BROOKLYN, October 15 — Brooklyn District Attorney Eric Gonzalez’s office, working with the FBI’s New York field office, disrupted a multinational cryptocurrency-scam network that had stolen tens of millions of dollars from Americans, primarily targeting Russian-speaking residents in Brooklyn and across the United States. The operation concluded a three-year investigation that began in 2022 and resulted in the seizure of 112 computer servers and the shutdown of 241 websites tied to crypto-fraud schemes.
These servers were hosted by companies in Eastern Europe and the United States, with infrastructure traced to Ukraine and other Eastern European countries through IP addresses and cyber infrastructure. The scams began with Russian-language Facebook advertisements promoting fraudulent investment opportunities, luring victims to fake trading platforms where they were instructed to purchase and send cryptocurrency.
After attempting to withdraw funds, victims encountered locked accounts or were pressured to make additional payments under false pretenses of taxes, fees, or recovery services, a tactic described as a ‘recovery scam.’ The Brooklyn DA’s Virtual Currency Unit, established in 2023 by District Attorney Eric Gonzalez and led by Assistant District Attorney Alona Katz, spearheaded the effort. Katz’s unit had previously seized 70 web domains in June 2024 tied to a separate scam that stole $5 million from U.S. residents.
Prior to last week’s operation, the unit had disrupted or seized a total of 400 web domains related to crypto investment fraud. The FBI reported that in 2025, U.S. losses from cryptocurrency fraud reached $11.4 billion, representing a 22% increase from the previous year, with over 18,000 individuals reporting losses exceeding $100,000 each.
No arrests were announced in connection with the server seizures and website takedowns. The operation required coordination across three time zones and involved executing search warrants to disable the fraud network’s backend infrastructure, which prosecutors stated deprived scammers of access to victim data, operational software, and domain content. District Attorney Eric Gonzalez emphasized the importance of involving subject matter experts early in the investigation, while James Barnacle, head of the FBI’s New York office, affirmed the collaborative effort to dismantle the scheme.
Alona Katz stated that seizing the servers disabled the back end of the operation, preventing the scammers from creating new websites or contacting victims. Looking ahead, prosecutors will continue to trace the flow of seized digital assets and monitor for attempts to rebuild the network using alternative infrastructure. The case remains under active review by the Brooklyn DA’s office as part of its ongoing focus on financial fraud and consumer protection in cryptocurrency markets.
