Justice Seizes 16% of Stolen USDT in Inaugural Committee Scam

The U.S. Department of Justice is actively pursuing the recovery of 40,353 USDT, a stablecoin, which was stolen in a fraudulent scheme. The scam involved impersonators posing as officials from the Inaugural Committee, targeting donors who transferred USDT worth approximately $250,300 through Ethereum. The fraudulent activity began on December 24, 2024, when the scammers, operating from Nigeria, impersonated Steve Witkoff, the co-chair of the Inaugural Committee, using a deceptively similar email address. The stolen funds were subsequently laundered through multiple wallets, but blockchain analysis enabled investigators to trace and seize a portion of the assets. The Department of Justice is now working to return the recovered funds to the victims.

The scam targeted donors who believed they were contributing to the Inaugural Committee's activities. The fraudsters used a cleverly crafted email address, replacing the letter "i" with the number "1" to deceive the recipients. The funds were transferred to a wallet ending in "58c52," and within two days, the money was moved through several other wallets. Despite the complexity of the blockchain system, the Department of Justice, with the assistance of Tether, the issuer of the USDT stablecoin, was able to track and seize the stolen assets.

The Department of Justice has emphasized the importance of verifying the authenticity of digital currency transactions. "Every donor should double-check and triple-check that they are sending digital currency to the intended recipient," said U.S. Attorney General, Jeanine Ferris Pirro. The complexity of the blockchain system makes it challenging to recover lost funds, but the Department of Justice is committed to returning the seized assets to the victims.

The FBI has also issued a warning to the public, advising them to be cautious of minor differences in email addresses and URLs, which are often used by scammers to deceive their targets. "Do not send crypto or assets to individuals you do not personally know," said Steven J. Jensen, the FBI's Assistant Director. The Department of Justice supports efforts to combat cybercrime, including business email compromises, investment scams, and romance scams, which are reported to the FBI's Internet Crime Complaint Center.

In a related development, the Department of Justice recently collaborated with Tether and Coinbase to assist in a major cryptocurrency seizure operation. The seized assets, valued at $225 million, were linked to various fraudulent activities, marking the largest seizure in the history of the Department of Justice. The seized funds, primarily in USDT, were frozen in December 2023 by Tether after authorities discovered their connection to a human trafficking ring involved in a "pig butchering" scam. This type of fraud lures victims into fake online relationships and financial schemes.