Brooklyn prosecutors dismantle crypto scam aimed at Russian speakers

Brooklyn prosecutors and the FBI dismantled the online infrastructure of a multinational crypto investment scam that targeted Russian speakers in the United States, seizing and disrupting 241 web domains and 112 servers.

District Attorney Eric Gonzalez announced the operation on Oct. 14, calling it one of the biggest operational cyber disruptions undertaken by a local prosecutor's office, the office said in its release. The Virtual Currency Unit disabled the global operation with the FBI after a three-year investigation into a fraud network that relied on infrastructure and IP addresses in Ukraine and other Eastern European countries. No arrests were announced.

Victims followed a consistent pattern. A person responded to a Russian-language Facebook ad for investment opportunities, then got a follow-up call from an investment adviser speaking Russian, the release said. The adviser coached the victim into opening an account on a crypto investment platform, helped them buy crypto and send it to linked addresses, and then the platform locked withdrawals or demanded extra payments for supposed taxes and fees after weeks or months of supposed investing.

The scammers came back for more. Data from the seized servers showed the operators ran a recovery scam, contacting victims a few weeks after the first fraud with promises to retrieve the stolen assets, prosecutors said. "These criminals stole many millions of dollars from Russian-speaking victims through an elaborate investment scheme, then tried to exploit them again with false promises to recover their money," Gonzalez said.

The takedown played out across three time zones last week as the unit executed search warrants and other enforcement actions over several hours. The seized cluster held more than 100 cloud-based servers hosted by Eastern European and American companies, cutting the operators off from the data behind their domains, victim information and operating software, the office said. The office thanked the FBI, Shadow Server, Coeus and UltaHost for help with the investigation.

Prosecutors put the theft at tens of millions of dollars, with some victims losing their entire life savings, CoinDesk reported. About $300,000 has been seized so far, with recovery work continuing. Brooklyn's large Russian-speaking population meant the borough absorbed a disproportionate share of the losses.

The unit had seized or disrupted 400 domains tied to crypto investment fraud before last week, but replacement sites kept appearing, Decrypt reported. Going after the servers instead removes the operators' ability to spin up new sites fast and contact existing victims. Investigators named Assistant District Attorney Alona Katz, chief of the Virtual Currency Unit, as leading the case team alongside analysts and the Digital Evidence Lab, the release noted.

"When scammers halfway around the world target Brooklyn residents, they should know they are not beyond our reach," Gonzalez said in the release. "By disrupting more than 100 servers and hundreds of fraudulent websites, we have struck at the heart of this criminal enterprise and made it far harder for these scammers to victimize others." James C. Barnacle, assistant director in charge of the FBI's New York field office, called the case a prime example of what partnerships across state, local and international law enforcement can do. The case team included Assistant District Attorney Alex Davis, analysts Christopher Vellios and Paul Stenzel, and the Digital Evidence Lab under Assistant District Attorney Jingu Chong.

No arrests were announced with the takedown, which targeted infrastructure rather than individuals. Before last week the unit's 400 domain seizures had proved effective at warning visitors about the ongoing scam, but new sites appeared quickly, which pushed investigators to go after the servers instead, the office said. Barnacle said the FBI will keep supporting its partners with every available resource, human and technological, and asked the public to report criminal activity it sees. The seized server contents confirmed millions in losses across Brooklyn's Russian community and the rest of the country, and prosecutors say recovery efforts continue.

The case landed against grim national numbers. Crypto investment scams made up roughly 84 percent of the $8.65 billion in investment-fraud losses reported to the FBI in 2025, and crypto-linked losses across all internet-crime categories reached $11.37 billion out of $20.88 billion overall, according to the FBI figures cited by CoinDesk. The office recently prosecuted a separate case in which a local man stole $16 million from nearly 100 Coinbase users through phishing and received up to 12 years in prison, Decrypt noted.