Investment Fraud Disrupted by Seizure of $5 Million in Cryptocurrency

<_w3a_sdt combobox="t" docpart="DD32CF2DC097465CADBDFF005273334E" id="454751155" sdttag="Location" title="Location"><_w3a_listitem datavalue="RALEIGH" listvalue="RALEIGH"> <_w3a_listitem datavalue="GREENVILLE" listvalue="GREENVILLE"> <_w3a_listitem datavalue="NEW BERN" listvalue="NEW BERN"> <_w3a_listitem datavalue="WILMINGTON" listvalue="WILMINGTON"> <_w3a_listitem datavalue="ELIZABETH CITY" listvalue="ELIZABETH CITY"> RALEIGH, N.C. - The United States Attorney for the Eastern District of North Carolina announced the seizure of nearly $5 million worth of Tether, a cryptocurrency pegged to the U.S. dollar. These seized funds were traced to cryptocurrency addresses allegedly associated with the laundering of criminally derived proceeds stolen from victims of cryptocurrency investment scams, commonly known as "pig butchering."

"Americans are losing their life's savings to investment frauds as funds are being rapidly transferred to cryptocurrency accounts overseas," said U.S. Attorney Michael Easley. "In this case one victim lost his entire individual retirement account to a scam. We are clawing back every dollar we can, even when criminals are located abroad. We are determined to seize their illegal proceeds and return money to the victims.

According to court filings, criminal actors approached and recruited victims through the guise of a romantic relationship to develop their trust. Once the relationship was established, the scammer would claim to have a technique to quickly make large profits trading cryptocurrency and introduce their victim to a fictitious cryptocurrency trading platform that bore a similar name and appearance to a legitimate cryptocurrency trading platform. These fake investment platforms display a fictitious investment portfolio with abnormally large investment returns, which is designed to induce the victim to invest more. When the victims do attempt to withdraw funds, they are unable to do so and are often met with various excuses, including being told that they must pay a "tax" or "penalties" to release their funds, which is just a technique for the scammers to elicit even more money out of their victims.

Once the victims' funds have been transferred to a cryptocurrency wallet under the scammers' control, the funds are quickly moved through many other wallets to obfuscate the nature, source, control, and ownership of those fraud proceeds. In this case, agents, and analysts from the Federal Bureau of Investigation (FBI) were able to trace those victim funds into and through various cryptocurrency wallets allegedly used in furtherance of the fraud and money laundering scheme, some of which still contained large amounts of funds subject to seizure and forfeiture.

"As criminal actors continue to evolve in the world of cyber-enabled fraud, the FBI and its law enforcement partners must also evolve," said FBI Charlotte Special Agent in Charge Robert M. DeWitt. "This cryptocurrency seizure serves as an example of the FBI adapting to the changing criminal landscape and fighting for victims of cyber-enabled fraud schemes."

The Department would like to acknowledge Tether for its assistance in effectuating the transfer of these assets.

If you are a victim of a cryptocurrency scam, or other scam involving the use of the Internet, please file a report with the IC3 at ic3.gov and with the FTC at www.reportfraud.ftc.gov.

Related court documents and information from the seizure warrant are on PACER by searching for Case No.<_w3a_sdt docpart="C382A479213E468B9D0E55FA733FB27A" id="-279420026" sdttag="Case No." title="Case No.">5:24-MJ-1976.