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The United States Department of Justice (DOJ) announced today that it has recovered and returned 12.164699 BTC, worth around $483,595 to an elderly man who resides in Asheville, North Carolina.
A Government Imposter Scam
The court alleged that the fraudster, who was a foreigner, contacted the victim by telephone claiming to work in the Office of the Inspector General. The conman, who identified himself as Agent James Hoffman, then misled the victim, telling him that his account had been used in carrying out a drug trafficking and money laundering act. Hoffman then informed the elderly man that his account would be frozen.
The fraudster told the victim to prove he was not involved in the illicit act and for the government to verify he was innocent, he needed to deposit funds into a secure government account. Hoffman also asked the victim to provide all of his personal identifying information, including details of his bank accounts.
The conman further instructed the victim to use his retirement earnings to purchase bitcoin from popular crypto exchange Coinbase Global. According to the report, the elderly man spent $574,766 to purchase the BTC at the time.
Hoffman then went on to transfer the BTC from the victim’s account to his personal account.
“Government imposter scams are pervasive and can be financially and psychologically devastating for those who fall prey. Thankfully, in this instance, the fraud was detected quickly and the stolen funds will be returned to the victim. Unfortunately, the majority of these cases do not share a similar ending,” said U.S. Attorney King,” U.S. Attorney King who is in charge of the case said.
Coinbase Saves the Day
Coinbase was helpful in recovering the stolen funds. The crypto exchange was able to trace and report the scam to US regulators.
“In making today’s announcement, U.S. Attorney King commended the FBI for its work in this case and thanked cryptocurrency exchanges, entities and financial institutions operating in the Western District of North Carolina for their cooperation and ongoing efforts to detect and report financial fraud,” King said.
Meanwhile, crypto scams have been on the rise for a long time and seem to be unending, but regulators are not sleeping on them and are coming up with ways to combat them.
Just last month, the DOJ reported that it has charged Satishkumar Kurjibhai Kumbhani, founder of BitConnect crypto exchange for alleged $2.4 billion in fraud.