“Through this significant seizure, we disrupted the financial infrastructure of an organized network of scammers who stole millions from victims across the United States. These scammers prey on ordinary investors by creating websites that tell victims their investments are working to make them money. The truth is that these international criminal actors are simply stealing cryptocurrency and leaving victims with nothing,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “The department hopes this recovery of assets will bring some closure and a sense of justice to the over 70 victims affected by this series of scams. This seizure should also serve as a reminder to cybercriminals that, although the current landscape of the cryptocurrency ecosystem may seem like an ideal way to launder ill-gotten gains, law enforcement will continue to develop the expertise needed to follow the money and seize it back for victims.”

According to court documents, criminal actors worked together to target victims and convince them to make cryptocurrency deposits by fraudulently representing that the victims were making investments with trusted firms and cryptocurrency exchanges. In reality, the purported firms and cryptocurrency exchanges were non-existent trading platforms. Agents and analysts from the U.S. Secret Service (USSS) were able to trace those victim deposits and observed that the funds were quickly laundered through dozens of cryptocurrency addresses and exchanged for several different cryptocurrencies, a money laundering technique often referred to as “chain hopping.” These techniques are used to “layer” the proceeds of criminal activity into new cryptocurrency ecosystems, all to obfuscate the nature, source, control, and ownership of those proceeds. The seized funds were linked to numerous victim reports made via the FBI’s Internet Crime Complaint Center (IC3) and Federal Trade Commission’s (FTC) Consumer Sentinel Network.

“This seizure is the culmination of the exceptional hard work and collaborative partnership between the Justice Department and the United States Secret Service,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “Silicon Valley remains one of the world’s preeminent locations for cryptocurrency firms. As such, we remain dedicated to using all tools at our disposal to bring justice to the victims of frauds and scams. Even when money and criminals are abroad, we will work with our partners to seize cyber criminals’ illegal proceeds.”

“This seizure exemplifies the Secret Service’s mission to protect the financial infrastructure of the United States. We remain determined and vigilant to combat cyber-enabled financial fraud,” said Special Agent in Charge Shawn Bradstreet of the USSS San Franscisco Field Office. “It is a priority for the Secret Service to protect the financial security that citizens work so hard to obtain. We want to thank the Justice Department for their partnership, dedication, and outstanding work on this case.”

The USSS San Francisco Field Office investigated this case.

Trial Attorney Georgiana MacDonald of the Criminal Division’s Computer Crime and Intellectual Property Section, National Cryptocurrency Enforcement Team, and Assistant U.S. Attorneys Chris Kaltsas and Galen Phillips for the Northern District of California are handling the case, as well as the seizure and forfeiture actions.

If you are a victim of a cryptocurrency scam, or other scam involving the use of the Internet, please file a report with the IC3 at ic3.gov and with the FTC at www.reportfraud.ftc.gov

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