Seized Bitcoin Triples in Value, Helping Fraud Victims Recover Losses

Law enforcement’s swift action seized $900,000 in bitcoin from a Nigerian fraud scheme, and its soaring value may fully reimburse victims of a $1 million scam.

Bitcoin Boom: Law Enforcement’s Quick Move Recovers Millions for Scam Victims

The U.S. Attorney’s Office for the Western District of Washington announced on Monday that bitcoin seized during a fraud investigation will help victims recover funds lost in a business email compromise (BEC) scheme. The announcement details:

Acting quickly, law enforcement seized approximately 32.68 bitcoin, then worth about $900,000, from the fraudsters’ cryptocurrency wallet.

“The U.S. Attorney’s Office then filed a civil forfeiture case against the seized bitcoin, the value of which has more than tripled since the time of seizure,” the announcement adds. “Due to the rising price of bitcoin, it is possible that each of the ten victims who have filed claims will be made whole.” The scheme, which targeted real estate transactions, resulted in the theft of more than $1 million.

The fraud surfaced in December 2023 when a company handling real estate transactions reported a system breach. Fraudsters infiltrated the systems to send false wire transfer instructions, diverting large sums intended for mortgage and property payments. Investigators uncovered that at least ten individuals and businesses suffered financial losses, with amounts ranging from $75,000 to $425,000.

The stolen funds were laundered through various bank accounts, including those operated by money mules, and ultimately consolidated into a cryptocurrency wallet controlled by fraudsters based in Nigeria. Law enforcement’s quick response ensured the seizure of the bitcoin, preserving its value for victims.

U.S. Attorney Tessa M. Gorman praised the collaborative effort, stating:

I commend the quick work by law enforcement and the Asset Forfeiture Unit who moved to seize this bitcoin and are working diligently to make these victims whole.

She emphasized the significance of civil forfeiture in cases where the perpetrators remain at large, adding that it is an essential tool for assisting victims. The substantial increase in bitcoin’s value since the seizure ensures that the victims will likely recover their full losses, providing much-needed financial relief and marking a victory in the fight against cyber-enabled fraud.