US Files Forfeiture For $7.1M In Crypto From Investment Scam
The US is looking to nab $7.1 million worth of crypto seized by Homeland Security in December tied to an allegedly fraudulent oil and gas investment scheme.
The Seattle US Attorney’s Office said on Tuesday that it filed a civil action to seek the forfeiture of some of the $97 million taken in by the alleged scheme that ran between June 2022 and July 2024.
“The co-schemers in this fraud moved their ill-gotten gain through various cryptocurrency accounts to try to launder the money stolen from victims,” Acting US Attorney for Seattle Teal Luthy Miller said.
Miller’s office said that the crypto accounts it is seeking forfeiture over belong to individuals residing in Russia and Nigeria who used victims’ funds to buy crypto and sent a portion of those funds to exchanges in their home countries.
One indicted for role in alleged scheme
At least one individual has allegedly facilitated money laundering for transnational criminal organizations.
Geoffrey Auyeung was indicted in August 2024 after being charged with receiving the lion’s share of the funds from the fraudulent investment scheme.
Auyeung was accused of buying Bitcoin (BTC), Tether (USDT), USDC (USDC) and Ether (ETH) with the allegedly stolen funds and would send the majority of the crypto to crypto exchange Binance.
US authorities seized almost $2.3 million from his bank accounts at the time of his arrest.
The Justice Department claimed that investors were lured under the guise of profiting via an investment scheme that would purchase oil tank storage facilities, with the intent to rent them out to others to make substantial gains.
However, once the victims sent their money, the prosecutors alleged those involved in the scheme would simply stop responding.
Prosecutors claimed to have identified victims who were defrauded of $17.9 million, and expect more to stake their claim after they have been identified and verified that they were victims of the alleged scam.
Should the court approve the $7.1 million forfeiture request, the reclaimed funds would stand at $9.4 million, which would be distributed to any alleged victims.
Related: Crypto scammer gets 12 years after reneging on restitution deal
Recent regulatory crackdown
In recent weeks, regulators have cracked down on malicious actors in the crypto space.
Earlier this month, US prosecutors charged two men who were the promoters of OmegaPro, who allegedly defrauded investors of $650 million. If they are found guilty, they could face up to 40 years in prison.
On Friday, former rugby player Shane Donovan Moore was sentenced to two-and-a-half years in a US federal prison for operating a $900,000 Ponzi scheme that duped more than 40 investors.
On Thursday, Hong Kong police arrested four individuals who defrauded investors of 3 million Hong Kong dollars ($382,000). However, the alleged mastermind behind the operation managed to flee abroad.
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