A sophisticated job scam has swindled $2.2 million in cryptocurrencies from New Yorkers and others, according to a lawsuit filed by New York Attorney General Letitia James on January 9th.
The scam targeted individuals seeking remote work, using deceptive text messages and fake promises of lucrative jobs to manipulate victims into depositing funds into cryptocurrency wallets controlled by the scammers.
How did the Scam Work?
The fraudulent operation ran from January to June of last year, affecting at least seven individuals in New York and two others in Virginia and Florida. Victims were lured through unsolicited text messages advertising high-paying, flexible remote jobs.
Once victims responded, they were told the job involved reviewing products online, requiring them to open cryptocurrency accounts and maintain specific balances to qualify for tasks.
Scammers assured victims that these balances would not be spent but would instead serve to “legitimize” data being generated.
Fake companies with names like Digistore24, CultureFit Technology, and FeraAI were used to create an illusion of legitimacy. Victims were shown phony earnings through fraudulent websites and user accounts, making the scam appear credible.
As victims continued depositing funds to maintain their “account balances” and meet “withdrawal points,” many exhausted their savings, took out loans, or borrowed from friends and family.
A 39-year-old man in Queens lost over $58,000, while another victim, referred to as Mell in court documents, lost nearly $120,000. One Florida woman deposited over $300,000 into crypto wallets over just 20 days.
The Devastating Impact
The financial and emotional toll on victims has been immense. One victim described the ordeal as a “never-ending nightmare,” while another reportedly exclaimed, “I’m gonna die,” after losing their life savings. For some, the scam led to financial ruin, leaving them unable to pay rent or meet basic needs.
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The fraudsters used legitimate cryptocurrency platforms like Coinbase, Gemini, and Crypto.com to process initial purchases of stablecoins like Tether (USDT) and USD Coin (USDC).
However, victims were then instructed to transfer their funds to un-hosted digital wallets, which allowed the scammers to abscond with the money.
Legal Action and Recovery Efforts
The investigation, a collaborative effort by the Attorney General’s office, the Queens District Attorney, and the U.S. Secret Service, identified several cryptocurrency wallets holding stolen funds.
These accounts have been frozen. The lawsuit seeks to recover the funds, impose penalties, and permanently prohibit the scammers from sending unsolicited messages in New York.
In a novel legal strategy, the anonymous owners of the wallets will be served via an NFT deposited directly into the wallets. The NFT will link the wallets to the legal pleadings, ensuring the scammers are notified of the legal actions.
Public Awareness and Warnings
Attorney General James urged anyone who believes they may have been targeted by a similar scam to contact her office and file a complaint. She stated, “Deceiving New Yorkers looking to take on remote work and earn money to support their families is cruel and unacceptable.”
This case highlights the importance of vigilance when receiving unsolicited job offers, especially those requiring upfront investments or cryptocurrency transactions.
As crypto-related scams continue to proliferate, authorities are urging individuals to exercise caution and report suspicious activities promptly.
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