Brooklyn crypto scam bust recovers $300,000 with no arrests

Brooklyn prosecutors and the FBI shut down a multinational crypto investment scam that looted tens of millions of dollars from Russian-speaking Americans.

District Attorney Eric Gonzalez said Wednesday they seized 241 fraud websites and 112 servers and recovered about $300,000 so far. No one was arrested.

Virtual Currency Unit and FBI knock out 112 servers

The DA’s Virtual Currency Unit, or VCU, and the FBI made the takedown. It was one of the largest cyber disruptions orchestrated by a local DA’s office, prosecutors said.

Investigators spent hours last week executing search warrants in three different time zones. The seized servers were held by hosting companies in the United States and in Eastern Europe.

The criminals used cyber infrastructure and IP addresses in Ukraine and other Eastern European nations, the VCU said.

The VCU had taken down 400 scam domains in its three-year investigation, but new sites were popping up almost as fast as the old ones went down.

Hitting the servers cut off the data, victim records and software feeding those sites. It also blocks the scammers from setting up new websites and contacting previous victims.

Russian-language Facebook ads fed victims to fake platforms

The DA’s office said victims were initially targeted with Russian-language Facebook ads hawking investment opportunities. A Russian-speaking caller, posing as an “investment advisor,” instructed each target to open an account on a crypto investment platform.

Victims purchased crypto and sent it to wallet addresses associated with the fake platforms. Balances appeared to have been growing for weeks or months.

Efforts to withdraw funds resulted in locked accounts or demands for additional fees and taxes.

Brooklyn’s large Russian-speaking population meant the borough was struck harder than the rest of the country, prosecutors said. Some victims lost their entire life savings.

The office estimates total losses are in the tens of millions of dollars.

Seized server data uncovered a second layer. A few weeks after the initial theft, the same crew contacted victims again, promising to recover the lost crypto for a fee.

“These criminals stole many millions of dollars from Russian-speaking victims through an elaborate investment scheme, then tried to exploit them again with false promises to recover their money,” Gonzalez said.

James C. Barnacle, head of the FBI’s New York field office, credited swift work by the Kings County District Attorney’s Office. Gonzalez thanked the FBI, Shadow Server, Coeus and UltaHost for their assistance.

Cryptopolitan reported that a 23-year-old Brooklyn resident, Ronald Spektor, was sentenced to up to 12 years in prison for impersonating Coinbase support staff and stealing ~$16 million from approximately 100 victims.

Americans lost $11.4 billion to crypto-related fraud in 2025, up 22% from the prior year, the FBI said. The DA’s office continues to seek to claw back more than the ~$300,000 already seized.