The U.S. attorney for the Eastern District of North Carolina said that investigators seized almost $5 million worth of Tether, a cryptocurrency pegged to the dollar, which was allegedly defrauded from Americans as part of an investment scam.
This type of scam began in China in 2019 and is now becoming more prevalent in the United States. In the current case, it is alleged that criminals defrauded people by first approaching them under the pretext of romantic relationships to build up trust, the statement said.
Once trust was earned, the alleged victims were introduced to a fake cryptocurrency trading platform and told they could quickly make large profits.
The platform had the name and appearance of a legitimate crypto trading company. The fake platform promised abnormally large investment returns to entice the alleged victims into investing funds. Withdrawal of funds then became impossible post-investment with the platform, with various excuses given, according to the statement.
For instance, investors were told they needed to pay penalties or a tax to make withdrawals.
Once the funds were transferred into a crypto wallet under the control of scammers, they were allegedly moved through several other wallets to obscure their nature and ownership.
“Americans are losing their life’s savings to investment frauds as funds are being rapidly transferred to cryptocurrency accounts overseas,” U.S. Attorney Michael Easley said. “In this case one victim lost his entire individual retirement account to a scam. We are clawing back every dollar we can, even when criminals are located abroad. We are determined to seize their illegal proceeds and return money to the victims.”
The Department of Justice acknowledged Tether for helping authorities with the recovery of funds. Tether said it assisted the FBI by freezing multiple crypto wallets, which led to the successful seizure of the funds.
The company said it has assisted more than 145 enforcement agencies in 40 jurisdictions, claiming back more than $108 million in stolen funds. More than 1,900 wallets have been blocked for illicit activity in the process, it said.
Red Flags
In light of recent scams, Michigan’s attorney general listed some red flags to watch out for to identify potential pig butchering schemes.This includes strangers sending messages out of the blue and seeking to move the conversation quickly to WhatsApp or other social media sites. Such individuals may refuse to engage in video-calling. The scammers could also discuss “insider investment knowledge.” Moreover, the investment opportunity may sound too good to be true.
The attorney general advised not to “send money, trade, or invest with a person you have only met online” or to “speak of your financial position or investments.”
“Don’t provide your banking information, social security number, copies of your identification or passport, or any other sensitive information to anyone online or to a site that you cannot verify is authentic,” the attorney general stated.
