2024-04-07
The Brooklyn District Attorney's Office, under the leadership of Eric Gonzalez, has successfully dismantled a complex cryptocurrency scam that defrauded people across the United States of millions of dollars.
Known as the "pig butchering" scheme, this deceptive operation involved scammers befriending unsuspecting victims online and enticing them to invest in cryptocurrencies through fraudulent websites and apps. Once the victims had invested, the scammers blocked their access to withdraw funds, resulting in substantial financial losses.
Gonzalez expressed deep concern about the growing prevalence of such scams, which extend well beyond the boundaries of Brooklyn. Similar schemes cause billions of dollars in losses each year, impacting residents nationwide.
Highlighting the importance of public awareness and education, Gonzalez emphasized the need for skepticism when presented with enticing cryptocurrency investment opportunities in order to combat these widespread scams.
The investigation, led by the Virtual Currency Unit within the District Attorney's office, originated from multiple complaints, including a case involving a 51-year-old woman who fell victim to a similar scam and lost $22,680 in March 2023.
The woman was enticed to invest through crypto investment chat groups, which resulted in significant deposits and false promises of high returns. However, when she tried to withdraw her funds, she faced obstacles and ultimately lost her entire investment.
Gonzalez warned that investment returns that seem too good to be true are usually fraudulent. He urged everyone to exercise extreme caution when dealing with individuals they have not met in person, especially when presented with seemingly lucrative cryptocurrency investment opportunities.
Through a comprehensive analysis of crypto transactions, Gonzalez's team uncovered the intricate nature of the scam. They discovered a network of domains and servers connected to the fraudulent operation.
The investigation also revealed multiple victims from various states, underscoring the widespread impact of these scams.
Furthermore, investigators identified over 80 domains associated with the scam, with the website coinformat.com at its core. Through forensic analysis, the District Attorney's office identified malicious mobile apps linked to the scam, capable of extracting sensitive user information without detection.
Additionally, the District Attorney highlighted the international nature of these cryptocurrency fraud schemes, often facilitated by victims of human trafficking in Southeast Asia. These global operations present challenges for localized prosecution and the recovery of assets.
In response, Gonzalez's office seized coinformat.com and 20 related domains, as well as three virtual servers hosting these deceptive sites.
The office also launched an extensive public awareness campaign, specifically targeting vulnerable communities such as the Chinese and Russian populations in Brooklyn. The goal is to educate residents about the warning signs and preventive measures against cryptocurrency scams.
Gonzalez urged individuals to be cautious of red flags that may indicate potential crypto scams, such as unsolicited texts promoting lucrative investments, invitations to join investment groups on messaging platforms, and coercive tactics to download unverified investment apps.
He advised everyone to conduct thorough research and verification of the legitimacy of companies, refrain from sharing personal information, and avoid making investments solely based on online recommendations.
