A new type of SMS scam, falsely claiming to offer high-paying remote work opportunities, has defrauded multiple individuals in New York and other places of cryptocurrency worth $2.2 million. On January 9th, New York State Attorney General Letitia James filed a lawsuit on behalf of the victims, seeking to recover the frozen cryptocurrency and punish the scammers.
The investigation conducted jointly by the State Attorney General’s Office, the U.S. Secret Service, and the Queens District Attorney’s Office revealed a scam that lasted for at least half a year from January to June last year. The fraudsters targeted remote workers using the same tactics: initially sending unsolicited text messages from fake phone numbers claiming to offer high-paying, flexible, remote work opportunities where individuals could earn up to a 25% commission by reviewing counterfeit brand products online. Victims were asked to open cryptocurrency accounts (or online wallets), deposit cryptocurrency, and maintain a certain account balance depending on the value of the products being reviewed.
Subsequently, victims were informed that to earn more commission, they needed to review higher-priced products, thus requiring higher account balances. Despite seeing their account income accumulate, whenever victims attempted to withdraw their “deposits,” scammers fabricated additional fees such as “credit score improvement fees,” “blockchain verification fees,” or “third-party custody fees,” demanding more cryptocurrency deposits without allowing any withdrawals.
Victims were forced to deposit more cryptocurrency through methods like advance credit, bank loans, borrowing from family and friends, eventually reaching a financial breaking point before realizing they had been deceived.
This lawsuit involves seven victims from Queens and Nassau Counties, as well as two victims from Virginia and Florida, each incurring losses ranging from several thousand dollars to tens of thousands of dollars in this cryptocurrency scam. One Queens teacher was swindled of $120,000, while another woman from Florida was scammed of over $300,000. The total value of the fraudulent cryptocurrency amounts to $2.2 million.
On January 9th, Letitia James filed a lawsuit in Queens County Supreme Court to recover the cryptocurrency for the defrauded victims, and requested the court to order the scammers to pay fines, compensate for the losses, and permanently prohibit them from advertising or sending unsolicited text messages in New York.
During the investigation, the State Attorney General’s Office obtained voluntary cooperation from the cryptocurrency platform Tether Limited, freezing the defrauded USDT cryptocurrency, while the Queens District Attorney’s Office obtained a court order to freeze the defrauded USDC cryptocurrency. Since the cryptocurrency has been frozen, it can be recovered and returned to the victims upon court approval.