DOJ to Reimburse Victims of Wire Fraud Scheme as Bitcoin Value Surges

The U.S. Department of Justice is set to reimburse victims of a wire fraud scheme, thanks to the tripling value of Bitcoin since the cryptocurrency was seized. The scheme, which targeted real estate transactions, resulted in millions of dollars in losses for businesses and individuals.

Details of the Wire Fraud Scheme

In December 2023, fraudsters infiltrated systems used in real estate transactions, sending fake wire transfer instructions to divert funds intended for mortgages and other payments. One company reported losing over $1 million. Investigators later uncovered at least ten additional victims, with individual losses ranging from $75,000 to $425,000, according to the DOJ.

The stolen funds were laundered through multiple bank accounts and eventually consolidated into a cryptocurrency wallet controlled by fraudsters in Nigeria. Law enforcement seized 32.68 Bitcoin from the wallet, valued at $900,000 at the time.

Victim Compensation Facilitated by Price Surge

Since the seizure, Bitcoin’s price has more than tripled, significantly increasing the value of the seized assets. This rise in value now allows the DOJ to compensate each of the ten victims who filed claims, potentially making them whole.

Some key points to know about this case:

  • The DOJ filed a civil forfeiture case to claim the seized Bitcoin.
  • Civil forfeiture is a legal process where authorities seize assets linked to criminal activity, even before suspects are arrested.
  • The U.S. Attorney’s Office is working diligently to make the victims whole.

“I commend the quick work by law enforcement and the Asset Forfeiture Unit who moved to seize this Bitcoin and are working diligently to make these victims whole,” said U.S. Attorney Tessa M. Gorman. “Civil forfeiture is an important tool that we can use to help victims, even before the bad actors themselves have been arrested.”

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