Federal prosecutors in Seattle aim to recover and return millions in stolen cryptocurrency tied to a fraudulent oil and gas investment scheme.

Crypto Seized in Investment Scam Probe

The United States is seeking to forfeit $7.1 million worth of cryptocurrency allegedly linked to a large-scale investment fraud. Homeland Security investigators seized the crypto in December 2024 as part of a wider investigation into a fraudulent scheme that reportedly raised nearly $97 million from investors between June 2022 and July 2024.

According to the US Attorney’s Office in Seattle, a civil action has now been filed to secure forfeiture of the seized funds. Prosecutors intend to redistribute the reclaimed amount to verified victims of the scam. Acting US Attorney Teal Luthy Miller stated that those involved in the scheme moved the stolen funds through multiple cryptocurrency accounts in an attempt to launder the money.

Funds Traced to Russia and Nigeria
Officials said the crypto accounts targeted for forfeiture belong to individuals based in Russia and Nigeria. The accused allegedly used victims’ funds to purchase various cryptocurrencies and transferred a portion to exchanges in their home countries. Prosecutors believe the digital assets were used to obscure the origin of the stolen money and to facilitate international money laundering.

Key Suspect Indicted
One person, Geoffrey Auyeung, was indicted in August 2024 in connection with the scheme. Prosecutors claimed Auyeung received the largest share of the fraudulent proceeds. He is accused of using the stolen money to purchase Bitcoin, Tether, USD Coin and Ether, later transferring most of the funds to the crypto exchange Binance.

At the time of his arrest, authorities seized around $2.3 million from his bank accounts. The Department of Justice alleges that Auyeung and other co-conspirators lured investors into a fake oil storage business, promising significant returns from renting out oil tank storage facilities. Once the investments were made, the perpetrators allegedly cut off communication and disappeared with the funds.

Victim Losses Mount
So far, prosecutors have identified at least $17.9 million in verified losses suffered by victims. However, officials believe the actual number may be significantly higher and expect more victims to come forward once they are identified and confirmed. If the court grants the $7.1 million forfeiture, total reclaimed funds will reach $9.4 million, which could then be distributed among the victims.

Broader Crackdown on Crypto Fraud
This case is part of a wider regulatory push against crypto-related fraud. Earlier this month, US prosecutors charged two men who promoted the crypto investment platform OmegaPro. The duo is accused of defrauding investors out of $650 million and could face up to 40 years in prison if convicted.

In another case, former rugby player Shane Donovan Moore was sentenced to two and a half years in a US federal prison for operating a $900,000 Ponzi scheme that deceived over 40 investors. Meanwhile, Hong Kong police arrested four individuals in connection with a scam worth 3 million Hong Kong dollars, or roughly $382,000. The alleged mastermind behind the fraud remains at large after fleeing the country.

As global authorities ramp up efforts to tackle fraud in the digital asset space, cases like these highlight the growing need for oversight and investor awareness in crypto markets.