part of his sentence, police would periodically inspect his internet-enabled devices, and it was as a result of this that officers detected further suspected computer misuse.
Gunton was arrested in June 2018 and a hardware wallet was seized. The hardware wallet, which could be used as a digital safe for cryptocurrency like Bitcoin, was protected with a 24-word password, Norwich Crown Court heard on Wednesday.
It could not initially be accessed by police but Gunton provided the password when asked in September 2018.
Kevin Barry, prosecuting, said Gunton's parents would regularly visit their son in prison while he was on remand.
After one of these visits in August 2018, police discovered that cryptocurrency had been transferred out of the reach of the seized hardware wallet by someone using Jason Gunton's laptop, Mr Barry said.
He said that £200,000 of cryptocurrency was transferred and while it was not all shown to be criminal, tens of thousands of pounds of it was.
Police visited the separate addresses of Gunton's mother and father, who are separated, Mr Barry said, and the money was later transferred back.
In a recorded prison phone call, Carlie Gunton told her son that "we had moved the money and we're now in trouble", Mr Barry said.
Police found a piece of paper with the 24-word password written on it in Mrs Gunton's recycling bin.
Mr Barry said Carlie and Jason Gunton did not seek to profit from their actions but wanted to help their son, who was unaware of what they had done.
"The prosecution say it was Jason Gunton who carried out the physical actions leading to the transfers," said Mr Barry.
"Mrs Gunton supplied the 24-word recovery phrase to enable him to do that. "How she comes by it, the prosecution can't be 100% clear on.
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"She wasn't clear about it in interview - she gives differing accounts."
Judge Stephen Holt told the defendants: "You misguidedly tried to help your son and what you did didn't help him at all, and I'm sure it's something you're regretful about."
He described their son as a "quite brilliant computer expert" who "unfortunately put his expertise to criminal uses".
He said that Gunton was "extremely angry" at what his parents had done "knowing the consequences for him".
Gunton remained in custody until his court case concluded in August this year.
He was given a 20-month prison sentence for hacking offences and money laundering but was immediately released from the court as he had already served his jail time while on remand.
He was also ordered to pay back more than £400,000.
The judge told Gunton's parents on Wednesday: "The message must be sent out that misguided loyalty to a son or a daughter when this amount of money is involved, the courts cannot ignore it."
Carlie Gunton, 44, of Mounteney Close, Norwich, admitted transferring criminal property and was given a three-month prison sentence suspended for one year.
Jason Gunton, 45, of Sunderland Close in Norwich, admitted the same charge alongside a second charge of perverting the course of justice. He was sentenced to five months in prison suspended for a year.
Both were ordered to pay £600 costs.
Matthew McNiff, for Carlie Gunton, said after she provided the password she "effectively closed her eyes" and had made a "dreadful mistake".
He said her £240,000 of her son's seized Bitcoins were sold at auction on Monday, and her son faces an indictment in California.
He said there is a "real possibility he will be transferred to the USA" and she may struggle to obtain a visa due to her conviction.
Andrew Oliver, for Jason Gunton, said the defendant "intended to help Elliott".
After the hearing, detective sergeant Mark Stratford said: "These offences came to light as a result of complex enquiries in the linked case of Elliott Gunton. His parents involved themselves in a serious investigation by moving hundreds of thousands of pounds worth of cryptocurrency whilst efforts by police to secure these assets continued.
"Carlie and Jason have acted in what appears to be a misguided attempt to help their son, but have instead found themselves at the centre of a criminal investigation.
"This error in judgement has left them both with suspended prison sentences and a criminal record which will no doubt impact their lives moving forward."
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