ALEXANDRIA, VA – The United States has recovered and cleared title to $7 million of investment fraud proceeds using civil asset forfeiture. The United States will now begin the process of inviting the victims from whom those funds were stolen to submit petitions to have the funds remitted back to them.
According to court documents, the perpetrators used social engineering to convince victims to invest in cryptocurrency using spoofed investment websites. The social engineering involved the perpetrators getting to know the victims and earning their trust before introducing them to cryptocurrency investment ideas through the spoofed websites. These websites were set up to mimic legitimate cryptocurrency investment platforms, but funneled victim funds to the perpetrators through over 75 bank accounts in the names of shell companies. The sites falsely represented to the victims that their investments were making sizeable gains. However, when victims would attempt to make withdrawals, the perpetrators would coerce the victims to send even more money using tactics such as claiming the victims owed taxes on their purported profits.
The perpetrators laundered victims’ money, often to a location outside the United States. After the perpetrators received the victim funds in the shell company bank accounts, they would transfer them through a series of other bank accounts before ultimately sending them abroad. The wiring instructions affecting these transfers deceptively characterized them as domestic wires, when in fact the funds were bound for a bank outside the United States.
In June 2023, agents with the Secret Service seized some of these investment fraud proceeds from a bank account belonging to the foreign bank. The United States began a civil forfeiture action against the seized funds by publicly filing a civil forfeiture complaint in U.S. District Court. The United States then sent notice of the forfeiture action to every person and entity with a potential property interest in the funds, in addition to giving notice more broadly through online publication, providing potential claimants an opportunity to contest the forfeiture action in court. Following a claim by the bank that owned the account from which the funds were seized, the United States reached a settlement in which $7 million of the seized funds would be forfeited to the United States, allowing victims to petition to recover on their losses.
Erik S. Siebert, U.S. Attorney for the Eastern District of Virginia and Matthew McCool, Special Agent in Charge for the United States Secret Service’s Washington Field Office, made the announcement after the settlement order between the United States and the foreign bank was issued by U.S. District Judge Rossie D. Alston, Jr.
The matter was handled by Assistant U.S. Attorneys Zoe Bedell and Kevin Hudson.
Any person who may have been a victim of this investment fraud scheme may contact the United States Secret Service at cryptofraud@usss.dhs.gov.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:24-cv-2333.