US government recovers $3.5 million in Bitcoin to reimburse cyber fraud victims

The authorities said Bitcoin recent price increase would aid their efforts to reimburse the fraud victims.

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Bitcoin’s surge to a record high of over $107,000 has boosted the US government’s efforts to reimburse victims of a business email compromise (BEC) scheme.

On Dec. 16, the US Department of Justice (DOJ) announced the recovery of 32.68 BTC, valued at over $3.5 million, stolen in a December 2023 cyber fraud case.

The recovery resulted from a collaborative investigation involving the US Secret Service and the US Attorney’s Office’s Asset Forfeiture Unit.

The fraud

According to the DOJ, the BTC was obtained through a BEC scheme targeting a real estate company. Fraudsters infiltrated the company’s system and issued fraudulent wire transfer instructions, siphoning over $1 million.

The investigation further revealed that approximately ten other individuals and businesses fell prey to similar scams. These victims reported losses ranging between $75,000 and $425,000.

The authorities noted that the stolen funds were laundered through multiple bank accounts, including those managed by money mules, before being consolidated into a single crypto wallet. The wallet was traced to fraudsters operating out of Nigeria.

At the time of seizure, the 32.68 BTC was approximately $900,000. However, Bitcoin’s recent price rally has significantly increased its worth to around $3.5 million, according to CryptoSlate data, with Bitcoin trading at $107,262 at press time.

Reimbursement efforts

The authorities believe the surge in Bitcoin’s value will allow all ten claimants to be fully reimbursed for their losses.

The US Attorney’s Office has filed a civil forfeiture case to recover the seized assets and ensure restitution for victims.

US Attorney Tessa Gorman emphasized the importance of civil forfeiture as a key tool in supporting victims, even before the perpetrators are apprehended.

Gorman stated:

“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.”