DOJ Asks Victims to Claim $7M Recovered from a Global Crypto Scam That Used Fake Platforms and Coercion to Drain Investor Funds

The U.S. Department of Justice (DOJ) announced on March 21 that $7 million in proceeds from a cryptocurrency investment fraud scheme have been recovered

The U.S. Department of Justice (DOJ) is urging victims of a global cryptocurrency scam, which involved the use of fake platforms, shell companies, and coercion to drain investor funds, to come forward and claim their share of the $7 million recovered by feds.

The DOJ has successfully cleared the $7 million through a civil asset forfeiture. The funds were part of a broader scheme that defrauded numerous victims worldwide.

“The United States has recovered and cleared title to $7 million of investment fraud proceeds using civil asset forfeiture. The United States will now begin the process of inviting the victims from whom those funds were stolen to submit petitions to have the funds remitted back to them,” the announcement reads.

The announcement follows U.S. District Judge Rossie D. Alston Jr.’s approval of a settlement between the U.S. and a foreign bank, where the funds had been located. The settlement agreement grants the U.S. government full ownership of the recovered funds.

The DOJ’s complaint details how the scammers deceived victims by presenting them with fraudulent cryptocurrency investment opportunities on platforms that mimicked legitimate services.

“These websites were set up to mimic legitimate cryptocurrency investment platforms, but funneled victim funds to the perpetrators through over 75 bank accounts in the names of shell companies. The sites falsely represented to the victims that their investments were making sizeable gains. However, when victims would attempt to make withdrawals, the perpetrators would coerce the victims to send even more money using tactics such as claiming the victims owed taxes on their purported profits,” the authorities explained.

After laundering the funds through a complex series of domestic and international transactions, the perpetrators ultimately transferred the money to a foreign bank. In June 2023, the U.S. Secret Service seized funds from the foreign bank account, prompting the DOJ to file a civil forfeiture complaint.

Following a claim by the foreign bank, a settlement was reached, resulting in $7 million being forfeited to the United States.

The DOJ is now accepting submissions from victims who believe they may be entitled to a portion of the recovered funds. Victims have 180 days to submit their petitions.

This recovery effort underscores the ongoing battle against cryptocurrency fraud and the efforts of authorities to return stolen assets to victims.