A Washington State man has been indicted for allegedly laundering proceeds from a fraudulent oil and gas investment scheme, as federal prosecutors move to recover $7.1 million in crypto for victims.
Geoffrey Auyeung of Newcastle faces charges for allegedly conspiring to launder funds from what authorities allege was a $97 million fraud that promised investors profits from leasing oil tank storage in Houston and Rotterdam.
Victims reportedly sent money to shell companies posing as escrow agents, including Sea Forest International, Apex Oil and Gas Trading, and others.
“The co-schemers in this fraud moved their ill-gotten gain through various cryptocurrency accounts to try to launder the money stolen from victims,” Acting U.S. Attorney Teal Luthy Miller said in a statement on Tuesday.
Prosecutors allege the funds were routed through U.S. banks, foreign accounts, and at least 19 crypto wallets, with some linked to IP addresses and exchanges in Russia and Nigeria.
The case highlights the growing use of crypto through international fraud and laundering networks, especially those operating across loosely regulated or adversarial jurisdictions.
It also demonstrates the Justice Department’s increasing reliance on blockchain tracing to recover assets associated with transnational financial crime.
“Contrary to popular belief, tracing funds is often easier on a public blockchain than in traditional finance,” Andrew Lunardi, head of growth at Immutable and author of Magic Money, told Decrypt. “Blockchains provide an immutable record of every transaction.”
That transparency, Lunardi said, has made blockchain forensics a powerful asset in criminal investigations.
“Utilizing sophisticated intelligence tools such as Chainalysis allows firms to conduct in-depth investigations at scale, following the flow of funds with a high degree of precision across the digital asset landscape," he said.
The Justice Department's investigation found that Auyeung controlled a network of fake companies used to layer transactions and obscure the source of funds “all with the design, at least in part, to conceal and disguise the nature, location, source, ownership, and control of the wire-fraud proceeds," prosecutors wrote in a 2024 indictment.
He allegedly moved victim deposits through more than 80 bank accounts and nearly 20 crypto wallets, ultimately converting the proceeds into Bitcoin, Ethereum, Tether, and USD Coin.
Several transactions flowed through U.S.-based banks and exchanges, including Gemini and Binance. Decrypt has reached out to both exchanges for comment.
Others were traced to accounts tied to Russian and Nigerian IP addresses, with some funds landing in exchanges alleged to have laundered money for terrorist groups and sanctioned entities.
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