Elyria man loses life savings in cryptocurrency con, feds say

CLEVELAND, Ohio — An elderly Elyria man lost more than $400,000 in a cryptocurrency scam in which conmen used crypto giant Tether to launder the money, according to federal prosecutors.

The scam cost the man his life savings, and he and his wife are now living off Social Security and assistance from family, prosecutors said.

Investigators seized the cryptocurrency and on Thursday asked a federal judge to order the money returned to the owner through civil forfeiture. The case is assigned to U.S. District Judge Pamela Barker.

Investigators traced the $408,000 in cryptocurrency stolen from the Elyria man to accounts that prosecutors say contained another $539,000 worth of stolen or laundered cryptocurrency.

Prosecutors asked the judge to order the $947,000 worth of cryptocurrency to be forfeited to the government.

The discovery came as the FBI in Cleveland is investigating cryptocurrency scams in Northeast Ohio and across the country. It’s the second time in two months that prosecutors in Cleveland sought to seize stolen cryptocurrency that was laundered through cryptocurrency giant Tether, the largest trader in stablecoin, which is linked to the U.S. dollar, court records said.

Investigators say the scams typically occur through phone calls, text messages or messages sent via social media or dating apps.

In the Elyria man’s case, he got an alert in October 2023 on his Macbook screen that said his laptop was compromised and directed him to call a phone number. He called the number and spoke with two men who pretended to work for Apple.

The scammers told the man someone stole more than $80,000 from him, likely someone from Russia or China.

The man gave the scammer full remote access to his computer after the scammer said he could help secure the rest of the man’s money, according to court records.

The scammers wired money from the man’s bank to a virtual currency account, then transferred money out of that account to other cryptocurrency wallets, court records say.

Tether froze the wallets until authorities could get a judge to sign off on seizing the currency.

In October, prosecutors filed a similar civil forfeiture case seeking to have $200,000 in cryptocurrency forfeited that was stolen from an Ashtabula man.

Adam Ferrise covers federal courts at cleveland.com and The Plain Dealer. You can find his work here.