DOJ Files to Recover $47K in Crypto From ATM Fraud Scheme

Computer Warning Led Victim to a Crypto ATM

The U.S. Attorney’s Office civil forfeiture action seeking 47,461.73111 USDT was announced on July 31. Prosecutors allege scammers obtained the cryptocurrency by directing victims to withdraw bank funds and deposit the cash through crypto ATMs.

A Ware, Massachusetts, resident became a target after her computer stopped responding and displayed a pop-up directing her to call customer support. The person answering claimed her bank account had been compromised and instructed her to transfer the money to the government for safekeeping.

The U.S. Department of Justice (DOJ) stated:

“At the direction of the scammers, the victim withdrew funds from their bank account and deposited them into a Bitcoin Depot brand cryptocurrency ATM at a gas station in Ludlow, Mass.”

Money deposited through the Ludlow machine moved to the perpetrators, while investigators later traced part of the proceeds to a cryptocurrency wallet. Authorities seized those funds in March and connected four additional victims of similar schemes to the same wallet address.

Crypto ATM Fraud Draws Congressional Attention

Crypto ATM scams have also drawn attention on Capitol Hill, where the bipartisan Stop Crypto ATM Scams Act was introduced in the U.S. House of Representatives on June 11. The proposed federal legislation has not become law.

If enacted, the bill would establish nationwide consumer protections, including a $2,000 daily transaction limit and a $10,000 total deposit limit for new customers during their first 14 days. It would also require prominent fraud warnings, establish refunds under certain circumstances, and strengthen anti-money laundering and recordkeeping obligations for crypto ATM operators. The proposal followed FBI data showing Americans lost more than $333 million to crypto ATM scams in 2025.

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) and other federal regulators have also increased scrutiny of cryptocurrency kiosks by urging operators to strengthen anti-money laundering controls, monitor suspicious transactions, and identify fraud patterns affecting older and vulnerable consumers. Separate enforcement actions have imposed financial penalties on operators that failed to maintain required compliance programs, reflecting broader efforts to reduce fraud facilitated through cryptocurrency ATMs.

Government impersonation scams frequently rely on manipulated caller identification, fabricated legal threats, and urgent payment demands directing victims to cryptocurrency kiosks. The FBI has warned that criminals use these tactics to convince victims they must immediately transfer funds beyond the reach of banks or law enforcement.

Massachusetts Expands Recovery of Fraud-Linked Crypto

The latest filing follows a March 10 civil forfeiture action seeking approximately $3.4 million in cryptocurrency allegedly connected to an online investment fraud and money laundering scheme. Prosecutors alleged victims were persuaded to purchase ether for an investment falsely presented as being backed by physical gold before investigators traced and seized part of the proceeds.

Another civil forfeiture complaint filed March 2 sought approximately $327,829 in cryptocurrency allegedly linked to laundering proceeds from an online romance fraud scheme. According to court filings, investigators traced the funds through intermediary wallets, where they were converted into USDT before reaching wallets seized by federal authorities in August 2025.

The U.S. Attorney’s Office added:

“This is one of several civil forfeiture actions the U.S. Attorney’s Office has filed seeking to forfeit cryptocurrency traced to fraud schemes targeting Massachusetts victims.”

Civil forfeiture proceedings allow third parties to assert ownership claims before a court determines whether the assets can be forfeited to the United States. If the government prevails and valid claims are resolved, recovered cryptocurrency may be returned to victims of the alleged fraud.