The Justice Department has initiated a civil forfeiture action targeting more than $5 million in bitcoin, which authorities allege are proceeds from SIM swapping scams that affected victims across the United States. U.S. Attorney Jeanine Ferris Pirro announced the filing of the complaint.
According to details in the complaint, the funds can be traced to cryptocurrency thefts from five individuals’ wallets. These incidents occurred between October 29, 2022, and March 21, 2023.
Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division and FBI Special Agent in Charge Brett D. Skiles of the Miami Field Office joined Pirro in making the announcement.
Authorities explained that those responsible for these thefts used SIM swapping tactics to gain unauthorized access to victims’ cryptocurrency accounts and move funds into accounts they controlled.
A SIM swap attack involves exploiting weaknesses in multi-factor authentication by transferring a victim’s phone number to a SIM card managed by an attacker. This allows perpetrators to intercept authentication codes sent to the victim’s phone, enabling them to impersonate victims and make unauthorized transactions from their accounts.
After each theft, stolen assets were moved through several cryptocurrency wallets before being consolidated into one wallet that funded an account at Stake.com, an online casino. Many transactions were circular—funds cycled back to their original source—a method often used for money laundering purposes.
Between March 20 and March 22, 2023, after some victim funds were pooled into a single wallet, this wallet and the Stake.com account conducted at least 32 circular transactions involving repeated deposits and withdrawals of bitcoin. Such activity is intended to obscure where funds originated by increasing transaction volume and making balances appear legitimate.
The Justice Department encourages those seeking information on SIM swapping or prevention tips to visit www.ic3.gov/PSA/2024/PSA240411.
Trial Attorneys Jessica Peck and Gaelin Bernstein from the Computer Crime and Intellectual Property Section (CCIPS), along with Assistant U.S. Attorneys Kevin Rosenberg, Alexandra Hughes, and Asset Forfeiture Coordinator Rick Blaylock Jr., are prosecuting this case.
CCIPS collaborates with domestic and international law enforcement agencies as well as private sector partners in its cybercrime investigations. Since 2020, CCIPS has secured convictions against over 180 cybercriminals and facilitated court-ordered returns exceeding $350 million for victims.
