DOJ Highlights Cryptocurrency's Growing Role in Major Fraud Cases

Source: CryptoNewsNet Original Title: DOJ Flags Three Crypto Cases in ‘America First’ Push Against Fraud Original Link: The U.S. Department of Justice highlighted three high-profile fraud cases where cryptocurrency played a material role in its 2025 Year in Review, released Thursday, noting heightened enforcement as digital assets become embedded in traditional fraud schemes.

The cases emerged from a record-breaking year where prosecutors charged 265 defendants with an aggregate intended fraud loss exceeding $16 billion, more than double last year’s total, according to the DOJ’s Criminal Division Fraud Section report.

The Fraud Section operates through four specialized units: the Foreign Corrupt Practices Act Unit, the Market, Government, and Consumer Fraud Unit, the Health and Safety Unit, and the Health Care Fraud Unit, which oversees health care fraud cases that have included seizures of crypto.

The report highlights the growing role of crypto in large-scale fraud operations.

In one such case, Tyler Kontos, Joel “Max” Kupetz, and Jorge Kinds were charged over a $1 billion amniotic wound allograft fraud scheme that allegedly drove more than $600 million in improper Medicare payments. Prosecutors say the defendants targeted elderly and terminally ill patients with medically unnecessary grafts, and authorities later seized over $7.2 million in assets, including bank accounts and crypto.

The Justice Department also noted last year’s National Health Care Fraud Takedown, the largest in Department history, where 324 individuals were charged in schemes involving over $14.6 billion in intended loss. During that operation, authorities “seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets.”

Last November, Travis Ford, former CEO of Wolf Capital, was sentenced to 60 months in prison for a $9.4 million crypto investment fraud that targeted about 2,800 investors, after promising “1-2% daily returns” and diverting funds for personal gain, the DOJ said.

The enforcement actions come as Congress moves to address crypto fraud. Last month, Senators Elissa Slotkin (D-MI) and Jerry Moran (R-KS) introduced the bipartisan SAFE Crypto Act, which would establish a federal task force within 180 days aimed at reducing crypto scams through cross-sector coordination.

Manhattan District Attorney Alvin Bragg also urged state lawmakers this month to criminalize unlicensed crypto operations, warning that a $51 billion criminal economy is thriving in regulatory blind spots.

“The most important shift right now is speed. We’ve seen roughly a 500% increase in AI-enabled fraud, and that increase isn’t just about volume—it’s about how fast criminal operations can now move,” according to industry policy experts.

Experts warned that criminal groups are “no longer improvising” but instead “running highly optimized, industrial operations that can steal and launder funds in hours rather than weeks.”

That speed has driven what has been called the “industrialization of money laundering,” where professional laundering networks now operate as “shared infrastructure for scam networks, ransomware groups, drug trafficking organizations, and sanctions evaders.”

Looking ahead, AI-enabled fraud will continue to drive enforcement priorities, from scams built around AI trading narratives to synthetic and tokenized investment schemes designed to manufacture trust.