The U.S. Department of Justice has initiated a civil forfeiture action targeting $848,247 in Tether (USDT), suspected to be proceeds from elaborate confidence scams that defrauded victims across several states. The funds, laundered through a complex network of cryptocurrency wallets, are believed to be tied to schemes operating between September 2022 and February 2025.
The civil complaint was filed in the District of Columbia, as announced by U.S. Attorney Jeanine Ferris Pirro, with support from Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division and FBI Special Agent in Charge David K. Porter from the Honolulu Field Office.
Confidence Scams with a Personal Touch
The investigation for these confidence scams, led by the FBI Honolulu Division Cyber Squad, began in late 2022 when a victim in Hawaii reported a loss of $1.3 million to the LME Crypto Group. This group falsely claimed to be affiliated with the London Metal Exchange while running a cryptocurrency investment fraud that exploited online relationships to lure victims into depositing money on fraudulent trading platforms.
One victim in the District of Columbia reported a loss of $30,000 in December 2023 through the FBI’s Internet Crime Complaint Center (IC3). The individual believed they were making a legitimate investment that would generate “big profits in a short amount of time” and deposited funds via a platform called “LME.” Like others, they were misled into believing the investment was both legitimate and lucrative, until access to their funds was cut off.
The confidence scams detailed in the complaint often begin with simple, misdirected text messages. These messages are used to initiate contact with victims, who are then manipulated over time via dating apps, social networking platforms, or professional investment groups. Scammers typically cultivate trust and recommend fake investment opportunities, boasting their own (fabricated) financial success.
Fake Platforms, Real Losses
A common scam pattern involves directing victims to websites that closely mimic legitimate trading platforms. Scammers assist victims in opening cryptocurrency exchange accounts, often U.S.-based, and help them transfer funds, eventually funneling all assets into wallets under the scammer’s control. Early in the process, victims are sometimes allowed to withdraw a small portion of supposed “profits” to build credibility. Eventually, however, all access is cut off, and victims are locked out permanently.
These fraudulent platforms can look authentic and display fake dashboards showing inflated returns, all designed to encourage further investment. But beneath the surface, all activity routes to addresses are fully controlled by the perpetrators. In the end, victims are left with nothing.
In 2024 alone, the FBI’s IC3 received reports of approximately $5.8 billion in losses linked to cryptocurrency investment fraud.
Government Action and Ongoing Investigation
The Justice Department acknowledged the support of Tether, the issuer of the USDT cryptocurrency, in assisting with the asset seizure. Additional assistance came from the Department’s Office of International Affairs and the FBI’s Virtual Asset Unit for confronting these confidence scams.
The case is being prosecuted by Assistant U.S. Attorneys Kevin Rosenberg and Rick Blaylock Jr. from the District of Columbia, in collaboration with Trial Attorneys Stefanie Schwartz, Ethan Cantor, and Gaelin Bernstein from the Computer Crime and Intellectual Property Section, and Daniel Zytnick from the Consumer Protection Branch of the Justice Department.
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