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Brooklyn DA<\/p>\nNEW YORK (BLOOMBERG) — The Brooklyn District Attorney\u2019s office has disrupted a multinational cryptocurrency-scam network centered in Eastern Europe, capping a years long effort to stop a fraud operation that has stolen tens of millions of dollars from Americans.<\/p>\n
The operation, conducted last week, shut down 241 websites linked to crypto-fraud schemes, according to the Brooklyn DA\u2019s office. Law enforcement officials seized 112 computer servers controlled by the fraud group that were hosted by Eastern European and American companies.<\/p>\n
Many of the scams targeted Russian-speaking residents of Brooklyn and throughout the US. The investigation into the scam network, which began three years ago, found that a large number of victims had responded to a Facebook ad peddling investment opportunities. Investigators discovered that the network used cyber infrastructure and Internet protocol addresses in Ukraine and other Eastern European countries.<\/p>\n
The operation was led by the Brooklyn DA\u2019s Virtual Currency Unit, which worked alongside the Federal Bureau of Investigation\u2019s New York field office. The unit \u201cidentified the fraud, tracked down stolen cryptocurrency, was able to pinpoint the scammers and broke new ground by seizing the servers used by this crime syndicate,\u201d Brooklyn District Attorney Eric Gonzalez said in a statement to Bloomberg.<\/p>\n
The Brooklyn DA office was \u201cswift to involve our subject matter experts and together we got to the bottom of the plot,\u201d said James Barnacle, head of the FBI\u2019s New York office.<\/p>\n
The Brooklyn prosecutors executed search warrants and worked across three time zones to disable the network. Disrupting the servers deprived the scammers of access to the data that populated their web domains, victim information, and their operational software, said the DA\u2019s office.<\/p>\n
Crypto fraud has exploded<\/a> in recent years. In 2025, reported US losses from cryptocurrency fraud reached $11.4 billion, up 22% in a year, according to the FBI. More than 18,000 people reported losing more than $100,000.<\/p>\n Local law-enforcement offices have struggled<\/a> to keep up with the surge<\/a> in fraud, much of which originates overseas<\/a>. Gonzalez created the specialized Virtual Currency Unit to crack down on crypto scams in 2023. Led by Assistant District Attorney Alona Katz, the unit started chasing the scam network because many of the scammers\u2019 victims were from Brooklyn\u2019s large Russian-speaking communities.<\/p>\n In June 2024, Katz\u2019s team seized 70 web domains used by scammers to steal $5 million from US residents. Not including last week\u2019s operation, the unit has seized or disrupted 400 web domains related to crypto investment fraud.<\/p>\n Seizing the servers behind the fraud network can cripple its ability to create new sites and contact victims. By taking out the fraudsters\u2019 servers, \u201cwe disabled the back end of the operation,\u201d said Katz.<\/p>\n