The United States Attorney’s Office in Ohio is looking to forfeit millions in seized crypto from a scam operation and return it to victims who were tricked into fake investments.
According to a recent statement, authorities have asked the court to officially seize roughly $8.2 million USDT held in three cryptocurrency wallets. The assets in question include funds directly tied to victims’ losses.
The funds were seized from scammers who ran a fake crypto investment scheme by tricking victims through “wrong number” text messages and fraudulent trading platforms. At least 33 people across the U.S. lost a combined $4.9 million, while five more victims, still unidentified, lost an additional $1 million.
The scam kicks off with scammers sending “wrong number” texts to random people on their phones, dating applications and professional meet-up groups to strike up conversations. Subsequently, they try to befriend the victim before slowly reeling them into a dubious crypto investment, a tactic typically referred to as pig butchering.
Victims are then guided step-by-step on how to open legitimate accounts on platforms like Crypto.com and Coinbase. Once their accounts are funded, the scammers convince them to move the money to what looks like a professional investment site, which, in reality, is a malicious platform controlled by the scammers.
Notably, some victims were even allowed to withdraw small amounts early on to make the scheme seem real. Eventually, their funds were completely blocked, and when they tried to cash out, the scammers demanded additional payment in the name of tax requirements.
“Knowing that the scam would run its course soon, the fraudsters used last-ditch efforts to lie to victims that they had to pay a tax. Ultimately, victims were locked out of their accounts on the investment platform and lost their funds,” authorities said.
One victim, a woman from Lake County, Ohio, reportedly lost her entire life savings of $663,000, including funds from her Roth IRA. She reported the scam to the FBI’s Internet Crime Complaint Center in June 2024, prompting an investigation.
Following a blockchain analysis, authorities traced the stolen crypto to three wallets. The FBI executed a seizure warrant, and with Tether’s assistance, the funds were frozen and transferred to a law-enforcement-controlled wallet.
In a Feb. 27 forfeiture complaint, U.S. Attorney Carol Skutnik and Assistant U.S. Attorney James Morford asked the court to formally seize the recovered crypto, adding that the accounts also contained additional funds beyond what victims lost, which were allegedly tied to money laundering and wire fraud.
As previously reported by crypto.news, pig butchering scams accounted for 33.2% of scam-related crypto inflows in 2024. According to Chainalysis, deposits to these scams surged 210% year-over-year.
