The U.S. Attorney’s Office in Ohio is seeking court approval to return $8.2 million in cryptocurrency to victims of a fraudulent investment scheme. The funds, seized from scammers operating a fake crypto trading operation, were linked directly to the victims’ losses.
According to a recent announcement, authorities have requested the court to formally forfeit the funds held in three cryptocurrency wallets, which were seized following an investigation into a widespread scam. The scam targeted individuals across the U.S. with false investment opportunities, leading to significant financial losses for the victims.
The fraudulent scheme involved scammers contacting victims through “wrong number” text messages sent to random phone numbers, dating apps, and professional networking sites. They engaged victims in conversations before luring them into investing in cryptocurrency. This method, known as “pig butchering,” is designed to slowly build trust before convincing individuals to transfer funds to a fake investment platform controlled by the scammers.
At least 33 individuals across the U.S. lost a combined total of $4.9 million, with an additional $1 million lost by five other unidentified victims. Some of the victims were initially allowed to withdraw small amounts of their investments, making the scam appear legitimate, but eventually, their funds were locked, and additional fees were demanded under the pretense of tax payments.
One particularly tragic case involved a woman from Lake County, Ohio, who lost her life savings of $663,000, including funds from her Roth IRA. She reported the incident to the FBI’s Internet Crime Complaint Center in June 2024, prompting a thorough investigation.
Through blockchain analysis, authorities traced the stolen cryptocurrency to three separate wallets. With the assistance of Tether, the FBI was able to execute a seizure warrant, freezing the funds and transferring them to a law-enforcement-controlled wallet.
In a forfeiture complaint filed on February 27, U.S. Attorney Carol Skutnik and Assistant U.S. Attorney James Morford requested the court to approve the formal seizure of the crypto assets. The complaint also revealed that the wallets contained additional funds suspected of being connected to money laundering and wire fraud activities.
Pig butchering scams have become increasingly prevalent, with such schemes accounting for 33.2% of all scam-related cryptocurrency inflows in 2024. According to Chainalysis, deposits to these scams surged by 210% year-over-year.
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