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Florida State Employee Arrested for Mining Cryptocurrency on Agency Infrastructure

Rahul Nambiampurath
Last Updated March 4, 2021 5:05 PM
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According to a statement released by the Florida Department of Law Enforcement (FDLE), an employee at the Department of Citrus was found using state-owned computing hardware to mine cryptocurrencies. The perpetrator, Matthew McDemott, served as the information technology manager for the department, which overlooks the functioning of the citrus industry in Florida.

The FDLE arrested McDermott shortly after the discovery and had him transported to Polk County jail. The cryptocurrency mining operation was discovered after an evaluation of the department’s utility bill amounts. According to the department’s inspector general, the months between October 2017 and January 2018 saw a jump of $825 in electricity costs.

Mining refers to the act of verifying of transactions within a cryptocurrency’s network. The FDLE also attempted to explain McDermott’s motives, stating,

“A mining pool, or team, is used to solve mathematical equations in an effort to mine the virtual currency and win a reward. The pool combines its resources to help offset costs.”

Government owned computational resources have actually been the target of clandestine cryptocurrency mining operations for a very long time now. Given that computers in some state-owned facilities are quite powerful because of the workload they need to handle, individuals are often tempted to use them for self gain. Just a few days ago, for instance, the Louisiana Attorney General sacked several IT employees after they were found guilty of using government computers to mine bitcoin.

In February 2018, a BBC report also revealed that hackers had successfully injected  a cryptocurrency mining script into the Information Commissioner’s Office website. The hijacked website would use the processing power of a visitor’s computer to mine cryptocurrencies without the knowledge of the user.

The United States is not alone in its battle against unauthorized use of its computers for cryptocurrency mining. According to another BBC report , several Russian nuclear scientists were arrested following the discovery of their plot to mine bitcoin at a top-secret nuclear warhead facility in Sarov, Russia.

In most cases, the penalty for using government resources for personal gain is not very severe at all. However, in this instance, Matthew McDermott also used a state purchasing card to obtain additional mining hardware worth $22,000. The money was reportedly used between July and December 2017 to purchase 24 graphic processing units according to the Florida law enforcement agency. Because of the extended nature of his crime, McDermott has been charged with grand theft on top of official misconduct and had his bail set at $5,000.

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