- Federal authorities in North Carolina seized stolen crypto.
- FBI traced funds to various crypto wallets used in scheme.
- Justice Department acknowledged Tether's assistance in the case.
Federal authorities in North Carolina seized almost $5 million worth of Tether linked to a “pig butchering” investment fraud scam.
The US Attorney for the Eastern District of North Carolina said in a release that the funds were traced to crypto addresses associated with the laundering of criminally derived proceeds stolen from victims of such crimes.
“As criminal actors continue to evolve in the world of cyber-enabled fraud, the FBI and its law enforcement partners must also evolve,” said FBI Charlotte Special Agent in Charge Robert M. DeWitt. “This cryptocurrency seizure serves as an example of the FBI adapting to the changing criminal landscape and fighting for victims of cyber-enabled fraud schemes.”
Court filings showed that criminals recruited victims through the guise of romantic relationships to develop their trust. Once the relationships were established, the scammers would claim to have a technique to make big profits trading crypto, and introduce their victims to fictitious crypto trading platforms.
The fake investment platforms displayed a fictitious investment portfolio with big returns, designed to induce the victims to invest more crypto.
When the victims would attempt to withdraw funds, they were unable to do so and met with excuses, including being told that they must pay a tax or penalties to release their funds — a technique used to extract even more money.
In this case, agents and analysts from the FBI were able to trace funds into and through various crypto wallets used in the fraud and money-laundering scheme, some of which still contained large amounts of funds, which were seized.
“Americans are losing their life’s savings to investment frauds as funds are being rapidly transferred to cryptocurrency accounts overseas,” said US Attorney Michael Easley.
He added: “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.”
The Justice Department acknowledged Tether for its assistance in the case.
