The Brooklyn District Attorney’s office has successfully dismantled the digital framework of a cross-border cryptocurrency scam operation that stole tens of millions of dollars from Russian-speaking individuals throughout the United States.
Collaborating with the FBI, law enforcement agents carried out search warrants spanning three time zones within a few hours. They seized or disrupted 241 fraudulent domains alongside more than 100 cloud servers managed by companies in Eastern Europe and America. A statement released Wednesday noted that these servers stored the operating software, website content, and victim databases utilized by the fraudsters.
“Our groundbreaking Virtual Currency Unit identified the fraud, tracked the stolen cryptocurrency, broke new ground by uncovering the infrastructure behind the operation, and worked with the FBI to dismantle it,” Brooklyn District Attorney Eric Gonzalez stated.
“By disrupting more than 100 servers and hundreds of fraudulent websites, we have struck at the heart of this criminal enterprise and made it far harder for these scammers to victimize others. I commend our investigators and thank the FBI for their partnership in this extraordinary operation.”
The fraudulent scheme operated by enticing targets through Russian-language investment advertisements on Facebook. Subsequently, a Russian-speaking representative would phone the victim, guiding them step-by-step through setting up an account on a counterfeit crypto exchange and purchasing digital assets.
After several weeks or months, victims attempting to withdraw their funds found themselves locked out or confronted with fictitious “taxes” and “fees.”
Several individuals lost their entire life savings. The perpetrators subsequently targeted them again, reaching out weeks later while masquerading as recovery agents who offered to reclaim the lost funds.
Although the investigative unit had previously blocked 400 scam domains, replacement sites continuously emerged. Targeting the underlying servers directly hinders the scammers’ capability to rapidly deploy new websites or re-engage previous victims.
Thus far, the three-year inquiry has successfully recovered approximately $300,000, with prosecutors indicating ongoing efforts to retrieve additional funds.
Frequently Asked Questions
How did the Brooklyn DA dismantle the crypto scam network?
Working with the FBI, investigators executed search warrants across three time zones and seized or disrupted 241 scam domains and over 100 cloud servers.
How did the cryptocurrency scam operate?
Victims were lured via Russian-language Facebook ads, guided by a Russian-speaking advisor to open accounts on fake platforms, and later locked out or hit with bogus fees when trying to withdraw funds.
How much money has been recovered?
The three-year investigation has recovered about $300,000 so far, and prosecutors are working to claw back more.
