The Brooklyn District Attorney’s Office has launched a groundbreaking effort to combat cryptocurrency scams targeting Brooklyn’s Russian-speaking community, alerting over 1,200 victims and disrupting a fraudulent network preying on unsuspecting investors.
The DA’s office announced last week that investigators dismantled the operation by seizing the mail servers of illegal cryptocurrency traders, uncovering contact information used to deceive victims. The office then sent email alerts to more than 1,000 individuals whose information was extracted from the servers, warning them to stop investing money into what they deemed to be fake investment websites.
The alerts flagged emails from “stocks-finance.com” as being from fraudulent organizations, and advised recipients to halt any further money transfers or transactions.
“We are using every tool at our disposal to stop crypto investment scams,” Brooklyn District Attorney Eric Gonzalez said in a statement. “Since recovering lost funds is often impossible because they’re typically quickly cashed overseas, we focus on disruption and education.”
In 2023, the DA’s office launched a Virtual Currency Unit following ongoing reports from Brooklyn residents losing their investments in cryptocurrency scams. As the investigation continued, a familiar narrative began to surface.
Multiple victims recounted being lured into the scam through Facebook ads that featured a “deepfake” video of Elon Musk encouraging people to invest in cryptocurrency, according to the DA’s office. (“Deepfake” refers to realistic video, audio or images generated by artificial intelligence (AI) tools to alter faces or synthesize speech.) Victims would receive a follow-up phone call from a Russian-speaking “investment advisor” who would guide them through the process of purchasing cryptocurrency and transferring it to an investment website.
Following their investments, when victims went to withdraw their funds, they would be locked out of their accounts and directed to pay additional fees and taxes. This style of scam is commonly referred to as “pig butcherching.”
“This particular operation targeted members of the Russian community through Facebook advertising by speaking their language, gaining their trust, and convincing them into making investments that were ultimately stolen,” Gonzalez said. “We have now severely disrupted this long-running scam and will continue this work on taking fake investment websites offline to protect the public while raising awareness, so our neighbors can protect themselves.”
Since last April, the Brooklyn DA’s Virtual Currency Unit has shut down 140 domains linked to illegal cryptocurrency investment schemes. The scams are believed to have cost Brooklyn residents — mainly Russian-speaking — of more than $1 million and U.S. victims approximately $5 million, according to the DA’s office.
This month, the DA’s office teamed up with federal partners, including the FBI, the Commodity Futures Trading Commission, and the Security and Exchange Commission, to host an educational seminar in Brighton Beach.
More than 100 residents attended the event, where officials answered questions about online scams, identified warning signs, and shared tips for protecting against fraudulent cryptocurrency investments. The DA’s office chose the location because of the Brighton Beach’s sizable Russian demographic.
The neighborhood is home to the second-largest Russian-born population among New York City’s census-defined areas, according to the New York State Comptroller.
While this series of scams primarily targeted the Russian-speaking community, Oren Yaniv, director of communications for the Brooklyn District Attorney’s Office, warned that international cryptocurrency investment scams can target any community.
“It’s next to impossible to identify the actual individuals who are doing that,” Yaniv told Brooklyn Paper. “Some of those schemes involve international groups, and in any event, they’re all outside U.S. jurisdiction. So, even if we were to identify anyone, we don’t have jurisdiction over that.”
Yaniv shared that awareness and education are the best ways to prevent further scams.
“They’re sophisticated,” he said of the hackers. “They know what they’re doing, and they’re very good. We’re just trying to share the warning signs.”
Before investing, the DA’s office recommends verifying whether a cryptocurrency exchange is authorized to operate in New York State. Investors can check the organization’s status on the New York State Department of Financial Services website or by calling the department via their hotline at 800-342-3736.
