Michael Lauchlan, Gary Zaydman Indicted for Conspiracy for Stealing from their Coin Dispute Network Customers
Manhattan District Attorney Alvin L. Bragg, Jr., today announced charges against MICHAEL LAUCHLAN, 37, and GARY ZAYDMAN, 44, for an alleged conspiracy to steal from customers of Coin Dispute Network (“CDN”), their allegedly fraudulent cryptocurrency asset recovery business, which claimed it could trace and recover cryptocurrency in exchange for a fee. Instead, LAUCHLAN and ZAYDMAN allegedly not only kept the fee but extracted additional Ethereum from nine New York-based customers by making false promises of asset recovery and creating false blockchain tracing reports. LAUCHLAN and ZAYDMAN are charged in a New York State Supreme Court indictment with Conspiracy in the Fourth Degree, Identity Theft in the First Degree, and multiple counts of Grand Larceny in the Third Degree, among other charges. LAUCHLAN is additionally charged with Forgery in the Second Degree and Criminal Possession of a Forged Instrument in the Second Degree for allegedly altering an emailed receipt to falsely reflect that Coin Dispute Network paid WeWork for workspace.[1]
“As alleged, these defendants conspired to use Coin Dispute Network to defraud dozens of people desperate to retrieve their cryptocurrency, and used lies and deception to steal from nine New Yorkers,” said District Attorney Bragg. “Our Investigation Division and its Cyber Crime Bureau follow the money, whether that means cold hard cash or the rapidly evolving world of cryptocurrency. If you have additional information about this alleged scheme or similar crypto scams, please call us at 212-335-9600.”
According to court documents and statements made on the record in court, between January 2022 and June 2023, LAUCHLAN and ZAYDMAN fraudulently induced victims of cryptocurrency scams to pay CDN for cryptocurrency recovery services that the defendants did not and could not provide. As part of their scheme, the defendants operated a website, coindisputenetwork.com, which falsely stated that they were headquartered in Manhattan. LAUCHLAN used the alias “Max Handler” and held himself out to be the Vice President and Chief Recovery Officer at CDN. ZAYDMAN used the alias “Grant Hoffman” and purported to be the Head Recovery Analyst at CDN.
As part of their alleged scheme, the defendants hired employees to assist with scheduling consultations, respond to client calls, and collect payments from clients. They provided false information to their employees, who in turn shared those false statements to clients, including that CDN was a lawfully registered business in the state of Delaware and that it successfully recovered some portion of cryptocurrency for approximately 80% of its clients within approximately six months.
LAUCHLAN and ZAYDMAN allegedly paid for fake advertising, using actors to pose as satisfied CDN clients, and posted those testimonials on CDN’s website and YouTube. The defendants also are alleged to have used false personas on Reddit, Twitter, LinkedIn, and more to comment and post positive reviews of CDN’s services and posted falsified news articles on CDN’s website.
Clients were instructed to pay CDN exclusively using cryptocurrency. The defendants charged an initial consultation fee of 0.1 Ethereum, which had an approximate value of between $100 and $150 depending on the date the payment was made. The defendants then typically charged clients who engaged CDN’s services between 10% and 15% of the value of the cryptocurrency that the clients sought to recover. The defendants allegedly stole from nine New York-based customers.
Once CDN was hired, the defendants allegedly prepared and had employees prepare false cryptocurrency tracing reports and dispute letters which they forwarded to cryptocurrency exchanges. Cryptocurrency exchanges repeatedly advised CDN that they would not accept the dispute letters. Nonetheless, the defendants would falsely report back to their clients that CDN was making progress with their recovery attempts, sending clients emails with false information purporting to show company activity.
Since launching the investigation, the D.A.’s Office has spoken with more than 200 CDN customers in the United States and Canada – none of whom were able to recover any cryptocurrency using CDN. Through blockchain analysis, the Office identified approximately $14,000 of cryptocurrency belonging to CDN users that was transferred to CoinEx, a cryptocurrency exchange. In Spring 2024, the D.A.’s Office executed a seizure order and the funds were transferred to addresses in its control for the pendency of the investigation.
In June 2023, the D.A.’s Office seized CDN’s domain, marking the first time a cryptocurrency recovery site, which have increased in popularity in recent years, has been taken down by the Manhattan District Attorney’s Office. The website now displays a notice alerting potential victims about the site’s seizure pursuant to a court order.
Assistant D.A. Virginia Nguyen (Deputy Chief of the Cyber Crime Bureau, “CCB”) is handling the prosecution of this case under the supervision of Assistant D.A. Jeremy Glickman (Chief of CCB) and Executive Assistant D.A. Jodie Kane (Chief of the Investigation Division). Cryptocurrency Analyst James Miller and Senior Rackets Investigators Patrick Ludlow and Thomas Mullin, working under the supervision of Greg Dunlavey, are assisting with the case. The High Technology Analysis Unit provided invaluable support. Former Assistant D.A. David Ginensky, former Cryptocurrency Analyst Kelly Kenny, former Senior Rackets Investigator Ethan Zubkoff also assisted with the investigation.
The District Attorney’s Office thanked the New York and Las Vegas Field Offices of Homeland Security Investigations, and Customs and Border Protection for the invaluable assistance in the arrest of LAUCHLAN at Harry Reid International Airport in Las Vegas Nevada on July 9, 2024. Homeland Security Investigations and Customs and Border Protection also assisted in the arrest of ZAYDMAN at Los Angeles International Airport on April 30, 2025.
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[1] The charges contained in the indictment are merely allegations and the defendants are presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.