U.S. Government Seeks Forfeiture of Bitcoin Linked to Wire Fraud
On Friday, May 30, 2025, the United States government filed a memo in the U.S. District Court for the Middle District of Louisiana in support of its motion for default judgment and forfeiture regarding approximately 0.21385315 Bitcoin held in a cryptocurrency wallet associated with Shahdab Sayeed. The case centers on claims that the funds are linked to a wire fraud scheme.
The memo outlines the procedural history, indicating that a verified complaint for forfeiture was filed on February 4, 2025. The government alleged that the Bitcoin in question was transferred to a wallet at Noones Cryptocurrency Exchange, located in Panama, after being taken from a victim, K.L., who reported falling victim to a fraudulent scheme.
Following K.L.’s report, the East Baton Rouge Sheriff’s Office (EBRSO) investigated and discovered that the victim’s funds had been moved to the Noones wallet. EBRSO Sergeant K. McKnight alerted Noones about the suspected fraudulent activity, leading the exchange to voluntarily freeze Sayeed’s wallet. This freeze remained in place while the government sought a seizure warrant, which was executed in January 2025.
The memo states that on November 5, 2024, after the wallet was frozen, the United States reached out to Sayeed via email to inform him of the situation. Sayeed responded the following day, asserting that he had not engaged in any illegal transactions. From late November 2024 to late January 2025, he sent several emails inquiring about his frozen assets.
On February 7, 2025, the government sent direct notice to Sayeed regarding the forfeiture action, as he was the only known potential claimant. This communication included a formal notice letter and required Sayeed to file a claim by March 17, 2025. The government also published notice of the forfeiture action on an official government website for thirty consecutive days, from February 5 to March 6, 2025.
Despite these notifications, the memo notes that no claims were filed by Sayeed or any other party by the April 6, 2025, deadline. On April 14, 2025, the United States extended the claim deadline to April 28, 2025, yet still received no responses.
As a result, on May 13, 2025, the government filed a motion for the Clerk’s Entry of Default, which was granted on May 15, 2025. The memo argues that default judgment is justified, highlighting that no material facts are in dispute since there were no claims filed against the defendant property.
The government asserts that the verified complaint sufficiently demonstrates that the Bitcoin is proceeds from a wire fraud offense and thus subject to forfeiture under 18 U.S.C. § 981(a)(1)(C). The memo concludes with a request for a final order of forfeiture, transferring all interest in the Bitcoin to the United States government, following the established legal procedures.
Please contact BlockTribune for access to a copy of this filing.
