Crypto scam recovery: Over $670,000 BTC and the Arrest of Two Nigerian Scammers
Background:
In 2021, our client Paul, an investor from the United States, fell victim to a highly sophisticated crypto scam that resulted in the loss of nearly 10 Bitcoin (BTC). In the beginning, Paul invested small amounts into a trading platform that seemed legitimate, but turned out to be a fake trading platform. As he saw his returns on investment grow, he invested more totaling $323,000 USD in Bitcoin and Ethereum between March and June 2021.
(By the time we recovered his losses, the value of his stolen assets had risen to over $670,000, due to the increase in Bitcoin prices.)
The scammers developed a convincing fake trading platform that impersonated legitimate ones. This and the supposedly large returns on investments led Paul to trust the platform. After the scammers established trust between themselves and Paul, they asked Paul to transfer his cryptocurrency to an “offline wallet” that they controlled. They presented this fake wallet as a secure storage solution. Paul remained in contact with the scammers for weeks, until the fake platform’s “support team” ended all communication. Paul was cut off and unable to access or retrieve any of his funds.
The Investigation:
After Paul realized he fell victim to a crypto trading scam, and that he lost all his assets, he asked his local law enforcement for help. But due to the complexity of the crime, especially with the international dimensions of this case, they were reluctant to act. Thankfully, a friend of Paul recommended Rexxfield, and we started working on Paul’s case in January 2022.
Within 48 hours of starting our investigation, we were able to:
- Trace the scammer’s laundering efforts and locate significant cryptocurrency balances in wallets held by a major exchange;
- Request a temporary freeze on these assets, pending an official request from law enforcement or a prosecutor;
- Engage with the scammers directly by posing as potential victims, successfully counter-grooming the perpetrators into revealing additional wallets under their control;
- Capture digital artifacts from the devices used by the low-level scammer who victimized our client;
- Locate the scam syndicate’s administrator to an address in Canada; and
- Locate the low-level scam operators who contact and groom the victims, to Lagos, Nigeria.
Our investigation identified three crime nexuses:
- A U.S. state on the West Coast, where Paul resided.
- A Canadian province, home to the scam’s orchestrator.
- Lagos, Nigeria, where high-volume operators worked to groom victims like Paul.
On January 27, 2022, we provided an affidavit to a Canadian cyber-crime unit, outlining the social-engineering techniques and evidence we had gathered. The next day, we presented our findings in a meeting with a U.S. Federal Law Enforcement Special Agent and a Canadian cyber-crime investigator. During this meeting, we shared all our investigation findings through blockchain analysis and open-source intelligence.
Scammers Arrest and Asset Recovery:
Our investigation led to the identification of three Nigerian individuals who we believed to be behind the scam. We worked closely together with the Nigerian Economic and Financial Crimes Commission (EFCC), which resulted in the arrest of two suspects: 22-year-old Christopher (redacted) and 24-year-old Chinedu Ujukwu.
The third suspect, 22-year-old Kingsley Obiegbu, remains at large, though the EFCC is actively pursuing his arrest.
On April 17, 2024, the Utah State Bureau of Investigation completed the civil forfeiture process, and the stolen Bitcoin, valued at over $670,000 at the time, was successfully returned to Paul.
The Need for Collaboration Between Investigators and LEA worldwide
Thanks to our crypto investigation and the commitment and action of the U.S., Canadian, and Nigerian law enforcement agencies, we were able to recover Paul’s stolen crypto and the EFCC could arrest two of the scammers. This case highlights the importance of a) specialized investigative techniques to protect victims and hold criminals accountable, and b) the need for collaboration between private investigators and law enforcement globally. Thanks to our expert investigators, and the willingness of local law enforcement to work with us, we were able to make this crypto recovery a reality.
If you lost your assets to scammers, please contact us to see if we can help.