$7.1M might be returned to victims of crypto-powered oil and gas scheme

Law enforcement continues to work on returning money to victims of crypto scams, with the latest example involving an oil and gas-related investment fraud scheme.

The US Attorney’s Office, Western District of Washington, said that it seeks to forfeit $7.1 million in crypto assets seized during the investigation of the scheme. However, Homeland Security Investigations has managed to seize only 7% of the funds taken by the criminals between June 2022 and July 2024.

If the forfeiture is approved, the seized money will be distributed to victims of the fraud. According to the attorneys, for now, dozens of victims have been identified, who collectively lost around $18 million in crypto assets. However, these numbers are estimated to grow.

Meanwhile, Newcastle, Washington resident Geoffrey K. Auyeung, 47, has been charged with receiving much of the stolen funds in the scheme. Law enforcement seized $2.3 million from his bank accounts.

Also, the seized crypto accounts were linked to unnamed individuals in Russia and Nigeria.

The attorneys claim that the criminals moved the stolen funds to one or more of at least 81 different accounts at financial institutions, moved offshore, or moved to one or more of at least 19 different crypto accounts. Then, the funds were used to buy various crypto assets, such as bitcoin (BTC), tether (USDT), USD coin (USDC), and ethereum (ETH), before moving much of them to the Binance crypto exchange. Some of the crypto assets were also sent to Russian and Nigerian crypto exchanges. The investigators allege that at least one of the Russian and Nigerian platforms "have facilitated money laundering for transnational criminal organizations – including terrorist organizations and organizations that violate international trade sanctions."

The scheme was operating as follows: the criminals tricked people into sending money, pretending that the funds would be used to buy oil tank storage in either Rotterdam, the Netherlands, or Houston, US.

"The schemers indicated that the investors could make significant profits by renting the oil tank storage they obtained to others," the attorneys said, adding that once the money was sent, victims didn't receive any further information on their investment and co-schemers simply stopped responding.