The United States Attorney’s Office in Ohio is pursuing the forfeiture of millions in seized cryptocurrency from a scam operation, with the aim of returning the funds to victims who were tricked into fake investments.

Fraudulent Scheme and Asset Seizure

Authorities have requested the court to officially seize roughly $8.2 million in 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 operation involved scammers sending “wrong number” texts to random people on their phones, dating applications, and professional meet-up groups to strike up conversations.

Pig Butchering Scam Tactics

Subsequently, the scammers would try to befriend the victim before slowly reeling them into a dubious crypto investment, a tactic typically referred to as pig butchering. Victims were then guided step-by-step on how to open legitimate accounts on platforms like Crypto.com and Coinbase.

Once their accounts were funded, the scammers convinced them to move the money to what looked like a professional investment site, which, in reality, was a malicious platform controlled by the scammers. Some victims were even allowed to withdraw small amounts early on to make the scheme seem real.

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.

Investigation and Recovery

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.

Forfeiture Complaint and Ongoing Efforts

In a February 27 forfeiture complaint, U.S. Attorney Carol Skutnik and Assistant U.S. Attorney James Morford asked the court to formally seize the recovered cryptocurrency, adding that the accounts also contained additional funds beyond what victims lost, which were allegedly tied to money laundering and wire fraud.

Tips to avoid falling victim to pig butchering scams:

  • Be cautious of unsolicited messages or conversations that lead to investment opportunities.
  • Verify the authenticity of investment platforms and websites.
  • Never send funds to unknown individuals or unverified accounts.
  • Report suspicious activities to the relevant authorities.

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