CLEVELAND, Ohio – The United States Attorney’s Office for the Northern District of Ohio (USAO) has filed a civil complaint in forfeiture against 8,207,578 Tether (USDT) cryptocurrency, valued at more than $8.2 million. USDT is a virtual currency which are digital tokens of value circulated over the internet. Its transactions are publicly recorded on what is known as a blockchain.
According to court documents, the FBI has identified 33 victims of an investment fraud scheme across the country, including a victim from Northeast Ohio residing in the city of Mentor. In total, victims lost approximately $4.9 million. Five more accounts have also been found to be affected and the FBI is attempting to identify the respective owners. The victims associated with the additional accounts have lost approximately $1,071,086.
Investigators found that scammers initially contacted the victims through seemingly misdirected, or “wrong number,” text messages. The fraudster then gained the victim’s trust and affection using various manipulative tactics. Once trust was established with the victim, the fraudster would share how much success they, or someone they knew, had with investing in cryptocurrency. This personal testimonial lessened any uncertainties the victims may have had about virtual currencies and eventually had the intended effect to persuade the victim to proceed with the investment.
The fraudster would then guide the victim, step-by-step, on how to open a legitimate cryptocurrency account, most often with a U.S. based virtual currency exchange such as Crypto.com or Coinbase. The scammer would walk the victim through the entire process of transferring money from their bank to the newly created cryptocurrency account. Next, the victim received instructions on how to transfer the purchased cryptocurrency assets to an online “investment platform,” which would turn out to be a fake site created by the fraudsters to look like a legitimate company. Information on the platforms promised lucrative returns which encouraged victims to invest further. However, once the victim transferred their funds to the “investment platform” they unknowingly handed over complete control and ownership of their funds to the scammer.
The complaint also outlines that the perpetrators of such investment fraud schemes often allow victims to withdraw a portion of their “profits” early on in the scheme to build trust and reinforce their belief that the “investment platform” was legitimate. But as the scheme progressed, victims were unable to withdraw their funds and given excuses as to why they could not access their funds. For example, the fraudsters referred to a fake “tax” requirement, stating that taxes must be paid on the proceeds generated from the investment platform. Knowing that the scam would run its course soon, the fraudsters used last-ditch efforts to lie to victims that they had to pay a tax. Ultimately, victims were locked out of their account on the investment platform and lost their funds.
A woman in Lake County, Ohio became the target of such a scam when she responded to a text on her phone from an unknown number in November 2023. She began sharing information via text with the person and the two bonded over topics such as hobbies and religion. Over a period of time, the victim followed instructions from her new “friend” and opened an account at Crypto.com and then transferred funds into the account. When the victim wanted to withdraw funds, her “friend,” relented and said additional payments were needed and she complied. When the victim no longer had any funds left after making additional payments, her “friend” began to threaten her that he would send his friends to “take care of” her friends and family. Having lost her entire life savings of approximately $663,352, including funds from her Roth IRA, the victim filed a complaint with the FBI’s Internet Crime Complaint Center to report the losses in June 2024. The FBI Cleveland Division subsequently initiated an investigation.
Investigators conducted a blockchain analysis and determined that a portion of the funds stolen from victims were converted to USDT cryptocurrency and placed into three cryptocurrency addresses. Law enforcement officers executed a federal seizure warrant to recover 8,207,578 USDT tokens, in November 2024. Tether Limited then transferred these funds to a law-enforcement-controlled virtual currency wallet.
By the Complaint in Forfeiture filed on Feb. 27, 2025, the United States seeks to forfeit the entire 8,207,578 USDT cryptocurrency. In the complaint, the United States alleges that the cryptocurrency accounts also contained additional funds above the victims’ traceable losses and, as proceeds of fraud, are also subject to forfeiture. Additionally, the complaint alleges that such other funds were involved in money laundering violations.
The claims asserted in the complaint are allegations only, and the United States must prove these allegations by a preponderance of the evidence at trial.
If successful in this forfeiture action, the United States would seek to return the stolen funds to the victims.
The FBI Cleveland Division is actively investigating cryptocurrency fraud schemes perpetrated on victims throughout the United States, including in the Northern District of Ohio. The United States is represented in this matter by Assistant United States Attorney James L. Morford. The USAO would like to acknowledge Tether for its assistance in this matter.
If you observe something that you believe might be fraudulent conduct involving an older adult, contact the dedicated National Elder Fraud Hotline at 1-833-FRAUD-11 or 1-833-372-8311 and visit the FBI’s IC3 Elder Fraud Complaint Center at IC3.gov to report it.
Copyright 2025 by Lima Communications Corporation. All rights reserved.
