Federal agents seize $9M worth of cryptocurrency linked to cyber scam group

5 views 2:30 pm 0 Comments November 22, 2023

Federal agents seized $9 million worth of cryptocurrency linked to a cyber scam organization that has exploited more than 70 victims, the U.S. Attorney’s Office for the Northern District of California said Tuesday.

Before the seizure, the Justice Department and the U.S. Secret Service’s field office in San Francisco traced the Tether cryptocurrency, which is pegged to the U.S. dollar, to addresses allegedly linked to a group that scammed its victims through romance and cryptocurrency confidence schemes, the U.S. Attorney’s Office said.

Court documents showed that members of the cyber scam organization convinced their victims to make cryptocurrency deposits by deceiving them that they were making investments with trusted firms and cryptocurrency exchanges. The victims later discovered that these so-called firms and cryptocurrency exchanges are non-existent platforms.

“These scammers prey on ordinary investors by creating websites that tell victims their investments are working to make their money. The truth is that these international criminal actors are simply stealing cryptocurrency and leaving victims with nothing,” Acting Assistant Attorney General Nicole Argentieri of the Justice Department’s Criminal Division said.

Secret Service agents discovered the funds were quickly laundered through dozens of cryptocurrency addresses and exchanged for several different cryptocurrencies, which federal prosecutors note is a money laundering technique known as “chain hopping.”

“These techniques are used to ‘layer’ the proceeds of criminal activity into new cryptocurrency ecosystems, all to obfuscate the nature, source, control, and ownership of those proceeds. The seized funds were linked to numerous victim reports made via the FBI’s Internet Crime Complaint Center (IC3) and Federal Trade Commission’s (FTC) Consumer Sentinel Network,” the U.S. Attorney’s Office said.

U.S. Attorney Ismail Ramsey said his office is working further with partner agencies to seize cyber criminals’ illegal proceeds.

“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,” he said.

According to the U.S. Attorney’s Office, company Tether Limited Inc. assisted in the cryptocurrency seizure from the cyber scam group.

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