Federal authorities recover over $1.6 million in cryptocurrency tied to investment scam
Richmond, Virginia – The U.S. Attorney’s Office for the Eastern District of Virginia announced the recovery and forfeiture of over $1.6 million in cryptocurrency assets obtained through an elaborate investment scam. These funds, totaling 420,740.422314 USDT (Tether) and 1,249,996.15 BUSD (Binance USD), were seized and cleared of title through a civil asset forfeiture process. Officials are now in the process of returning the recovered property to the victims.
According to federal court documents, the perpetrators contacted their victims under false pretenses—one through a text message and the other through social media. Though the initial outreach appeared to be accidental, both victims engaged in conversation, which gradually led to a deeper connection. The scammers then persuaded the victims to move the conversations to encrypted messaging apps, a tactic that made tracking and transparency more difficult.
Once the perpetrators gained the victims’ trust, they convinced them to invest in cryptocurrency through a website that looked legitimate but was in fact a spoofed version of an actual investment platform. Unbeknownst to the victims, the funds they believed were being invested were actually being redirected into the scammers’ own accounts.
The fraudulent website showed inflated gains on the investments to give victims a false sense of financial success. However, when the victims tried to withdraw large portions of their supposed profits, they were met with resistance. The scammers began demanding additional payments under false pretenses, claiming the victims owed “taxes” and “fees” on their earnings. “The site falsely represented that the victims’ ‘investments’ were making sizeable gains,” but in reality, the perpetrators had no intention of letting the victims access their money.
Through a complex laundering scheme, the fraudsters conducted rapid transactions, converting the stolen cryptocurrency between multiple formats to obscure the origin and final destination of the funds. These tactics were intended to hinder investigators and prevent recovery of the stolen assets.
Despite these efforts, agents with the United States Secret Service successfully tracked and seized the stolen funds from three separate cryptocurrency wallets. The federal government initiated civil forfeiture proceedings by filing a complaint in U.S. District Court, a legal process that enabled them to clear title and begin returning the funds.
Lindsey Halligan, U.S. Attorney for the Eastern District of Virginia, along with U.S. Secret Service officials William Mancino and Meghan Dubea, announced the recovery. The case was led by Assistant U.S. Attorney Kevin Hudson, whose efforts helped dismantle the fraud and reclaim the stolen assets.
This case highlights the increasing complexity of cybercrime and the federal government’s commitment to using every available legal tool to return stolen funds to victims and hold perpetrators accountable.
