The United States Attorney’s Office in Ohio is taking action to forfeit millions of dollars in seized cryptocurrency from a scam operation and return it to victims who fell prey to fake investment schemes.
Authorities have filed a request to officially seize around $8.2 million USDT held in three cryptocurrency wallets, with the funds directly linked to the losses suffered by victims. The scam involved scammers running a fraudulent crypto investment scheme, targeting individuals through deceptive tactics such as “wrong number” text messages and fake trading platforms. In total, 33 victims across the U.S. lost a combined $4.9 million, while an additional $1 million was lost by five unidentified victims.
The scam typically began with scammers sending unsolicited texts to random individuals, initiating conversations and eventually persuading them to invest in a dubious crypto venture. Victims were guided through the process of opening legitimate accounts on platforms like Crypto.com and Coinbase, only to be tricked into transferring their funds to a fraudulent investment site controlled by the scammers.
Some victims were allowed to make small withdrawals initially to give the appearance of legitimacy, but eventually found their accounts blocked. When they attempted to withdraw their remaining funds, the scammers demanded additional payments under the guise of tax obligations. Ultimately, victims were locked out of their accounts and lost their entire investments.
One victim, a woman from Lake County, Ohio, lost her entire life savings of $663,000, including funds from her Roth IRA. After reporting the scam to the FBI, an investigation was launched, leading to the identification of the stolen crypto in three wallets. With the assistance of Tether, the funds were frozen and transferred to a law enforcement-controlled wallet.
In a recent forfeiture complaint filed on Feb. 27, U.S. Attorney Carol Skutnik and Assistant U.S. Attorney James Morford requested the court to formally seize the recovered cryptocurrency. It was noted that the wallets also contained additional funds beyond the victims’ losses, which were suspected to be linked to money laundering and wire fraud.
According to a report by Chainalysis, pig butchering scams, like the one uncovered in this case, accounted for a significant portion of scam-related crypto inflows in 2024, with deposits to these schemes increasing by 210% year-over-year.
The efforts to seize and return the stolen cryptocurrency to the victims represent a significant step towards holding scammers accountable and providing restitution to those who were deceived in these fraudulent investment schemes.