Attorney General James Stops Text Message Scam Targeting Vulnerable New Yorkers Looking for Remote Job Opportunities

NEW YORK - New York Attorney General Letitia James today filed a lawsuit to recover $2.2 million worth of cryptocurrency held in digital wallets and stolen from New Yorkers and victims across the country in a remote job scam. An investigation by the Office of the Attorney General (OAG), together with the U.S. Secret Service and the Queens County District Attorney's Office, found that scammers have been sending text messages offering fake online job opportunities that were actually a scheme to entice unsuspecting people to purchase and deposit stablecoins, a type of cryptocurrency, into those scammers' digital wallets. The scammers promised victims compensation if they opened a cryptocurrency account, deposited cryptocurrency, and began reviewing products on fake websites that replicated legitimate brands. Through this action, Attorney General James is seeking to recover the frozen cryptocurrency for defrauded victims and require the scammers to pay penalties, restitution, and damages and permanently stop them from advertising or sending unsolicited text messages in New York.

"Deceiving New Yorkers looking to take on remote work and earn money to support their families is cruel and unacceptable," said Attorney General James. "Scammers sent text messages to New Yorkers promising them good-paying, flexible jobs only to trick them into purchasing cryptocurrency and then stealing it from them. The cryptocurrency that has been frozen thanks to my office will be available to help New Yorkers defrauded by this scam. I urge all New Yorkers to be cautious of text messages from unknown senders claiming to offer jobs or other opportunities, and to report any scams to my office."

"Crimes of deception continue to evolve, driven by large windfalls stolen from unsuspecting victims," said Patrick J. Freaney, Special Agent-in-Charge, United States Secret Service, New York Field Office. "While this cyber scam operated across multiple jurisdictions, crypto-tracing by the Secret Service in New York and its close partnership with the New York Attorney General's Office resulted in the freezing of millions of dollars and brought disruption to this harmful operation."

"Work scams that prey on those seeking legitimate employment not only rob victims of their hard-earned money but also shatter their trust in the job market," said Queens District Attorney Melinda Katz. "In this case, the perpetrators used advanced technology to lure victims into depositing cryptocurrency and stole millions of dollars in the form of stablecoins. Based on a referral from the U.S. Secret Service, my Cryptocurrency Unit was able to identify and trace over $2 million in stolen crypto and identify the digital wallets where these coins were being held. Partnering with State Attorney General Letitia James' Investor Protection Bureau, we were able to freeze the tokens to preserve victim funds while the Attorney General's office seeks to recover the stolen millions. I want to thank the diligent prosecutors and investigators in my Cryptocurrency Unit and members of the Attorney General's office for their outstanding work on this case. I also want to acknowledge Tether and Circle Internet Group, inc. for their crucial assistance."

The OAG investigation found that a network of scammers has been targeting people looking for remote jobs and tricking them into depositing money into cryptocurrency accounts as a way to start earning money. The scammers told victims who responded to unsolicited text messages that the jobs required them to review products online to help generate "market data" that would lead to sales. The victims were then told that to earn money they had to open accounts with a number of registered and licensed cryptocurrency platforms and had to maintain a cryptocurrency account equal to, or greater than, the price of the products they were reviewing. The victims were assured that they were not purchasing the products but that the account balances would help "legitimize" the data they were generating and that they would get their original payment back plus commission. Victims were also instructed to create and connect a crypto wallet to their working accounts to receive their compensation.

Examples of text messages sent by scammers claiming to offer job opportunities

Scammers told victims to buy two types of stablecoins known as "USDC" and "USDT" using transparent purchases on registered, licensed, and centralized platforms, including Coinbase, Gemini, and Crypto.com. Victims were then tricked into sending their crypto to un-hosted digital wallets, which make the tokens harder to trace and the scammers impossible to identify or locate. Leaving centralized, registered, licensed platforms allowed the scammers to avoid "know-your-customer" safeguards and execute off-chain conversions from USDC to USDT that clouded the origin and movement of the cryptocurrency. Some scammers separately urged victims who encountered cryptocurrency platform limits to send them U.S. dollars directly using money services businesses, such as Wise, and promising to buy the cryptocurrency for them.

One New York victim was defrauded out of over $100,000 from the text message scheme. The victim received a text message offering remote work with "numerous benefits and flexible requirements." The victim was promised a registration bonus and 25 percent commissions generated during a mandatory training period. A scammer, posing as a trainer, helped the victim set up a wallet on LBank, a cryptocurrency platform that allows users to buy, sell, and store their cryptocurrencies. Once the victim established a wallet, the scammer instructed the victim on how to connect the wallet to a "working account" and purchase and transfer stablecoins to the wallet in order to conduct product reviews. The working accounts and product reviews did not exist and took place on a false website the scammers used to impersonate a legitimate company. The victim's stablecoins simply went to the scammers' wallets.

When victims tried to pull out their money, the scammers then invented fees such as a "credit score improvement fee" or a "blockchain verification fee" or an "escrow fee" that required the victims to put in more cryptocurrency but never allowed them to withdraw anything.

During the course of its investigation, OAG secured Tether Limited's voluntary agreement and cooperation to freeze the stolen USDT, and the Queens County District Attorney's Office secured a search warrant to freeze USDC stolen in the scam. Because the cryptocurrency has been frozen, it is available to be recovered and returned to the scammers' victims under court approval.

In the lawsuit, Attorney General James seeks to become the first government regulator to provide notice of litigation by depositing a nonfungible token (NFT) into the wallets used to steal the victims' cryptocurrency. Service by NFT will provide the scammers with notice of the litigation by giving them a link to an OAG website containing all of the pleadings. No other state or federal regulator has served a lawsuit using this method before.

Attorney General James encourages New Yorkers who believe they are a victim of a text message scam involving fake remote work job opportunities to file an online complaint with her office.

Attorney General James thanks the Queens County District Attorney's Office for referring this matter and assisting OAG with the investigation and digital asset tracing.

Attorney General James also thanks the U.S. Secret Service for their assistance in this matter.

This matter is being handled by Assistant Attorneys General Shantelee Christie and Jonathan Bashi, with assistance from Principal Accountant Shalendra Ramadhin, Legal Assistants Charmaine Blake and Eddie Aguilar, all of the Investor Protection Bureau, and Senior Detective Brian Metz of the Investigations Division. The Investor Protection Bureau is led by Bureau Chief Shamiso Maswoswe and Deputy Bureau Chief Kenneth Haim and is a part of the Division for Economic Justice, which is led by Chief Deputy Attorney General Chris D'Angelo and overseen by First Deputy Attorney General Jennifer Levy.

Public link

Please use the above public link if you want to share this noodl on another website.