Federal prosecutors in Massachusetts are moving to recover millions of dollars in cryptocurrency connected to an alleged online investment fraud scheme that targeted victims across the United States. The United States Attorney’s Office for the District of Massachusetts announced that it has filed a civil forfeiture action seeking to seize approximately 3,444,470 USDT, also known as Tether, which authorities say represents the proceeds of a fraudulent investment operation and related money laundering activities. The cryptocurrency currently carries an estimated value of about $3.4 million.

The investigation into the scheme began in late 2024 after authorities uncovered a pattern of fraud involving at least four victims, including two residents of Massachusetts as well as individuals from Utah and South Carolina. According to investigators, the victims were manipulated through a sophisticated online investment scam designed to build trust and persuade them to transfer cryptocurrency to accounts controlled by the perpetrators. Officials say these schemes often rely on psychological tactics, where scammers gradually gain a victim’s confidence through repeated conversations before encouraging them to invest in what appears to be a lucrative opportunity.

Court documents allege that the scheme began with messages that appeared to be accidental or misdirected texts. The unknown individuals behind the scam initially contacted victims through regular text messages or encrypted messaging platforms such as WhatsApp and Telegram. Once communication was established, the scammers reportedly cultivated a friendly relationship with the victims, sometimes over extended periods of time. Eventually, they introduced what they described as an exclusive cryptocurrency investment opportunity involving Ethereum that they claimed was backed by physical gold.

Believing the investment opportunity was legitimate, the victims were instructed to purchase Ethereum and transfer it to digital wallets provided by the scammers. Investigators say the victims were led to believe the funds were being placed into a legitimate investment platform. Instead, authorities allege that the cryptocurrency was routed through intermediary wallets controlled by the perpetrators. From there, the funds were converted from Ethereum into Tether and moved through additional unhosted wallets in an effort to conceal their origin and ownership.

Federal authorities ultimately traced and seized 3,444,470 USDT connected to the scheme during operations carried out in February and March of 2025. The civil forfeiture action now filed in federal court seeks to formally recover those funds so they can potentially be returned to victims once legal proceedings are resolved.

Using wire communications as part of a scheme to defraud individuals or obtain money through false pretenses violates federal law. Prosecutors also noted that conducting financial transactions designed to conceal the source, location or ownership of criminal proceeds is a form of money laundering under federal statutes. Through civil forfeiture proceedings, the government can seize assets believed to be connected to criminal activity, while also allowing any third parties who may claim ownership to present their claims before the court determines the final disposition of the property.

Authorities emphasized that this case is part of a broader effort by the U.S. Attorney’s Office to track and recover cryptocurrency connected to fraud schemes that target Massachusetts residents and others across the country. As digital investment scams continue to grow in sophistication, investigators say recovering stolen funds and disrupting these operations remains a priority.

The announcement was made by United States Attorney Leah B. Foley and Ted E. Docks, Special Agent in Charge of the FBI’s Boston Field Office. Investigators also received assistance from the Woburn Police Department and the New England State Police Information Network. The civil forfeiture case is being handled by Assistant U.S. Attorney Matthew M. Lyons of the Asset Recovery Unit.

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