The Department of Justice announced today that it has seized an estimated $112 million in virtual currency linked to cryptocurrency investment scams.
The six warrants were approved by judges in the District of Arizona, the Central District of California, and the District of Idaho.
According to court documents, virtual currency accounts were used to launder funds obtained from various cryptocurrency-based frauds. In these programs, the fraudsters cultivate long-term relationships with the victims of the Internet, and then entice them to make investments in fake cryptocurrency trading platforms. The truth is, however, that the funds sent by the victims for these supposed investments are diverted to cryptocurrency accounts and accounts maintained by the scammers and their accomplices.
“Transnational criminal organizations are combining trust fraud with sophisticated technology to cheat Americans out of their hard-earned money,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Criminal Division of the Department of Justice. “These serious scams – where scammers carefully develop long-term relationships with their victims – have destroyed families and cost people their livelihoods. Now it’s we seize this virtual currency, we will seek to immediately return it to the victims. In addition to our tireless efforts to eliminate these programs, we must work to increase public awareness and help identify potential victims: be wary of people you meet online; seriously ask for investment advice, especially about cryptocurrency, from people you don’t know in the body; but remember, the best investments are in reality, the most common.”
In 2022, investment fraud claimed the highest losses of any scam ever publicly reported to the FBI’s Internet Crimes Complaint Center (IC3), at $3.31 billion. Frauds related to cryptocurrency, including pork, represented the majority of these scams, increasing by 183% from 2021 to $ 2.57 billion reported last year.
According to the FBI, the highest number of reports came from victims between the ages of 30 and 49. In these programs, often called “Sha Zhu Pan,” a Chinese word which roughly translates to “pig,” scammers often prey on their victims. through social network and online communication platforms, dating sites, and phone calls and letters that are believed to be misdirected. After gaining the trust of their victims – sometimes for months – the scammers finally come up with the idea of trading in cryptocurrency. They then direct the victims to cryptocurrency investment sites or to conspiracies masquerading as financial advisors or customer service executives. Scammers manipulate websites designed as legitimate trading platforms, applications downloaded by victims on their phones, or malicious smart contracts obtained through software. crypto wallet. When victims make an initial “investment”, platforms appear to show huge gains. In some cases, victims are allowed to return some of these initial gains to restore confidence in the program. It is not until a large amount is involved that victims realize that they cannot get their money back. Even when the victim is denied their money, the fraud is not over. Scammers ask for new investments, taxes, or fees, promising that these payments will be approved by the recipients of their accounts. These scams often continue to steal from the victims and will not stop until they deprive the victims of their remaining balance.
“Depriving scam companies of their ill-gotten gains is an important part of our strategy to combat these crimes,” said Director Eun Young Choi of the Criminal Division’s National Cryptocurrency Enforcement Team (NCET). “We will continue to use all tools to destroy and protect cryptocurrency trust projects, including tracking the money on the blockchain and seizing the cryptocurrency to return the money to the victims, and tracking and taking down online systems used by scammers. Today’s announcements also show the value of early notification by victims of the law; We appreciate the people who came forward to tell the FBI when they were targeted by this scheme.”
“Money laundering cases like this show the lengths to which criminals will go to cheat innocent people out of their money,” said Director Luis Quesada of the FBI’s Criminal Investigative Division. “We continue to see these programs grow and provide new avenues for criminals to exploit. Today’s announcement should serve as a reminder of the FBI’s unwavering commitment, including its our federal and international law enforcement partners, in investigating and pursuing criminals who seek to defraud the American public. Nowhere is the FBI more capable.”
The FBI Phoenix Division is investigating this case.
Assistant U.S. Attorneys Seth Goertz and Ryan Ellersick for the District of Arizona, Daniel Boyle for the Central District of California, and Bill Humphries for the District of Idaho are responsible for the arrest announced today. , with great assistance and coordination by Georgiana MacDonald of the NCET and Tian Huang and Brandon Burkart of the Fraud Section of the Crime Branch.
If you or someone you know is at risk, visit www.fbi.gov/cryptoguard, call your local FBI field office, call 1-800-CALL-FBI, or report IC3 .gov. In your complaint, please refer to the “Pig Butchering PSA.” Include as much information as possible in your complaint including the names of the investment sites, cryptocurrency numbers and transaction hashes, account information, and the names and contact information of the scammers. expected. Keep copies of all communications with scammers and records of financial transactions.