Phone Scam Investigation Results in Forfeiture of Nearly $3 Million in Cryptocurrency
For Immediate Release
U.S. Attorney's Office, District of Connecticut
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, and Jean Pierre Njock, Acting Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that an investigation of a fraud scheme targeting vulnerable victims has resulted in the forfeiture of approximately 151 Bitcoins, as well as other digital assets.
According to court documents, in approximately October 2020, overseas individuals began targeting vulnerable victims, including first generation U.S. citizens and elderly persons, through phone calls by pretending to be members of U.S. law enforcement agencies and telling the victims that their identity had been compromised. The overseas individuals used computer programs to make it appear as if their phone calls were coming from legitimate government sources. After gaining the victims’ trust, the overseas individuals requested transfers of money for “safekeeping” with the promise that the victims would receive their money, plus interest, when the perpetrators of the nonexistent identity fraud were captured. Once the overseas individuals had access to the victims’ money, they moved the money through multiple bank accounts and converted the money to digital currency in the form of Bitcoin and other cryptocurrencies.
Law enforcement investigators traced the victims’ money through the various accounts and identified a digital wallet holding Bitcoin and other cryptocurrencies that had been purchased with the victims’ money. The U.S. Attorney’s Office applied for and received a civil asset forfeiture seizure warrant for the digital wallet and, following the seizure, filed a civil asset forfeiture complaint against the digital assets, which resulted in an order of forfeiture from the U.S. District Court of the District of Connecticut.
The U.S. Attorney’s Office used the civil asset forfeiture procedure because the digital assets constituted the proceeds of wire fraud. Although law enforcement continues to investigate the overseas individuals behind this scam, those individuals remain at large. Civil asset forfeiture allowed the government to recover the victims’ money while the investigation is ongoing.
“This office and our law enforcement partners are prepared to use all tools available to investigate, disrupt, and prosecute fraud schemes, especially scams that target vulnerable populations," said U.S. Attorney Avery. "We will continue to be at the forefront of investigating and seizing digital assets such as cryptocurrency when those assets are linked to criminal behavior. Individuals committing crimes will not be able to hide the proceeds of those crimes digitally or elsewhere."
“No matter which cyber tools and methods criminal actors create to defraud members of the public, we at the FBI, U.S. Marshals and the Secret Service dedicate all resources to identifying those responsible and bringing them to justice no matter where they are in the world,” said FBI Acting Special Agent in Charge Njock. “We encourage everyone to conduct due diligence to verify authenticity of who they are dealing with when conducting business online to avoid being a victim of scams.”
This matter is being investigated by the Federal Bureau of Investigation, the U.S. Secret Service and the U.S. Marshals Service. This case was prosecuted by Assistant U.S. Attorney David C. Nelson.
The docket number associated with this case is 3:22-cv-01308 (JCH).
Members of the public seeking to confirm they have been contacted by an actual government employee are encouraged to call the local division of the claimed government entity and ask to be connected directly with the officer or agent they were contacted by. Victims of this scam are encouraged to file a report with their local law enforcement agency and the FBI’s Internet Crime Complaint Center (IC3) at ic3.gov.
Updated January 20, 2023