Law enforcement officials from both the United States and Brazil have seized more than $20 million in crypto funds from an online scam that is alleged to have defrauded thousands of investors. The joint project between both nations went under the name Operation Egypto, and a primary suspect is now in custody and awaiting further legal action.
Brazil and the U.S. Recover More Than $20 Million
The man allegedly in charge of the scam is known as Marcos Antonio Fagundes, who is now being charged with fraudulent management of a financial institution, money laundering and misappropriation. He is also being charged with violating securities laws. Both the U.S. and Brazil worked hand in hand through what’s called the Mutual Legal Assistance in Criminal Matters treaty.
2020 has been a great year for bitcoin and crypto considering the world’s number one digital currency by market cap is now trading for just under $15,000, though it has also been a year wracked with fraud given how far the coronavirus pandemic has come and continues to go. Some of the biggest attempts at crypto thievery this year have come by way of individuals who sought to take over high-profile Twitter accounts, for example, and send out messages telling followers to send their money to anonymous addresses in the hopes that it would be doubled.
Others have attacked specific individuals or online databases, as in the case of President Donald Trump’s campaign site. While the scam only lasted around 30 minutes or so, it is clear the line between cyberthieves and their victims is getting thinner.
Fagundes was likely active between August of 2017 and May of 2019. The process behind the internet scam involved locating and egging users on and persuading them to invest in what he and his team of conspirators told them were new “financial opportunities.” Individuals would then forward either fiat or crypto to Fagundes, believing that the money would be invested into companies that he owned, which were ultimately designed to invest in virtual currencies.
While it is believed that certain amounts of these funds did go into crypto platforms, the rest was utilized to pay for lavish gifts that Fagundes and his associates bought for themselves, meaning investors ultimately saw their money go down the drain and produce zero returns.
A Lot More Money in Question
In a statement, the Department of Justice explained:
To carry out the scheme, the conspirators are alleged to have made false and inconsistent promises to investors about the way the funds were invested and exaggerated the rates of return.
While the DOJ and the FBI – which was also part of the investigation – are currently holding onto the recovered crypto funds, it is estimated that customers handed over as much as $200 million in financial investments. Both departments are presently working on redistributing the crypto funds back into original owners’ hands.