DOJ Recovers $7.1M in Crypto from $97M Oil & Gas Investment Scam Using Blockchain Analytics

A federal investigation into a massive transnational fraud scheme has led the U.S. Department of Justice (DOJ) to recover $7.1 million in cryptocurrencies from an alleged $97 million oil and gas investment scam. Geoffrey Auyeung, a Washington State resident, faces charges of conspiring to launder illicit proceeds from the fraud, which purported to generate profits by leasing oil storage tanks in Houston and Rotterdam. Prosecutors allege the scheme involved shell companies such as Sea Forest International and Apex Oil and Gas Trading, which operated as fake escrow agents to defraud victims.

The DOJ’s announcement on Tuesday detailed how Auyeung allegedly orchestrated a complex laundering network, routing funds through U.S. banks, foreign accounts, and at least 19 cryptocurrency wallets. Some of these accounts were linked to IP addresses and exchanges in Russia and Nigeria, jurisdictions known for harboring illicit financial activity. The indictment states that the defendants aimed to obscure the origin of the funds by layering transactions through over 80 bank accounts and nearly 20 crypto wallets, ultimately converting the proceeds into Bitcoin, Ethereum, Tether, and USD Coin.

Acting U.S. Attorney Teal Luthy Miller emphasized the DOJ’s use of blockchain analytics to trace and recover assets. “The co-schemers in this fraud moved their ill-gotten gains through various cryptocurrency accounts to try to launder the money stolen from victims,” Miller said in a statement. The case underscores the Justice Department’s growing reliance on blockchain forensics to track transnational financial crimes. Andrew Lunardi, author of *Magic Money* and head of growth at Immutable, noted that public blockchains offer an “immutable record of every transaction,” making them more transparent than traditional financial systems for tracing illicit flows.

Prosecutors highlighted how the scheme exploited loosely regulated jurisdictions to facilitate money laundering. The DOJ’s investigation revealed that Auyeung controlled a network of fictitious entities designed to disguise the source of the fraud proceeds. The indictment, unsealed in 2024, accuses him of intentionally obscuring the nature, location, and ownership of the funds to evade detection. The case also illustrates the challenges of combating cross-border fraud, as the defendants leveraged both domestic and international infrastructure to move the proceeds.

Experts have noted that the use of sophisticated blockchain intelligence tools, such as Chainalysis, has become critical in modern criminal investigations. Lunardi explained that these tools enable investigators to “follow the flow of funds with a high degree of precision” across the digital asset landscape. The DOJ’s success in recovering crypto from this case demonstrates the potential of blockchain technology to aid law enforcement in dismantling complex laundering operations. However, the case also highlights the persistent risks posed by cryptocurrency’s role in facilitating illicit finance, particularly when exploited in adversarial jurisdictions.

The indictment of Auyeung marks a significant step in the DOJ’s efforts to hold perpetrators accountable for transnational fraud. As authorities continue to recover assets for victims, the case reinforces the importance of integrating blockchain analytics into criminal investigations. The outcome may also prompt further regulatory scrutiny of cryptocurrency platforms that fail to prevent their use in laundering networks, particularly those with ties to sanctioned entities or terrorist financing operations.