US authorities have frozen $8.2 million in code, seized by fraud victims from three fraud addresses, and are doing work that includes a fake investment scheme.
The scam involved sending messages to random phone numbers pretending to have the wrong number. From there, the scammer becomes friends with the recipient, gains trust, and ultimately convinces them to invest in crypto fraud.
The FBI has identified 33 people who were snaked by the scam. Five more losses are still identified as $6 million, according to a February 28 statement from the Ohio District Attorney’s Office.
The FBI has identified 33 people snagged in the scam, with five more still being identified. Source: US Department of Justice
Investigators conducted a blockchain analysis after the victim filed a complaint with the FBI’s Internet Crime Complaint Center in June and discovered that some of the stolen funds had been converted to tethers (USDTs) and transferred to three cryptocurrency addresses.
After authorities executed a federal attack warrant, Tether freezes the funds and transfers them to a law-enforcement wallet.
On February 27th, filed in Ohio District Court, US lawyers from Carroll Skutnik, Ohio and US lawyers from James Morford, U.S. lawyers from James Morford, are seeking the court for all funds for the three speeches confiscated so that they can be returned to the victims.
The pair said the accounts “contain additional funds than the victim’s traceable losses.” He said this was used in money laundering and wire fraud, totaling $8.2 million.
How fraud works
Skutnik and Morford said the scammers contacted the victims through seemingly harmless, misdirected or “wrong numbers” messages.
“The con artists then used a variety of manipulation tactics to gain the trust and affection of the victim. Once trust is established with the victim, the con artists will share how successful they and those they know have been in investing in cryptocurrency,” Skutnik and Morford said.
“This personal testimony has had an intended effect of reducing the uncertainty the victims may have about cryptocurrencies and ultimately convincing them to advance their investment.”
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The scammers are said to have led the victims by opening legitimate crypto exchange accounts and transferring funds to fake sites managed by the scammers. The site promised favorable returns and encouraged further investment.
In one instance, authorities claim that Ohio women were tricked into sending more money to scammers, and that they would need to make additional payments to free up the initial funds.
After losing $663,000 in life savings, she couldn’t send any more funds, and the con man is said to have threatened harm to friends and family unless she sends more money.
Blockchain Analytics Firm Chainalysy reported in a Crypto Scam Revenue 2024 report on February 13 that generated AI is more scalable and affordable, potentially causing record losses throughout 2025.
Meanwhile, Onchain security company Cyvers says Pig Butchering Scams is one of the most important threats for crypto investors, with billions of losses in 2024 in 200,000 identified cases.
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