The United States Department of Justice has frozen $8.2 million in cryptocurrency tied to a romance baiting scam that defrauded dozens of Americans.
In the scheme, scammers established a friendship or romance with the victim online. They then pushed them into making investments on counterfeit crypto platforms. The victims believed they were earning huge returns, prompting them to invest more money. But when they attempted to withdraw their money, they were met with fake charges, delays, and threats — later discovering the platforms were fraudulent.
The FBI managed to trace the pilfered money. Federal wire fraud (18 U.S.C. 981(a)(1)(C)) and money laundering laws (18 U.S.C. § 981(a)(1)(A)) allowed for total seizure of assets. Tether Limited froze the USDT tokens in June 2024 and remitted them to wallets controlled by law enforcement in November.
Court documents name five Ohio, California, Michigan, Utah, and North Carolina victims who collectively lost more than $1.6 million. Combined, the 38 affected crypto accounts reported confirmed losses of over $5.2 million.
One of the worst cases was a woman in Mentor, Ohio, who lost over $663,000. After she had invested $250,000, she was charged over $400,000 in fake "release" and "handling" fees. When she refused to pay an additional $300,000 to upgrade her “credit score,” the scammer threatened to harm her family. She had already depleted her Roth IRA and life savings.
It’s suspected that the scam operation is linked to organized crime and human trafficking networks in Cambodia and Myanmar. These syndicates generally force victims of human trafficking to conduct scams.
Scammers normally allow small initial withdrawal amounts to build trust, then invent excuses such as "taxes" or "credit scores" to ask for more money. When victims can no longer pay, threats and intimidation follow.
On account of the growing prevalence of romance baiting scams, law enforcement urges the public to be cautious with online investments and to avoid platforms promising guaranteed returns. Additionally, users are encouraged to always verify the legitimacy of any investment opportunity and only invest what they are willing to lose.
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