Brooklyn DA seizes 70 domains in major cryptocurrency scam targeting Russian community

June 7, 2024 Robert Abruzzese, Courthouse Editor
District Attorney Eric Gonzalez announces the seizure of 70 domains linked to a cryptocurrency scam targeting the Russian-speaking community, resulting in more than $5 million in losses for victims nationwide. Eagle file photo by Mary Frost
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District Attorney Eric Gonzalez announced on Thursday that his office has successfully disrupted a cryptocurrency scam operation that targeted the Russian-speaking community through deceptive investment schemes. 

The DA’s Virtual Currency Unit seized 70 domains used to lure victims, resulting in more than $1 million in losses for more than 20 Brooklyn residents and $4 million in losses for additional victims across the United States.

The operation began in October 2023, when the DA’s office started receiving complaints from residents of Russian-speaking communities who reported significant financial losses after investing in what they believed were legitimate cryptocurrency platforms. Victims were targeted through Facebook ads featuring “deepfake” videos of Elon Musk, which promised high returns on investments. 

These ads led victims to bogus websites, where they were contacted by supposed investment advisors speaking Russian, who guided them through the process of purchasing and transferring cryptocurrency.

“My office continues to respond to complaints from Brooklyn residents who fall victim to the growing problem of cryptocurrency scams,” Gonzalez said. “This particular operation targeted members of the Russian community through Facebook advertising by speaking their language, gaining their trust, and convincing them into making investments that were ultimately stolen. 

“We have now severely disrupted this long-running scam and will continue this work on taking fake investment websites offline to protect the public while raising awareness so our neighbors can protect themselves,” Gonzalez continued. 

The investigation revealed that the scammers used a technique known as “Pig Butchering,” where victims were initially allowed to make small withdrawals to build trust before being blocked from accessing their accounts or asked to pay additional fees to recover their investments. The sites are believed to have originated from Russia, making the recovery of stolen funds challenging due to jurisdictional issues.

The seized domains, now redirecting to a warning message from law enforcement, have prevented further victimization. Several individuals who were in the process of transferring more money were alerted to the scam by the DA’s seizure notice.

Victims ranged in age from 35 to 75, with the majority being over 50. The Brooklyn victims were primarily from neighborhoods such as Brighton Beach, Borough Park, Midwood, Sheepshead Bay, Ocean Parkway, Manhattan Beach and Kensington. Individual losses ranged from $18,000 to over $117,000. Additional victims were identified in states including California, Maryland, Washington, Nebraska, Florida, Illinois, South Carolina and Pennsylvania.

The District Attorney’s Office advises the public to be cautious of cryptocurrency scams, which often involve unsolicited messages, group chats on WhatsApp or Telegram, promises of high returns, requests to download apps from unverified sources, communication through messaging apps, and difficulties in withdrawing funds without additional fees. 

To protect against these scams, the DA recommends skepticism of too-good-to-be-true offers, avoiding advice from unknown individuals, verifying company legitimacy, not allowing remote access to computers, and checking if exchanges are licensed in New York State.

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