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Feds seize domains linked to cryptocurrency investment scam exploiting New York’s Russian diaspora
The Brooklyn District Attorney’s Office has seized 70 domains linked to a hog slaughter scam that bilked members of the Russian diaspora out of millions through fake cryptocurrency investments.
The office’s virtual currency unit began receiving complaints in October 2023 from the district’s Russian-speaking community, District Attorney Eric Gonzalez She said. Investigators uncovered a “shared narrative” that lured victims, starting with Facebook ads for cryptocurrency investments. Many of these ads included a deepfake video of Elon Musk encouraging people to invest.
The victims were eventually connected to a Russian-speaking “investment advisor” who helped them create accounts on fraudulent cryptocurrency trading platforms.
“After ‘investing’ for several weeks or months, victims attempted to make a withdrawal but were locked out of their account or told they had to pay additional fees and taxes,” the DA’s office said . This pattern, which involves forcing victims to invest before abruptly ending interactions, is a hallmark of pig slaughter scams.
“It is believed that the sites originated from Russia and that the scammers spoke in Russian as a way to curry favor with victims and build trust,” they said. “Because Russia is outside the jurisdiction of the United States, recovering any stolen funds is extremely difficult and so the DA’s office’s strategy has been to foil the scam by taking control of the fake websites.”
More than 20 Brooklyn residents lost more than $1 million in total. Brooklyn has one of the largest Russian populations in the United States, with approximately 120,000 Russian speakers. Victims across the country, from Maryland to California, lost another $4 million – “believed to be only a fraction of the total financial damage caused by this scam,” Gonzalez added.
After the seizure of the domains, the Prosecutor’s Office received calls from people who were still investing on the platform but who became aware of the scam thanks to the seizure notice.
In May, Brian Lambert, deputy director of investigations for the Secret Service, called cryptocurrency investment fraud “a clear and present threat to the financial infrastructure of the United States.”
Americans reported losses of $3.96 billion last year to the FBI linked to cryptocurrency investment fraud.
Thursday, New York Attorney General Letitia James issued a warning to residents about another type of digital fraud – romance scams – warning: “If it sounds too good to be true, it probably is.”
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