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BK DA Seizes 70 Domains Targeting Russian Community in Cryptocurrency Scam

More than 20 Brooklyn victims were scammed out of $1 million via Facebook ads.
Many of the ads they described featured a “deepfake” video of Elon Musk, encouraging people to invest in cryptocurrency.

Brooklyn District Attorney Eric Gonzalez announced that the Virtual Currency Unit successfully disrupted a cryptocurrency scam operation that targeted members of the Russian community, incuding those in Brooklyn.

The victims were lured into making what turned out to be bogus investments by responding to Facebook ads about investment opportunities then getting a call from a purported investment advisor, who spoke in Russian and guided them into making cryptocurrency transactions on what were actually fake websites, according to a press release. 

The investigation identified over 20 Brooklyn investors who lost over $1 million and additional victims from across the United States who lost an additional $4 million combined. The cluster of 70 linked domains have now been taken offline, the DA's office said.

“My office continues to respond to complaints from Brooklyn residents who fall victim to the growing problem of cryptocurrency scams," Gonzalez said. "This particular operation targeted members of the Russian community through Facebook advertising, by speaking their language, gaining their trust, and convincing them into making investments that were ultimately stolen."

Starting in October 2023, the Virtual Currency Unit started to regularly receive complaints about thousands of dollars in losses from residents of Russian speaking communities who were convinced into investing in what they believed to be legitimate cryptocurrency investment platforms.

The investigation identified a shared narrative under which victims were lured into the scam by clicking on a Facebook advertisement promising impressive returns. Many of the ads they described featured a “deepfake” video of Elon Musk, encouraging people to invest in cryptocurrency.

Victims then received a follow up call from an “investment advisor” who spoke to them in Russian and coached them into creating an account on an investment website. With the help of the “advisor,” victims purchased cryptocurrency and transferred it to addresses linked websites. After “investing” for several weeks or months, the victims attempted to make a withdrawal but were locked out of their account or told they had to pay additional fees and taxes. 

It is believed that the sites originated from Russia and the scammers were speaking in Russian as a way to ingratiate themselves to the victims and build trust. Because Russia is outside U.S. jurisdiction, recovering any stolen funds is extremely difficult and therefore, the DA’s Office strategy has been to disrupt the scam by taking control of the fake websites.
This week, the Virtual Currency Unit, pursuant to a court order, seized a network of 70 linked scam domains, all associated with the investment scam targeting Russian victims in Brooklyn and elsewhere. 

It identified over 20 Brooklyn victims from Brighton Beach, Borough Park, Midwood, Sheepshead Bay, Ocean Parkway, Manhattan Beach, Kensington, and other neighborhoods. There were three additional victims from Manhattan. The victims ranged in age from 35 to 75 with the majority older than 50. They reported individual loss amounts ranging from $18,000 to over $117,000. In total, the New York victims lost over $1 million. 
In addition, the investigation found other Russian speaking victims from across the country (California, Maryland, Washington, Nebraska, Florida, Illinois, South Carolina and Pennsylvania). The combined victims across the country reported a total of $4 million in losses, believed to be just a fraction of the total financial damage caused in this scam.