The federal government has seized over $1 million in cryptocurrency from a fraud scheme orchestrated via text messages and social media.
The U.S. Attorney’s Office for the Eastern District of Virginia has recovered and cleared title to 420,740.422314 USDT, also known as “Tether,” and 1.2 million BUSD, also known as “Binance USD,” representing cryptocurrency investment fraud proceeds and property involved in money laundering, through civil asset forfeiture.
Both USDT and BUSD are cryptocurrencies equivalent in value to the dollar. The United States is now returning that property to the victim.
The 23-page lawsuit said that the perpetrators of the fraud scheme contacted one victim by text message and the other victim through social media. These unsolicited contacts were purportedly accidental. Still, after the victims responded, the perpetrators enticed the victims into continuing the communications and eventually convinced them to move to an encrypted chat application.
The perpetrators then earned the victims’ trust before encouraging them to “invest” in cryptocurrency using a spoofed investment website. Although the website mimicked a legitimate cryptocurrency investment platform, the spoofed site funneled victims’ funds to the fraudsters.
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The site falsely represented that the victims’ “investments” were making sizeable gains. When the victims attempted to make any significant withdrawals, however, the perpetrators coerced the victims to send more money, using tactics such as claiming the victims owed taxes and fees on their “profits.”
Ultimately, the perpetrators never let the victims withdraw anything more than trivial amounts and stole the victims’ money. After receiving the victims’ funds, the perpetrators laundered them by conducting a series of complex transactions and making quick exchanges between cryptocurrencies to hide the funds.
Agents with the United States Secret Service seized 420,740.422314 USDT and 1,249,996.15 BUSD from three cryptocurrency wallets. The United States initiated a civil forfeiture action against the seized funds by filing a complaint in U.S. District Court.
Lindsey Halligan, U.S. Attorney for the Eastern District of Virginia; William Mancino, Special Agent in Charge of the U.S. Secret Service Criminal Investigative Division; and Meghan Dubea, Resident Agent in Charge of the U.S. Secret Service Raleigh Resident Office, made the announcement.
Assistant U.S. Attorney Kevin Hudson handled this matter.