Brooklyn prosecutors and the Federal Bureau of Investigation have dismantled a major international cryptocurrency fraud operation that targeted Russian-speaking Americans, including residents of the New York borough.
The Brooklyn District Attorney's Virtual Currency Unit shut down approximately 241 fraudulent websites and 112 servers as part of the investigation. Brooklyn District Attorney Eric Gonzalez characterized the operation as one of the largest cyber enforcement actions ever carried out by a local prosecutor's office.
How the Scam Operated
The criminals stole tens of millions of dollars from victims through an elaborate investment scheme. Weeks after taking initial funds, the scammers contacted victims a second time with a recovery scam—falsely claiming they could help retrieve the stolen cryptocurrency.
This two-stage approach allowed criminals to exploit victims' desperation to recover their losses by making false promises of asset recovery.
Prosecution Statement
"When scammers halfway around the world target Brooklyn residents, they should know they are not beyond our reach," Gonzalez said. "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."
James C. Barnacle, assistant director in charge of the FBI's New York field office, emphasized the value of law enforcement collaboration: "Our partners at Kings County District Attorney's Office were swift to involve our subject matter experts and together we got to the bottom of the plot."
