• Nearly $5 million in USDT linked to a crypto investment fraud scheme was seized.

  • The scam involved creating fake romantic relationships to deceive victims into investing.

  • The FBI successfully traced and recovered some stolen funds, with Tether’s assistance. 

The U.S. Attorney’s office for the Eastern District of North Carolina had seized nearly $5 million in cryptocurrency connected to a complex investment fraud scheme known as “pig butchering.”

The authority announced the recovery of these funds, which were traced to cryptocurrency addresses, allegedly used to launder proceeds from scam victims. The case is being appraised for adapting to the “changing criminal landscape“ and the continued efforts of law enforcement to combat these crimes.

The Fraudulent Scheme

In the “pig butchering” scheme, criminals targeted victims by posing as potential romantic partners. Once they gained the trust of their victims, the scammers introduced them to a fake cryptocurrency trading platform. 

These platforms closely resembled legitimate ones, showcasing fake investment portfolios with exaggerated returns. The victims, lured by the promise of high profits, were encouraged to invest more money. However, when they attempted to withdraw the funds, they were met with various excuses, including demands for additional payments disguised as taxes or penalties.

Impact on Victims

One of the victims lost their entire individual retirement account (IRA) to the scam, a devastating blow that underscores the emotional and financial impact of these fraudulent schemes. After the victims transferred their funds to cryptocurrency wallets controlled by the scammers, the money was quickly moved through multiple wallets to obscure its origins, making recovery efforts more challenging.

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The FBI, with the assistance of Tether, was able to trace and seize the stolen funds despite the criminals’ attempts to hide them. FBI Charlotte Special Agent in Charge Robert M. DeWitt emphasized the importance of adapting to the evolving landscape of cybercrime, stating that this successful seizure shows the FBI’s commitment to protecting victims of such schemes.

U.S. Attorney Michael Easley stated that various efforts are undertaken to recover stolen funds and return them to the victims, even when the perpetrators are abroad.

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