In a significant development, the Justice Department announced today the successful seizure of nearly $9 million worth of Tether, a cryptocurrency pegged to the U.S. dollar. The seized funds were linked to an organized network of scammers involved in romance and cryptocurrency confidence scams, commonly referred to as "pig butchering."
The illicit activities targeted over 70 victims across the United States, leaving them defrauded through false representations of investment opportunities. The criminals created fictitious websites, claiming affiliation with reputable firms and cryptocurrency exchanges, to deceive victims into making cryptocurrency deposits.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division emphasized the impact of the seizure, stating, "Through this significant seizure, we disrupted the financial infrastructure of an organized network of scammers who stole millions from victims across the United States."
Court documents revealed that the criminal actors collaborated to convince victims to make cryptocurrency deposits. The funds were then quickly laundered through various cryptocurrency addresses using a technique known as "chain hopping," which involves exchanging the funds for different cryptocurrencies to obfuscate their origin and ownership.
The U.S. Secret Service (USSS) played a crucial role in tracing victim deposits and identifying the money laundering process. The seized funds were linked to multiple victim reports filed through the FBI’s Internet Crime Complaint Center (IC3) and Federal Trade Commission’s (FTC) Consumer Sentinel Network.
U.S. Attorney Ismail J. Ramsey for the Northern District of California highlighted the collaborative effort between the Justice Department and the USSS, stating, "Silicon Valley remains one of the world’s preeminent locations for cryptocurrency firms. As such, we remain dedicated to using all tools at our disposal to bring justice to the victims of frauds and scams."
Special Agent in Charge Shawn Bradstreet of the USSS San Francisco Field Office emphasized the agency's commitment to protecting the financial infrastructure of the United States. He thanked the Justice Department for their partnership and outstanding work on the case, stating, "We remain determined and vigilant to combat cyber-enabled financial fraud."
The Justice Department hopes that the recovery of these assets will provide some closure and a sense of justice to the more than 70 victims affected by this series of scams. The seizure also serves as a stark reminder to cybercriminals that law enforcement will continue to develop expertise to track and seize illicit gains in the cryptocurrency ecosystem.
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.
