Cleveland, Ohio – The United States Attorney’s Office for the Northern District of Ohio has filed a civil forfeiture complaint against 8,207,578 Tether (USDT) cryptocurrency, valued at over $8.2 million. The funds were seized by federal authorities after an FBI-led investigation uncovered a massive cryptocurrency investment fraud scheme that defrauded victims across the United States.
Investment Fraud Scheme Targeted Victims Nationwide
According to court documents, the FBI identified 33 victims who collectively lost approximately $4.9 million through an elaborate cryptocurrency scam. Investigators also discovered five additional accounts that were affected, bringing the total estimated losses to over $6 million. Among the victims was a woman from Lake County, Ohio, who lost her entire life savings of $663,352, including funds from her Roth IRA.
The scheme began with fraudsters sending seemingly misdirected text messages to potential victims. Once the victims responded, the scammers gained their trust by forming a connection over shared interests such as hobbies and religion. Once trust was established, the scammer introduced the idea of cryptocurrency investments, claiming they had personally seen great success or knew someone who had.
Victims Manipulated Into Sending Funds to Fake Investment Platforms
Once the victim was convinced, the scammer guided them step-by-step to open an account on legitimate cryptocurrency exchanges, such as Crypto.com or Coinbase. Victims were instructed to transfer money from their bank accounts into their newly created cryptocurrency wallets.
The scammers then directed victims to transfer their funds to an “investment platform,” which was in reality a fraudulent website designed to look like a legitimate trading platform.
Initially, victims were sometimes allowed to withdraw a small portion of their so-called profits, further reinforcing their belief that the investment was real. However, as the scheme progressed, victims lost access to their funds and were given excuses for why they could no longer make withdrawals.
One common tactic involved the fraudsters inventing a fake tax requirement, claiming that victims had to pay taxes on their “earnings” before being allowed to withdraw funds. In many cases, victims continued depositing more money in an attempt to regain access to their funds.
A Lake County Woman’s Ordeal
A Lake County, Ohio woman became a target of this scam in November 2023, after responding to a text message from an unknown number. Over time, she formed a relationship with the scammer, trusting him enough to follow his investment advice.
She opened an account on Crypto.com, transferred her savings into cryptocurrency, and eventually sent her funds to the fraudulent investment platform. When she attempted to withdraw money, the scammer demanded additional payments. Once she had no money left, the scammer turned to threats, stating he would send his “friends” to harm her loved ones.
Realizing she had lost everything, she reported the scam to the FBI’s Internet Crime Complaint Center in June 2024.
FBI Investigation Leads to Major Cryptocurrency Seizure
Following the woman’s complaint, the FBI Cleveland Division launched an in-depth investigation into the scheme. Using blockchain analysis, investigators traced stolen victim funds that had been converted into USDT cryptocurrency and deposited into three digital wallets.
In November 2024, law enforcement officers executed a federal seizure warrant, recovering 8,207,578 USDT tokens. Tether Limited, the issuer of USDT, then transferred these funds into a law enforcement-controlled virtual wallet.
Government Seeks to Return Seized Funds to Victims
On February 27, 2025, the United States Attorney’s Office for the Northern District of Ohio filed a Complaint in Forfeiture, seeking to permanently seize the entire $8.2 million in cryptocurrency.
The complaint alleges that the seized funds were linked to fraud and money laundering violations, making them subject to forfeiture. However, federal authorities must first prove these allegations in court before redistributing the funds to the victims.
If successful, the United States government will work to return the forfeited cryptocurrency to the victims who suffered substantial financial losses in the scam.
Authorities Urge Caution Against Cryptocurrency Scams
Law enforcement officials warn the public to be cautious of cryptocurrency scams and advise individuals to verify any investment opportunities before sending money.
Victims of cryptocurrency fraud are encouraged to report their cases to the FBI’s Internet Crime Complaint Center to aid in ongoing investigations and future recoveries.
