DOJ moves to recover $7M in crypto tied to oil and gas investment scam

US regulators have moved to recover over $7 million in cryptocurrencies seized by Homeland Security during an investigation into a suspected oil and gas investment scam. The Seattle US Attorney’s Office has filed a civil forfeiture action to claim the digital assets, which were allegedly used to launder proceeds from the fraudulent scheme. The funds were part of a $97 million scam that defrauded investors between June 2022 and July 2024. According to Acting US Attorney Teal Luthy Miller, the defendants transferred the illicit gains through various cryptocurrency accounts in an attempt to obscure their origin and avoid detection. The seized assets include crypto held in wallets linked to individuals based in Russia and Nigeria, who allegedly routed part of the funds to exchanges in their home countries. Scammers promised unrealistic gains; one was indicted An initial probe found that victims were lured with promises of high returns from investments in oil tank storage facilities in Rotterdam and Houston. They were told that these assets would be rented out for substantial profits. However, after the money was sent, the operators stopped responding, and the investors received no documentation or further contact. According to Investigators, the funds were directed to several business entities, including Sea Forest International LLC and Apex Oil and Gas Trading LLC, which were used as fronts for the operation. The fraud also involved multiple accounts and wallets to obscure money flows. Geoffrey Auyeung, a 47-year-old from Newcastle, Washington, was indicted in August 2024 as the primary US-based co-conspirator. Authorities alleged he received a large share of the proceeds and converted the funds into Bitcoin, Tether, USDC, and Ether. A portion of the funds was transferred to Binance. At the time of his arrest, the DOJ seized approximately $2.3 million from Auyeung’s bank accounts. If the court grants the $7.1 million forfeiture request, the total recovered amount will rise to $9.4 million, which will be distributed to confirmed victims. Prosecutors have so far identified around $17.9 million in verified losses but expect more victims to come forward. DOJ’s focus on recovery efforts With billions lost to fraud in 2024, according to FBI estimates , federal authorities have continued to pursue cross-border enforcement and prosecutions. Over the past month, the Justice Department, in particular, has been busy pursuing recovery actions tied to various crypto fraud cases In June, the DOJ filed a civil complaint to seize over $225 million in Tether linked to a massive pig butchering scheme that defrauded more than 400 victims globally. Bad actors were found to be using blockchain-based laundering tools to mask the origin of the stolen funds. However, authorities were able to trace the assets with assistance from stablecoin issuer Tether. Just weeks later, the DOJ recovered $40,300 in USDT following a phishing scam involving impersonation of the Trump-Vance Inaugural Committee. A donor was tricked into transferring $250,300 in crypto after receiving a fake email request. The scam was uncovered, and with help from Tether , part of the funds was successfully retrieved. Separately, the DOJ resolved a $35 million crypto dispute with bankrupt lender BlockFi. The department had initially sought to seize the assets as part of a criminal fraud case involving Estonian nationals. The settlement, approved in June, allowed the funds to be removed from the bankruptcy estate and concluded the case without further litigation. The post DOJ moves to recover $7M in crypto tied to oil and gas investment scam appeared first on Invezz

Source: Invezz