Investor Loses All His Money in Elaborate Crypto Scam

The increasing popularity of cryptocurrency continues to present attractive investment opportunities, but it has also opened doors for fraudsters targeting inexperienced investors.

A recent case highlighted by the U.S. Department of Justice (DoJ) reveals how a man from Ohio became the victim of a sophisticated scam, resulting in the loss of his entire life savings.

The scam unfolded in October 2023 when the individual encountered a pop-up alert on his computer, warning of a “technical issue.” The message led him to call the number provided, where he was falsely informed that his retirement account had been compromised and that funds were being illicitly transferred to foreign locations, including China and Russia.

In an effort to resolve the situation, the victim unknowingly allowed scammers to remotely access his computer, which gave them control over his financial accounts. Over time, the fraudsters drained $425,000 from his account and converted it into 947,883 Tether (USDT), a stablecoin, which was then funneled into a digital wallet.

Federal authorities quickly intervened by tracing the stolen cryptocurrency using blockchain analysis. On July 31, 2024, law enforcement executed a federal seizure warrant, recovering the stolen USDT and transferring it into a government-controlled virtual wallet. The U.S. Attorney’s Office for the Northern District of Ohio has filed a civil forfeiture complaint to seize the funds and, if successful, return the money to the victim. The complaint also seeks to recover additional cryptocurrency in the associated wallet, alleging it is fraud proceeds.

This case is just one among many cryptocurrency-related frauds investigated by the U.S. Department of Justice. The department continues to track and address such schemes, with one recent case uncovering a $73 million crypto laundering operation. Notably, Tether provided crucial assistance during this investigation.