On Wednesday, Brooklyn prosecutors disclosed that they have dealt a major blow to an international cryptocurrency scam that stole tens of millions of dollars from Russian-speaking Americans, including many residents of the New York borough.
Key Takeaways
- Brooklyn prosecutors and the FBI dismantled 241 scam websites and 112 servers tied to an international crypto fraud operation.
- The scheme stole tens of millions of dollars from Russian-speaking Americans, including Brooklyn residents.
- Criminals targeted victims a second time with bogus recovery services promising to retrieve stolen cryptocurrency.
Brooklyn Prosecutors and FBI Dismantle 241 Scam Websites and 112 Servers
According to the Brooklyn District Attorney’s Virtual Currency Unit (VCU), the agency shut down around 241 fraudulent websites and 112 servers. The VCU further noted that the Federal Bureau of Investigation (FBI) helped with the investigation. In the press release issued by the Brooklyn DA, prosecutors described the operation as one of the largest cyber enforcement actions ever carried out by a local prosecutor’s office.
“When scammers halfway around the world target Brooklyn residents, they should know they are not beyond our reach,” remarked Brooklyn District Attorney Eric Gonzalez, in a statement. “These criminals stole many millions of dollars from Russian-speaking victims through an elaborate investment scheme, then tried to exploit them again with false promises to recover their money.”
Gonzalez credited the office’s VCU with exposing the fraud, tracing the stolen cryptocurrency, and uncovering the technological infrastructure sustaining the operation before joining forces with the FBI to dismantle it. “By disrupting more than 100 servers and hundreds of fraudulent websites, we have struck at the heart of this criminal enterprise and made it far harder for these scammers to victimize others,” Gonzalez added.
A Second Scam Targeted Victims Desperate to Recover Stolen Crypto
The latest news follows the Brooklyn DA’s digital currency case from last year involving a man who stole nearly $16 million from roughly 100 victims by impersonating crypto exchange support staff. He pleaded guilty and was recently sentenced to up to 12 years in prison. In the cryptocurrency scam complaint revealed on Wednesday, investigators discovered another troubling part of the operation.
Weeks after stealing someone’s cryptocurrency, the scammers would contact the victim again, this time claiming they could help recover the stolen funds. This is called a recovery scam, in which criminals exploit people who have already lost money by offering false promises of getting it back. In other words, the criminals weren’t satisfied with stealing the initial investment. They also attempted to take advantage of victims’ desperation to recover their savings.
“This case is a prime example of what can be done through the power of our partnerships with state, local, and international law enforcement,” explained James C. Barnacle, assistant director in charge of the FBI’s New York field office. “Our partners at Kings County District Attorney’s Office were swift to involve our subject matter experts and together we got to the bottom of the plot, seizing over one hundred domains.”