New York AG Seeks Recovery of $2.2 Million in Crypto Tied to Remote Job Scam

New York Attorney General Letitia James has filed a lawsuit to recover $2.2 million worth of cryptocurrency held in digital wallets and stolen from New Yorkers and victims across the country in a remote job scam.

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James said an investigation by her Office of the Attorney General (OAG), together with the U.S. Secret Service and the Queens County District Attorney’s Office, found that scammers have been sending text messages offering fake online jobs that were actually part of a scheme to entice unsuspecting people to purchase and deposit stablecoins, a type of cryptocurrency, into the scammers’ digital wallets. The scammers promised victims compensation if they opened a cryptocurrency account, deposited cryptocurrency, and began reviewing products on fake websites that replicated legitimate brands.

James is seeking to recover the frozen cryptocurrency for the defrauded victims and require the scammers to pay penalties, restitution, and damages and permanently stop them from advertising or sending unsolicited text messages in New York.

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The scam took place from at least January 2024, through at least June 2024, and was conducted by a “web of unknown individuals” who were “in and from unknown locations,” according to the OAG’s complaint.

The OAG said the scammers told victims who responded to unsolicited text messages that the jobs required them to review products online to help generate “market data” that would lead to sales. The victims were then told that to earn money they had to open accounts with a number of cryptocurrency platforms and had to maintain a cryptocurrency account equal to, or greater than, the price of the products they were reviewing. According to prosecutors, the victims were assured that they were not purchasing the products but that the account balances would help “legitimize” the data they were generating. They were promised they would get their original payment back plus commission. Victims were also instructed to create and connect a crypto wallet to their working accounts to receive their compensation, according to investigators.

The text recipients who expressed interest in a job opportunity were told they would be contacted via WhatsApp by individuals claiming to be “trainers,” and who would share further details about the supposed work opportunity. Persons posing as trainers typically contacted Victims within one to two days, according to the OAG. Most Victims had no prior experience with cryptocurrency.

Victims were told to buy two types of stablecoins known as “USDC” and “USDT” on platforms including Coinbase, Gemini, and Crypto.com. Prosecutors say victims were then “tricked” into sending their crypto to un-hosted digital wallets, which make the tokens harder to trace and the scammers impossible to identify or locate.

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When victims tried to pull out their money, the scammers invented fees such as a “credit score improvement fee” or a “blockchain verification fee” or an “escrow fee” that required the victims to put in more cryptocurrency but never allowed them to withdraw anything.

During the course of its investigation, OAG secured technology platform Tether Limited’s voluntary cooperation to freeze the stolen USDT, and the Queens County District Attorney’s Office secured a search warrant to freeze USDC stolen in the scam. Because the cryptocurrency has been frozen, it is available to be recovered and returned to the scammers’ victims under court approval.

In the lawsuit, James seeks to become the first government regulator to provide notice of litigation by depositing a nonfungible token (NFT) into the wallets used to steal the victims’ cryptocurrency. The NFT will provide a link to an OAG website containing all of the pleadings.

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