The United States, under the U.S. Attorney’s Office for the Eastern District of Virginia and the Secret Service, has said it has successfully recovered $7 million in proceeds from a cryptocurrency investment fraud scheme.
The funds were reclaimed using civil asset forfeiture, and victims of the fraud will now have the opportunity to petition for the return of their stolen money.
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The scam
Court documents reveal that the perpetrators used social engineering tactics to gain victims’ trust before luring them into investing in cryptocurrency through fake websites.
These websites mimicked legitimate cryptocurrency investment platforms but were designed to funnel victims’ funds into over 75 bank accounts held by shell companies. The fraudsters falsely claimed that victims’ investments were generating significant profits.
However, when victims attempted to withdraw their funds, they were pressured into sending even more money under false pretences, such as being told they owed taxes on their supposed gains.
The stolen funds were then laundered through a series of bank accounts, often ending up overseas. Wiring instructions were deceptively labelled as domestic transfers, masking the fact that the money was being sent abroad.
In June 2023, the U.S. Secret Service seized some fraud proceeds from a foreign bank account. The U.S. government initiated a civil forfeiture action, notifying potential claimants and allowing them to contest the forfeiture in court. After a settlement with the foreign bank, $7 million was forfeited to the United States, paving the way for victims to reclaim their losses.
“This recovery underscores our commitment to holding fraudsters accountable and returning stolen funds to their rightful owners,” said Erik S. Siebert, U.S. Attorney for the Eastern District of Virginia.
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How victims can reclaim funds
According to the agency, victims are encouraged to contact the U.S. Secret Service at [email protected] to submit petitions for reimbursement.
“We urge anyone who believes they were targeted by this scheme to come forward,” added Matthew McCool, Special Agent in Charge of the Secret Service’s Washington Field Office.
The information further stated who handled the case and the official website where the victims could submit their requests.
“Assistant U.S. Attorneys Zoe Bedell and Kevin Hudson handled the case. For more information, visit the U.S. Attorney’s Office website or the District Court’s online records.”
