Justice Department seizes $112M linked to crypto investment scams

April 3 (UPI) — The Justice Department has seized more than $112 million linked to cryptocurrency investment schemes, often called “pig butchering” or romance scams to entice victims online.

Judges in the District of Arizona, the Central District of California, and the District of Idaho authorized the seizure warrants for six virtual currency accounts, which were allegedly used to launder funds from various cryptocurrency confidence scams, the Justice Department announced Monday.

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According to court documents, the alleged swindlers cultivated long-term relationships with victims they met online before enticing them to invest in cryptocurrency trading platforms run by scammers.

“Transnational criminal organizations are combining confidence scams with technological savvy to swindle Americans out of their hard-earned funds,” said Assistant Attorney General Kenneth Polite, Jr., of the Justice Department’s Criminal Division.

“These particularly vicious frauds — where scammers carefully cultivate relationships with their victims over time — have devastated families and cost individuals their life savings. Now that we have seized this virtual currency, we will seek to swiftly return it to victims,” Polite said.

According to the FBI, investment fraud caused the highest losses out of any scam in 2022, totaling $3.31 billion. Most of the schemes involved cryptocurrency scams, which increased 183% between 2021 and 2022.

The FBI says most of the victims were between the ages of 30 and 49, and most of the schemes were called “Sha Zhu Pan,” which is a Chinese phrase that loosely translates to “pig butchering.” The scam is also referred to as a romance scheme, where the scammer develops a relationship and gains the trust of the victim before encouraging them to invest in cryptocurrency trading. The victims are then denied access to their funds.

“Financial fraud schemes like these demonstrate the great lengths criminals will take to swindle innocent victims out of their money,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “We continue to see these schemes evolve and provide new avenues for criminals to exploit.”

“In addition to our tireless efforts to disrupt these schemes, we must also work to raise public awareness and help inform potential victims,” Polite added.

“Be wary of people you meet online; seriously question investment advice, especially about cryptocurrency, from people you have not met in person; and remember, investments that seem too good to be true, usually are.”