NEW YORK – New York Attorney General Letitia James today issued a consumer alert to warn New Yorkers about tax preparation frauds and to provide tips to avoid common scams during tax season. While scams can take many forms, consumers should be particularly aware of those using artificial intelligence (AI) technologies. With two weeks until Tax Day, Attorney General James is encouraging New Yorkers to stay vigilant to protect their personal and financial information and report suspected scams to the Office of the Attorney General (OAG).
“Scammers are increasingly using sophisticated AI programs to create more deceptive schemes this tax season,” said Attorney General James. “As New Yorkers file their taxes, I encourage everyone to be on the lookout for scammers who try to steal their money and personal information. I encourage everyone to follow the tips from my office and contact us…
THE HASHFLARE “CLOUD MINING” PONZI SCHEME (GLOBAL/ESTONIA)
Date: February 13, 2025 (Guilty Pleas) Perpetrators: Sergei Potapenko and Ivan Turogin
Case Description: This $577 million cryptocurrency fraud remains one of the largest digital asset scams in history, with major legal developments concluding in 2025. Potapenko and Turogin operated “Hashflare,” which they marketed as a massive cryptocurrency mining operation. Hundreds of thousands of victims worldwide purchased “mining contracts,” believing they were renting hash power to mine Bitcoin. In reality, the duo was running a sophisticated Ponzi scheme.
They created fake customer dashboards that showed “real-time” mining profits, but the money being paid out was simply the capital of newer investors. They laundered the proceeds through shell companies to purchase luxury real estate and a fleet of high-end vehicles. After a massive international investigation involving the FBI and Estonian authorities, the pair agreed to forfeit over $400 million in assets. This case underscores the “Cyber-enabled Fraud” warning issued by the FATF in early 2026: as technology evolves, the scale of fraud moves from local millions to global billions in the blink of an eye.
Link to Original: ACFE – High Profile Fraud of 2025