The U.S. Department of Justice seized $7.1 million in Crypto Assets, related to a $97 million cross-border fraud case.

Geoffrey Auyeung from Newcastle, Washington, has been charged with Money Laundering for allegedly transferring proceeds from a fraudulent oil and gas investment scheme through Crypto Assets. Federal prosecutors tracked and seized $7.1 million worth of Crypto Assets to help victims recover their losses.

Investment fraud suspected of Money Laundering through Crypto Assets Auyeung faces charges of conspiring with others to commit Money Laundering, linked to a $97 million fraud case that promised to generate profits for investors through the leasing of tank storage facilities located in Houston and Rotterdam. Victims remitted funds to fake escrow companies that masqueraded as escrow agents, including Sea Forest International, Apex Oil, and Gas Trading.

U.S. Assistant Attorney Teal Luthy Miller stated in a statement on Tuesday: "The co-conspirators of this scam transferred illicit proceeds through various Crypto Assets accounts, attempting to launder the money stolen from victims."

Funds circulate through multiple accounts and encryption wallets The prosecutor accused that funds were transferred through American banks, foreign accounts, and at least 19 crypto assets wallets, some of which are associated with IP addresses and exchanges from Russia and Nigeria.

This case highlights the increasing use of Crypto Assets in international fraud and Money Laundering networks, particularly in jurisdictions with loose or hostile regulations. Furthermore, this case also demonstrates the U.S. Department of Justice's growing reliance on blockchain tracking technology to trace assets related to transnational financial crimes.

Blockchain tracking has become a powerful tool in combating transnational financial crime Andrew Lunardi, Head of Growth at Immutable and author of "Magic Money," stated in an interview with Decrypt: "Tracking funds on a public blockchain is often easier than traditional finance. The blockchain provides an immutable record of every transaction."

Lunardi further stated that it is this transparency that makes blockchain forensics a powerful tool in criminal investigations. "By utilizing advanced intelligence tools such as Chainalysis, in-depth investigations can be conducted to accurately trace the flow of funds across the entire spectrum of digital assets."

Case Background and the Involved Crypto Assets Exchange The investigation by the U.S. Department of Justice found that Auyeung controlled a series of fake companies that were used to layer transactions and conceal the source of funds, "at least in part for the purpose of hiding and disguising the nature, location, source, ownership, and control of the proceeds of wire fraud," prosecutors wrote in a 2024 indictment.

It is reported that Auyeung transferred the victims' deposits through more than 80 bank accounts and nearly 20 crypto wallets, ultimately converting the funds into Bitcoin, Ethereum, USDT, and USDC.

Several transactions were conducted through domestic banks and CEX in the United States.

Other transactions were traced to accounts associated with IP addresses from Russia and Nigeria, with some funds ultimately flowing into exchanges accused of facilitating Money Laundering for terrorist organizations and sanctioned entities.

Conclusion This case reveals the growing importance of Crypto Assets in money laundering and transnational financial crimes, as the transparency of blockchain enables law enforcement to effectively trace illegal fund flows. With increasingly stringent regulation of Crypto Assets, they may become a more effective tool for tracking and recovering funds from financial crimes in the future.