NY Attorney General Freezes $2.2M in Cryptocurrency from Job Scam Operation

TLDR

• NY Attorney General Letitia James froze $2.2 million in cryptocurrency and filed a lawsuit targeting job scam operators
• Scammers used fake remote work opportunities to convince victims to purchase cryptocurrency under false pretenses
• Victims were instructed to buy USDC and USDT through legitimate platforms like Coinbase and Crypto.com
• Scammers demanded additional fake fees for “credit score improvement” and “blockchain verification”
• Authorities successfully traced and froze the stolen funds with cooperation from Tether Limited and through search warrants

The Office of New York Attorney General Letitia James has taken action against a sophisticated cryptocurrency scam that targeted job seekers, freezing $2.2 million in stolen digital assets and filing a lawsuit to recover funds for victims. The operation, which primarily targeted individuals searching for remote work opportunities, used text messages to lure victims with promises of flexible hours and high pay.

The scammers initiated their scheme by sending unsolicited text messages advertising remote work positions. These messages promised attractive compensation packages and flexible working conditions, catching the attention of job seekers who were then drawn into an elaborate fraud scheme.

At the core of the operation was a requirement for victims to purchase cryptocurrency as part of their supposed job duties. The scammers claimed that participants would earn commissions by reviewing products to generate market data, presenting the opportunity as a legitimate market research position.

Victims were instructed to create accounts on well-known cryptocurrency platforms, including Coinbase and Crypto.com. They were then directed to purchase specific types of cryptocurrency, primarily stablecoins such as USDC and USDT, which are digital assets designed to maintain a stable value.

The fraudsters assured victims that their cryptocurrency purchases were necessary to “legitimize” the data they would be generating through their work. They promised that all deposited funds would be fully refunded, along with additional commission payments for completed work.

To make their operation appear legitimate, the scammers created sophisticated fake websites that mimicked real companies. These fraudulent sites helped convince victims of the authenticity of the job offers and the overall operation.

Once victims transferred their cryptocurrency to unhosted wallets controlled by the scammers, the true nature of the scheme became apparent. The digital assets, once transferred, became virtually impossible to trace through conventional means.

When victims attempted to withdraw their funds or collect their promised earnings, the scammers introduced additional fraudulent fees. These included charges for “credit score improvement” and “blockchain verification,” which led to even greater losses for the victims.

The scale of individual losses was substantial. In one documented case, a New York resident lost more than $100,000 to the scammers through multiple cryptocurrency transfers and fraudulent fee payments.

The investigation into the scam involved collaboration between multiple law enforcement agencies. The Attorney General’s Office worked closely with the U.S. Secret Service and the Queens County District Attorney’s Office to trace the movement of stolen funds through various cryptocurrency wallets.

Queens District Attorney Melinda Katz’s Cryptocurrency Unit played a crucial role in the investigation, successfully identifying and tracking over $2 million in stolen cryptocurrency. The unit was able to locate the specific digital wallets where the fraudulently obtained coins were being stored.

The recovery effort received cooperation from key players in the cryptocurrency industry. Tether Limited, the company behind the USDT stablecoin, voluntarily agreed to freeze stolen USDT tokens identified in the investigation.

The Queens County District Attorney’s Office secured a search warrant to freeze the USDC tokens that were stolen during the scam. This legal action ensured that the funds remained secure and potentially recoverable for victims.

The lawsuit filed by Attorney General James seeks multiple forms of relief for victims. Beyond the recovery of stolen funds, the legal action aims to secure penalties, restitution, and damages from the scammers.

The frozen cryptocurrency assets are now available for potential recovery and return to victims, pending court approval. The legal process will determine the specific mechanism for returning funds to affected individuals.