U.S. Gov Files Interpleader Suit Over $380K Linked to Alleged Crypto Scam

News | May 23, 2024 By:

On Wednesday, May 8, 2024, the United States government filed a complaint in interpleader action in the Southern District of California involving over $380,000 in disputed funds related to an alleged cryptocurrency investment scam.

The complaint was filed by the United States Attorney’s Office on behalf of the government. It states that in November 2023, the FBI seized $381,510.42 from a Bank of America account after victims reported losing money in what investigators believe was a fraudulent cryptocurrency trading scheme. The funds were then deposited into an interest-bearing account controlled by the U.S. Marshals Service.

The account in question belonged to R&hb Life LLC, a California company, and was opened in March 2023 with an initial deposit of $100. Over the next few months, according to bank records cited in the complaint, the account saw large sums deposited that are believed to have originated from victims of the suspected fraud. Two victims, Kathleen April, and James Becker, are said to have transferred $402,130 and $54,673 respectively to the account in August and September.

A total of 50 individuals and entities are now named as defendants in the interpleader case, all of whom claim or are believed to claim an ownership right to portions or all of the seized funds. This includes R&hb Life LLC and its sole owner Li Su, who reportedly filed claims to the money. Other defendants consist of additional alleged victims who lost funds in the cryptocurrency scheme, as well as some recipients of transfers from the disputed account.

The filing states that with so many parties asserting competing claims on the monies, the U.S. government is unable to determine the rightful ownership. It is asking the court to order the deposited funds be given to the court registry while the various claims are adjudicated between the defendants. The government stresses it has no beneficial interest in the case and is acting in good faith to resolve the ownership dispute.

The interpleader action is the latest development involving an ongoing FBI investigation into what authorities suspect to have been an international cryptocurrency pyramid or Ponzi scheme. As investigations of similar fraud cases have shown, determining ownership can be challenging when involving digital currencies and obscured transaction trails on public blockchain ledgers.

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