United States Files Forfeiture Action to Recover Crypto Proceeds Traceable to Cyber Fraud Scheme

BOSTON – The United States Attorney’s Office filed a civil forfeiture action to recover cryptocurrency alleged to be proceeds of a business email compromise (BEC) fraud scheme targeting a Massachusetts business. 

The government seeks to forfeit cryptocurrency seized from seven accounts located at Binance, a cryptocurrency exchange and custodian. The seized cryptocurrency included bitcoin (BTC), Tether (USDT), APE (APEcoin), JASMY (an Ethereum token), OGN (Origin Protocol), SHIB (Shiba Inu), XEC (eCash), TLM and BNB (Binance coin).

In March 2022, a federal investigation began into a BEC scheme targeting a Massachusetts business that was allegedly tricked, through a fraudulent email, into wiring $898,342 from its Massachusetts bank account to a bank account opened in California. From that transfer, proceeds were traced to another bank account and then to a cryptocurrency exchange where the funds were converted to bitcoin. From there, the funds, in the form of cryptocurrency, were transferred through a series of intermediary cryptocurrency addresses, in a manner consistent with tactics employed in money laundering transactions. Ultimately, some of the funds were traced to accounts located at Binance, where they, or things of equivalent value, were seized in August and September 2022.  

It is a violation of federal law to use wire communications as part of a scheme to defraud or to obtain money or property by means of false or fraudulent pretenses. The complaint alleges that the seized currency was both proceeds of the wire fraud and/or property involved in money laundering. 

A civil forfeiture action allows third parties to assert claims to property, which must be resolved before the property can be forfeited to the United States and returned to victims.

Members of the public who believe they are victims of a cybercrime – including cryptocurrency scams, romance scams, investment scams, and BEC fraud scams – should contact USAMA.CyberTip@usdoj.gov. 

Acting United States Attorney Joshua S. Levy and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division made the announcement today. The civil forfeiture action is being prosecuted by Assistant U.S. Attorney Carol E. Head, Chief of Levy’s Asset Recovery Unit. 

The details contained in the civil forfeiture complaint are allegations. The United States Attorney’s Office has not filed a corresponding criminal action on the matter.