ORR- An April 2023 raid of a rural Orr residence by law enforcement has led to the indictment of 44-year-old Joshua Armbrust on a federal charge of felony computer fraud.
Armbrust, who moved to St. Paul not long after the raid, was arrested by FBI agents at his residence there on Nov. 1.
The indictment alleges that Armbrust accessed computer accounts of a former employer without authorization and used them to mine cryptocurrency, a procedure known as cryptojacking.
Armbrust resigned from his position at Minnetonka-based e-commerce and payment processing company Digital River in February 2020, according to court documents. Between December 2020 and May 2021, Armbrust allegedly accessed his former employer’s Amazon Web Services (AWS) accounts without authorization to mine Ethereum, a type of cryptocurrency.
Prosecutors say Armbrust’s unauthorized access to AWS led to more than $45,000 in costs for Digital River. The Ethereum mined in the scheme was directed to a digital wallet and later moved to two Coinbase accounts solely registered to Armbrust. He allegedly liquidated over $7,000 worth of Ethereum cryptocurrency proceeds into his Wells Fargo bank account.
Mining cryptocurrency involves grouping multiple transactions into blocks with complex calculations required for verification. The process, which typically involves a tremendous amount of electrical power, requires a significant amount of computational heft to solve proof of work puzzles to add the transactions to a blockchain. Miners typically earn money through awards of cryptocurrency and transaction fees.
Possible legal action against Armbrust first came to light during the April 2023 FBI raid, which Armbrust described to the Timberjay at the time as a team of 15-20 agents accompanied by an electronics-sniffing dog from the Hibbing Police Department executing a search warrant at his home along Hwy. 23, about five miles north of Orr.
“They came in like a bull in a china shop,” Armbrust said at the time. “They were looking for everything. There’s no drugs, there’s no nothing. It just seemed like overkill. If they had just showed up with two people, I would have let them come in and do whatever they needed to do.”
Armbrust estimated the agents were there going through every room in the house for about six hours. Court documents contain no information of what may have been found during the search, although Armbrust told the Timberjay that they took some old flash drives, a media server, and his phone.
A St. Louis County Sheriff’s Office official confirmed that week that the search was for evidence related to a possible cryptocurrency crime.
The Timberjay contacted Armbrust via email last Friday, who provided some information about his arrest. “I can’t really comment on the case itself, but I’d like to comment on the unnecessarily aggressive means in which I was brought in,” Armbrust said. “The FBI showed up early in the morning (maybe 6-ish) and surrounded my house with cars and high-powered rifles. They knew I was no threat and that I’m not by any means a violent person. I would have come in of my own will without the need to point guns at me and my wife. They make a big show and love to show their power. The incident I’m being accused of is also non-violent. I have no history of anything, not so much as a parking ticket.”
The Timberjay was unable to independently confirm Armbrust’s account of the arrest.
Armbrust is charged with one felony count of computer fraud and made his initial appearance on Nov. 1 in U.S. District Court before Magistrate Judge John F. Docherty. He was released on a personal recognizance bond. His formal arraignment is scheduled for Dec. 20 at the Gerald W. Heaney Federal Building in Duluth. Armbrust is represented by Mauzy Law Offices of Minneapolis.