US prosecutors in California have seized millions of dollars from bank accounts and cryptocurrency wallets linked to Capstone, a Montana payments company. Capstone, operating as a money services business, is alleged to have misrepresented itself as an information technology company to major banks, including Wells Fargo and JPMorgan Chase, when opening accounts. These actions form the basis of a civil forfeiture filing by federal prosecutors.
The filings accuse Capstone of processing numerous payments for two crypto companies via an agreement with a Dominica bank. Prosecutors further allege Capstone engaged in a scheme impersonating FBI agents to defraud victims, converting the illicit cash proceeds into cryptocurrency. Brian Klein, a lawyer for Capstone from Cooley law firm, denies these allegations, citing “numerous fatal flaws” in the government’s theories. He added that Capstone has cooperated with the investigation and seeks a quick resolution.
Tether, confirming its status as a customer of the Dominica bank, stated it was unaware of Capstone’s alleged fraudulent activities. A spokesperson for Tether affirmed the company had “no knowledge of the conduct by Capstone alleged by the Department of Justice,” also noting its assets held at the bank were limited. The Justice Department’s court filings do not allege any wrongdoing by other involved firms, including Tether or the banking institutions.
Specific seizures include nearly US$81 million from Capstone’s Wells Fargo accounts and US$2 million from a JPMorgan account. Approximately US$1.2 million worth of Tether’s dollar-pegged token was also confiscated. Spokespeople for both Wells Fargo and JPMorgan Chase declined to comment on the matter.
