Last week, Brooklyn prosecutors mounted a coordinated action targeting a cross-border crypto scheme that inflicted dollar losses reaching into the tens of millions on Americans. The DA's office said it dismantled 241 websites tied to the schemes and confiscated 112 servers the group relied on, hosted by providers in Eastern Europe and in the US. While no one was arrested, shutting off the servers cut the operators off from the data that fed their sites, their victim lists, and the software they used to run the fraud.
DA Eric Gonzalez called it "one of the biggest operational cyber disruptions undertaken by a local prosecutors' office." Many of the cons went after Russian-speaking residents of Brooklyn and across the US.
The case began three years ago and was run by the DA's Virtual Currency Unit, formed in 2023 by Gonzalez and led by Assistant District Attorney Alona Katz. Investigators found a common entry point for victims: Facebook ads pitching investment opportunities. They also traced the group's tech footprint to infrastructure and IP addresses in Ukraine and elsewhere in Eastern Europe.
The unit teamed up with the FBI's New York office and executed search warrants while coordinating across three time zones. James Barnacle, who leads that FBI office, said the DA's team was "swift to involve our subject matter experts and together we got to the bottom of the plot." Gonzalez said the unit "identified the fraud, tracked down stolen cryptocurrency, was able to pinpoint the scammers and broke new ground by seizing the servers used by this crime syndicate." Katz added that by taking out the servers, "we disabled the back end of the operation."
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Crypto fraud has ballooned. According to the FBI, reported US losses hit $11.4 billion in 2025, a 22% increase year over year. Over 18,000 individuals reported losing more than $100,000 apiece.
Local offices have struggled to keep pace, especially with scams that originate abroad. That is why Brooklyn stood up a specialized team: before last week's action, Katz's unit had already seized or disrupted 400 web domains tied to crypto investment fraud, including 70 sites in June 2024 that were linked to $5 million stolen from US residents.
Server seizures do more than splash headlines. They hobble criminals' ability to spin up fresh sites and recontact victims, which can slow the spread of copycat scams. For anyone weighing crypto opportunities, the takeaway is simple: the fraud risk is real and growing, and enforcement is getting more surgical about cutting off the back-end machinery that powers these schemes.
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