The Department of Justice announced Monday that it seized six virtual currency accounts worth an estimated $112 million linked to cryptocurrency investment scams in Arizona, California and Idaho. The FBI Phoenix Division is investigating this case.
According to court documents, the six virtual currency accounts were allegedly used to launder money from various cryptocurrency scams. In these schemes, fraudsters cultivated long-term relationships with victims they met online and eventually enticed them to make investments in fraudulent cryptocurrency trading platforms.
The funds sent by victims for these fraud investments were instead funneled to cryptocurrency addresses and accounts controlled by scammers and their co-conspirators.
“These particularly vicious frauds — where scammers carefully cultivate relationships with their victims over time – have devastated families and cost individuals their life savings,” said Assistant Attorney General Kenneth A. Polite Jr. of the justice department’s criminal division. “Now that we have seized this virtual currency, we will seek to swiftly return it to victims.”
The Department of Justice said they hope to raise public awareness surrounding these schemes. They warned the public to be wary of people they meet online and to seriously question investment advice, especially regarding cryptocurrency and investments that seem too good to be true.
In 2022, investment fraud caused the highest losses of any scam reported by the public to the FBI’s Internet Crimes Complaint Center. Frauds involving cryptocurrency represented the majority of these scams with $2.57 billion in reported losses last year.
According to the FBI, the highest number of reports came from victims between the ages of 30 and 49. In these schemes, scammers often target their victims through social networking and online communications platforms, dating websites, and phone calls and text messages that are meant to appear to have been misdialed.
After gaining the trust of their victims — sometimes over a period of months — scammers eventually introduce the idea of trading in cryptocurrency. Then, they direct victims to cryptocurrency investment platforms where scammers control websites that are built to look similar to legitimate trading platforms.
Once victims make an initial “investment,” the platforms purport to show substantial gains. Sometimes, victims are even allowed to withdraw some of these initial gains to further gain trust in the scheme. It is not until a large investment is made that victims find that they are unable to withdraw their funds. Even when a victim is denied access to their funds, the fraud is often not yet over. Scammers request additional investments, taxes, or fees, promising that these payments will allow victims access to their accounts.
If you or someone you know is a victim, visit www.fbi.gov/cryptoguard, contact your local FBI field office, call 1-800-CALL-FBI, or report it to IC3.gov. In your complaint, please reference, “Pig Butchering PSA.” Include as much information as possible in your complaint including names of investment platforms, cryptocurrency addresses and transaction hashes, bank account information, and names and contact information of suspected scammers. Maintain copies of all communications with scammers and records of financial transactions.
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