Brooklyn prosecutors have dismantled the core online infrastructure of a far-reaching cryptocurrency investment fraud that preyed on Russian-speaking residents of the United States, with a disproportionate number of victims in Brooklyn itself.
District Attorney Eric Gonzalez disclosed on October 14, 2026, that his office’s Virtual Currency Unit, working alongside the FBI, carried out one of the most extensive cyber disruptions ever mounted by a local prosecutor’s office.
The action neutralized 241 fraudulent domains and more than 100 cloud servers that powered the scheme.
The operation, executed last week across multiple time zones, followed a three-year investigation. Prosecutors determined that the fraudsters relied on cyber infrastructure and internet protocol addresses concentrated in Ukraine and other parts of Eastern Europe.
By seizing or disabling servers hosted by companies in both Eastern Europe and the United States, investigators cut off the criminals’ access to the data, victim records, and software needed to keep the platforms running.
Earlier efforts by the same unit had already taken down roughly 400 related domains, but new sites continued to appear quickly.
Targeting the underlying servers was intended to slow that cycle and hinder the scammers from contacting existing victims.
The scheme typically began with Russian-language advertisements on Facebook that promoted investment opportunities.
Individuals who responded received telephone calls from people posing as investment advisers who spoke Russian.
These callers guided victims through the process of opening accounts on cryptocurrency investment websites, purchasing digital assets, and transferring them to addresses controlled by the fraudsters.
For weeks or months, the platforms displayed what appeared to be growing account balances.
When victims tried to withdraw their money, they found their accounts locked or were told they must pay additional fees and taxes before any funds could be released.
Investigators estimate that the operation extracted tens of millions of dollars overall, with some individuals losing their entire life savings.
Brooklyn’s large Russian-speaking population made the borough especially hard-hit relative to the rest of the country.
Data recovered from the servers also showed that the same group ran a follow-on recovery scam: weeks after the initial theft, the criminals contacted victims again and offered to help retrieve the stolen cryptocurrency in exchange for further payments.So far, the district attorney’s office has recovered approximately $300,000 in stolen funds and continues efforts to reclaim more.
Gonzalez emphasized that criminals operating from abroad are not beyond the reach of local law enforcement when they target Brooklyn residents.
He credited the Virtual Currency Unit with identifying the fraud, tracing the cryptocurrency, and mapping the supporting infrastructure before partnering with the FBI to dismantle it.
The FBI’s New York office described the case as a demonstration of effective cooperation among local, federal, and international partners.
The investigation was led by Assistant District Attorney Alona Katz, chief of the Virtual Currency Unit, along with colleagues and analysts in the digital evidence lab. Prosecutors thanked the FBI as well as Shadow Server, Coeus, and UltaHost for their assistance. While the disruption has significantly impaired the group’s ability to operate, authorities continue working to identify additional victims and recover assets.
