Key Takeaways
- Prosecutors targeted 456,602 USDT, valued at $456,602.
- Investigators traced alleged proceeds to two wallets and seized funds.
- Ownership claims must be resolved before assets can return to victims.
Prosecutors Pursue Funds Traced to Romance Fraud
The U.S. Attorney’s Office for the District of Massachusetts said Nov. 9 that it had filed a civil forfeiture action targeting 456,602 USDT, valued at approximately $456,602. Its romance fraud forfeiture action involved alleged schemes targeting people in Massachusetts and elsewhere. Authorities had traced the proceeds to two cryptocurrency wallets and seized the funds.
According to the complaint, perpetrators cultivated trust through online dating sites and Facebook before encouraging cryptocurrency investments on fake platforms. The office stated:
“Although victims believed they were sending funds to a legitimate cryptocurrency investment platform and earning profits, in reality those funds were sent to unhosted cryptocurrency wallets (wallets not hosted on a cryptocurrency exchange).”
Victims realized they had been scammed when withdrawal attempts failed, even after they paid purported fees and taxes.
Fraudulent Platforms Encourage Larger Deposits
The FBI describes cryptocurrency investment fraud as a process that can begin with a romance or confidence scam before shifting to investment pitches. Fraudulent platforms may display fictitious gains or permit early withdrawals to encourage larger deposits. Subsequent demands for taxes or fees provide another means of extracting money from victims.
Impersonation also features in fake cryptocurrency exchanges and unsolicited investment offers. Fraudulent services may copy legitimate websites, while unsolicited contacts promise investment returns. These approaches rely on an appearance of credibility to persuade people to transfer assets.
Separate federal investigations have targeted larger sums through similar forfeiture proceedings. Five complaints announced in July sought more than $25 million in seized cryptocurrency. The largest involved approximately $12.1 million connected to romance scams affecting more than 200 victims; another targeted about $10.4 million linked to fraudulent investment platforms.
Ownership Claims Precede Returns to Victims
Massachusetts prosecutors also pursued a separate crypto ATM fraud forfeiture action announced July 31. That case sought approximately $47,000 allegedly taken through technology-support and government-impersonation schemes. Investigators identified five victims whose payments reached the same wallet.
Cross-border recovery efforts have likewise required further steps after seizure. Ghanaian and British authorities seized $15.1 million linked to an investment scam, as described in June. The assets were liquidated into an exhibit account managed by Ghanaian authorities. Authorities were screening victims ahead of planned restitution, or repayment for losses.
In the Nov. 9 case, the complaint’s claims remained allegations. Civil forfeiture allows third-parties, meaning others asserting ownership of the assets, to present claims that must be resolved before forfeiture and any return to victims.
