The Ohio U.S. Lawyer's office aims to confiscate millions of people with codes seized from fraudulent businesses and turn them back to victims who have been fooled by fake investments.
According to a recent statement, authorities have asked the court to formally seize about $8.2 million in USDT held in three cryptocurrency wallets. The assets in question include funds that are directly linked to the victim's loss.
The funds were seized from fraudsters who carried out fake crypto investment schemes by tricking victims through “wrong numbers” text messages and fraudulent trading platforms. At least 33 people across the country lost a total of $4.9 million, while five more casualties still unknown and another $1 million.
The scam starts when a scammer sends a “wrong number” text to random people on their mobile phones and launches a conversation with a dating application and a meetup group of experts. They then try to be friends with the victim and then slowly engulf them in suspicious crypto investments. This is a tactic usually called pig slaughter.
Victims will be guided in stages on how to open legitimate accounts on platforms such as Crypto.com and Coinbase. Once funding is provided to your account, the scammers will convince you to move your money to what appears to be a professional investment site, a malicious platform that is actually controlled by the scammers.
In particular, some victims were even allowed to withdraw small quantities early on to make the scheme appear real. Eventually, their funds were completely blocked and when they tried to cash out, the scammers requested additional payments in the name of the tax requirements.
“Learning that fraud would soon carry out the course, the fraudsters used a final ditch effort to lie to the victims that they had to pay taxes. In the end, the victims were locked out of their accounts on the investment platform and lost their funds,” the authorities said.
One victim, a woman from Lake County, Ohio, reportedly lost her entire life expectancy of $663,000, including funds from her Ross IRA. She reported the fraud to the FBI's Internet Crime Complaint Center in June 2024, prompting an investigation.
Following blockchain analysis, authorities traced the stolen code into three wallets. The FBI executed a seizure warrant and with Tether's assistance, the funds were frozen and transferred to law enforcement management wallets.
In the February 27 confiscation complaint, U.S. Attorney Carol Skutznik and U.S. Attorney James Morford asked the court to formally seize the recovered code, adding that the account contained additional funds beyond what the victim lost.
As previously reported by crypto.news, pig slaughter fraud accounted for 33.2% of fraud-related code inflows in 2024. According to chain analysis, sediment to these scams skyrocketed 210% year-on-year.
