US District Court Orders Forfeiture of 1.36M Tether and $3.85M in US Currency in Connection to International Crypto Investment Scam

On Wednesday, February 7, 2024, the United States District Court for the Northern District of California issued a default judgment in the case of United States v. Approximately 1,360,000.748 Tether and $3,859,703.65 in U.S. Currency.

The default judgment ordered the forfeiture of over 1.36 million units of the cryptocurrency Tether (USDT), as well as $3.86 million in U.S. currency. According to a verified complaint filed by federal prosecutors in August 2023, these funds are alleged to be proceeds traceable to an international cryptocurrency investment scam.

The complaint describes “pig butchering,” which often begins with a scammer sending a victim a purportedly misdialed message, but recent cases have included real estate-related connections. The scheme originating in China targeted a 61-year-old victim from San Francisco through a real estate networking platform. An individual claiming to be an expert in cryptocurrency investing manipulated the victim into investing millions in a sham exchange called NYMEX. According to the complaint, sixteen total transactions were made to NYMEX between August and December 2022, totaling over $5.5 million.

Prosecutors allege the funds passed through over a dozen intermediary cryptocurrency wallets before arriving at the target account on the cryptocurrency exchange Kraken. Federal agents were able to trace the flow of funds on the blockchain from the initial investments to the ultimate recipient wallet. The complaint notes the transfers occurred across different cryptocurrencies including DAI, USDC, and USDT, with no apparent business purpose other than to obscure the money trail.

The default judgment indicates no claimants came forward to dispute the forfeiture and prove innocent ownership of the funds within the required time period after the complaint was filed last summer. As a result, the court granted the government’s request to forfeit the defendant’s properties.

Please contact BlockTribune for access to a copy of this filing.