DOJ highlights three crypto fraud cases as AI scams surge

The Justice Department’s Criminal Division released its 2025 Year in Review on Thursday, highlighting three cases in which cryptocurrency figured prominently in alleged fraud schemes. Prosecutors charged 265 defendants tied to more than $16 billion in intended losses – more than double the prior year – and reported growing use of digital assets to move or conceal proceeds from traditional crimes.

The Fraud Section operates four units covering foreign bribery; market, government, and consumer fraud; health and safety; and health care fraud. The health care team has led several recent seizures that included cryptocurrency.

In one case, Tyler Kontos, Joel “Max” Kupetz, and Jorge Kinds were charged in an alleged $1 billion amniotic wound–allograft scheme that generated more than $513 million in improper Medicare payments, according to the department. Charging documents describe the defendants targeting elderly and terminally ill patients with medically unnecessary grafts. Subsequent seizures totaled more than $7.2 million in assets, including bank accounts and cryptocurrency.

The department also detailed last year’s National Health Care Fraud Takedown, which it called the largest in its history. In that operation, 324 individuals were charged in schemes involving more than $14.6 billion in intended losses, and authorities seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets.

In a separate crypto-investment matter, Travis Ford, former CEO of Wolf Capital, was sentenced in November to 60 months in prison. According to the department, he raised about $9.4 million from roughly 2,800 investors by promising “1–2% daily returns” and diverted funds for personal use.

Lawmakers are moving to address crypto-related fraud. Last month, Senators Elissa Slotkin of Michigan and Jerry Moran of Kansas introduced the bipartisan SAFE Crypto Act, which would create a federal task force within 180 days to coordinate efforts across agencies and industry to reduce fraud tied to digital assets.

State officials are also pushing for tighter oversight. Manhattan District Attorney Alvin Bragg this month urged New York lawmakers to criminalize unlicensed cryptocurrency businesses, citing a $51 billion criminal economy that exploits gaps in regulation.

Industry analysts point to AI as a driving force behind the speed and scale of modern fraud. “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,” said Ari Redbord, VP and Global Head of Policy at TRM Labs. He described the “industrialization of money laundering,” with professional networks acting as shared infrastructure for scam operations, ransomware groups, drug-trafficking organizations, North Korean cyber actors, and sanctions evaders. “Looking ahead, AI-enabled fraud will continue to shape enforcement priorities, from schemes built around AI-trading narratives to synthetic and tokenized investment structures designed to manufacture trust,” Redbord added.

Recent takedowns and asset seizures show the department tracing and recovering digital assets alongside cash, vehicles, and other property.