The US Attorney’s Office has taken steps towards reclaiming cryptocurrency proceeds associated with a Business Email Compromise (BEC) fraud scheme via a civil forfeiture action, as per a press release. This scheme specifically targeted a Massachusetts-based company. The government’s efforts are concentrated on seizing cryptocurrency assets from seven accounts held at Binance, a popular cryptocurrency exchange. The US has witnessed a noticeable surge in crypto-related phishing scams, which have become national concerns for individuals, businesses, and law enforcement agencies.
Another alarming trend has emerged – pig butchering schemes. These primarily target individuals or businesses involved in the livestock industry, particularly pig farming. The BEC fraud scheme came to light in March 2022 when investigators identified it as part of an elaborate phishing scam that targeted the Massachusetts company, which ended up transferring a sum of almost $900,000 to a bank account in California.
The government’s ongoing efforts aim to seize and forfeit cryptocurrency confiscated from several accounts held at Binance, including a wide range of digital assets such as Bitcoin (BTC), Tether (USDT), APE (ApeCoin), JASMY (an ERC-20 token), OGN (Origin Protocol), SHIB (Shiba Inu), XEC (eCash), TLM, and BNB (Binance coin). The fraudulent activities employed effective tactics, tricking the company into transferring the sum into another account from their local bank account, before being converted to Bitcoin on a cryptocurrency exchange.
While subsequently transferred through various crypto addresses, these funds conformed with techniques typically seen in money laundering transactions, disclosed in the press release. Eventually, a fraction of the funds went to Binance, a leading cryptocurrency exchange. However, authorities successfully seized these funds from Binance in August and September 2022. The funds were routed through several intermediary wallet addresses, which aimed to obscure the trail of the funds, making it challenging for investigators to determine their origin and destination. Consequently, engaging in wire communications to perpetrate a fraudulent scheme that seeks to obtain money or property violates federal law.
The US Attorney’s Office’s complaint strongly asserts that the seized cryptocurrency represents the ill-gotten profits from wire fraud and serves as evidence of trade involved in money laundering. This emphasizes the gravity of the charges against those engaged in the fraud scheme, and they will face legal consequences for their actions. As part of a civil forfeiture action, the third-party property claims must be examined and resolved before the property can be forfeited to the US and returned to the victims.
It is interesting to note that the article does not mention the source of the bitcoin, even though it was seized, nor the perpetrators of the fraud. Nonetheless, this article serves as an important reminder that individuals and businesses must remain vigilant and cautious about digital assets’ security in the face of increasing cases related to cryptocurrency phishing scams.