United States Files Forfeiture Action to Recover Cryptocurrency Traceable to Fraud Scheme

7 views 3:22 pm 0 Comments November 22, 2023

The United States Attorney’s Office has initiated a civil forfeiture action to recover cryptocurrency believed to be proceeds of a “pig-butchering” fraud scheme that targeted Massachusetts residents and was allegedly involved in money laundering. Specifically, the government seeks to forfeit 204,315.87 Tether (USDT) and 18.9649 bitcoin (BTC) seized from two accounts at Binance.com, a cryptocurrency exchange and custodian. Collectively, this cryptocurrency has a current estimated value of approximately $900,000.

In September 2022, an investigation began into a pig-butchering scheme targeting a Massachusetts resident. In a pig-butchering plan, scammers obtain funds from victims using manipulative tactics. The scammer establishes trust with a victim in online communications and then entices the victim into investing in a fraudulent cryptocurrency scheme. Often, the victim is tempted to make additional payments before realizing they are a victim of fraud. 

As alleged in court documents, after targeting a Massachusetts victim and fostering an online relationship, scammers claiming to have access to profitable investment opportunities induced the victim to invest personal funds into a fake cryptocurrency investment platform. During the investigation, additional victims of the pig-butchering scheme were identified. Law enforcement traced cryptocurrency involved in the fraud and money laundering schemes to two Binance accounts, where it was seized.

Engaging in wire communications as part of a scheme to defraud or obtain money through pretenses violates federal law. Additionally, conducting or attempting a financial transaction involving property representing proceeds of unlawful activity, intending to conceal or disguise the nature, location, source, ownership, or control of those proceeds, is also a federal offense. The complaint alleges that the cryptocurrency in question is traceable to proceeds of wire fraud and was involved in money laundering. A civil forfeiture action allows third parties to assert property claims, which must be resolved before the property can be forfeited to the United States and returned to victims.

This is one of several civil forfeiture actions initiated by the U.S. Attorney’s Office seeking to forfeit cryptocurrency linked to fraud schemes targeting victims in Massachusetts.

Members of the public who believe they are victims of cybercrime, including cryptocurrency scams, romance scams, investment scams, and pig-butchering fraud scams, are encouraged to contact USAMA.CyberTip@usdoj.gov.

Acting United States Attorney Joshua S. Levy and Andrew Murphy, Special Agent in Charge of the United States Secret Service, Boston Field Office, announced these developments. Assistant U.S. Attorney Raquelle L. Kaye of the Asset Recovery Unit is prosecuting the civil forfeiture action.

It’s important to note that the details in the civil forfeiture complaint are allegations, and the United States Attorney’s Office has not filed a corresponding criminal action.

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