Brooklyn DA and FBI Take Down 241 Scam Domains and 112 Servers in Crypto Fraud Case, No Arrests Announced

Brooklyn District Attorney Eric Gonzalez announced Wednesday, Oct. 14, that his office's Virtual Currency Unit and the FBI's New York field office had seized or disrupted 241 scam web domains and 112 servers tied to a multinational crypto investment fraud. The case grew out of a three-year investigation.

The targets were Russian-speaking Americans. Brooklyn, home to a very large Russian-speaking population, was hit disproportionately hard compared with the rest of the country, the DA's office said.

Investigators estimate the operation took tens of millions of dollars from victims. Some lost their entire life savings.

How the scam worked

It started with Russian-language advertisements on Facebook promoting investment opportunities. People who responded got phone calls from Russian-speaking callers posing as investment advisers.

The callers walked victims through opening accounts on crypto investment websites, buying digital assets and sending them to addresses the fraudsters controlled. For weeks or months, the platforms showed what looked like growing balances.

When victims tried to cash out, their accounts were locked or they were told to pay more fees and taxes first. Nothing was released.

Data recovered from the servers showed a second act. Weeks after the initial theft, the same group contacted victims again and offered to help recover the stolen crypto for a fee. Gonzalez said the 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."

The takedown

Prosecutors traced the network's infrastructure and IP addresses to Ukraine and other parts of Eastern Europe. The 112 servers were hosted by companies in Eastern Europe and the United States. Investigators executed search warrants across three time zones.

The DA's office said the seized machines held website content, victim data and the software used to run the operation. Assistant District Attorney Alona Katz, who leads the unit, put it this way: "We disabled the back end of the operation."

The office said its earlier work had already disrupted roughly 400 domains tied to crypto investment fraud, but new sites kept appearing fast. Going after servers instead of individual websites is meant to slow that cycle and cut the scammers off from existing victims. A June 2024 action by Katz's unit seized 70 domains linked to $5 million in losses.

James Barnacle, the assistant director in charge of FBI New York, said the DA's office "was swift to involve our subject matter experts and together we got to the bottom of the plot."

What victims have and haven't gotten back

The DA's office has recovered about $300,000 in stolen funds and says it is still working to reclaim more. Against losses in the tens of millions, that is a small fraction.

No arrests have been announced. The operators are described as being based in Eastern Europe, and the announcement covers infrastructure seizures, not charges against individuals.

Gonzalez called the action "one of the biggest operational cyber disruptions undertaken by a local prosecutor's office." The unit launched in 2023 specifically to go after crypto fraud hitting Brooklyn's Russian-speaking communities.

The national picture

The FBI's Internet Crime Complaint Center counted $11.366 billion in crypto-related fraud losses in 2025, up 22% from the prior year. Investment scams accounted for $7.228 billion of that, the same category as the Facebook-to-fake-platform pipeline in this case.

Victims aged 60 and older reported nearly $4.4 billion in losses. More than 18,000 victims reported individual losses above $100,000.

One case, however large for a county prosecutor, is a sliver of that total. The Brooklyn operation is built around a tactic that is cheap for scammers to repeat: spin up a new domain, buy new ads, call new victims. Taking servers offline raises their costs. Whether it stops them depends on whether the people behind the network, reportedly overseas, are ever charged.

Katz has also pushed for state legislation to strengthen prosecution of crypto scams that hit her community, according to one account of her work. The DA's office has not announced what charges, if any, are planned, or whether recovered funds will grow beyond the $300,000 collected so far.