Brooklyn DA and FBI Shut Down 241 Crypto Scam Websites and 112 Servers
Brooklyn prosecutors and the Federal Bureau of Investigation (FBI) have dismantled a large international cryptocurrency fraud operation, shutting down approximately 241 fraudulent websites and 112 servers used to support the scheme. The investigation uncovered a network that stole millions of dollars from Russian-speaking victims before attempting to defraud them again through fake cryptocurrency recovery services.
The Brooklyn District Attorney's Virtual Currency Unit (VCU) led the investigation with assistance from the FBI. In a press release, the district attorney's office described the operation as one of the largest cyber enforcement actions ever conducted by a local prosecutor's office.
Brooklyn District Attorney Eric Gonzalez said the operation targeted criminals operating internationally who believed they could evade law enforcement while targeting residents of Brooklyn.
"When scammers halfway around the world target Brooklyn residents, they should know they are not beyond our reach," Gonzalez said. He added that the perpetrators had stolen many millions of dollars from Russian-speaking victims through an elaborate investment scheme and subsequently attempted to exploit them again with false promises of recovering the stolen funds.
Investigators Disrupt Cryptocurrency Fraud Infrastructure
According to Gonzalez, the VCU played a central role in identifying the fraudulent operation, tracing cryptocurrency linked to the thefts and uncovering the technological infrastructure that supported the criminal activity.
Investigators then worked with the FBI to dismantle the network, taking more than 100 servers and hundreds of fraudulent websites out of operation. The Brooklyn DA's office reported that the action was intended to disrupt the operation's ability to continue targeting potential victims.
"By disrupting more than 100 servers and hundreds of fraudulent websites, we have struck at the heart of this criminal enterprise and made it far harder for these scammers to victimize others," Gonzalez said.
The enforcement action highlights the role of cooperation between local prosecutors and federal investigators in pursuing cryptocurrency-related crimes that operate across international borders.
Crypto Theft Victims Targeted by Recovery Scams
Investigators also uncovered a second stage of the fraud in which criminals contacted victims weeks after the initial cryptocurrency theft. The perpetrators allegedly offered to help recover the stolen assets, using promises of restitution to target people who had already suffered financial losses.
This practice, known as a recovery scam, involves fraudsters exploiting victims' attempts to retrieve stolen money. Rather than providing legitimate assistance, the criminals use the promise of recovering lost funds as another opportunity to extract money from their targets.
The case follows a separate cryptocurrency-related prosecution handled by the Brooklyn DA's office last year. That case involved a man who stole nearly $16 million from approximately 100 victims by impersonating customer support representatives from cryptocurrency exchanges.
The defendant pleaded guilty and was recently sentenced to up to 12 years in prison, according to the source report. The latest investigation revealed how cryptocurrency fraud can extend beyond the initial theft, with victims facing additional attempts to exploit their financial distress.
FBI Highlights Cooperation Between Law Enforcement Agencies
James C. Barnacle, assistant director in charge of the FBI's New York field office, credited cooperation between law enforcement agencies with helping investigators uncover the scheme and seize more than 100 domains.
"This case is a prime example of what can be done through the power of our partnerships with state, local, and international law enforcement," Barnacle said.
He said the Kings County District Attorney's Office moved quickly to involve FBI specialists, allowing the agencies to work together to investigate the operation and identify its supporting infrastructure.
The dismantling of the websites, servers and domains represents a significant disruption to the identified network. However, the case also underscores the risks facing cryptocurrency investors who are approached by unsolicited services promising to recover stolen assets. Such offers can expose victims to further financial losses, particularly when the individuals making them claim to have special access to lost funds.
data source:news.bitcoin.com
Writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.
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