Attorney Leslie Sammis has successfully challenged Volusia County’s seizure of 1.19121 BTC from an EU-licensed brokerage’s Kraken account.
The seizure warrant was never assigned a case number or filed with the clerk of court.
Authorities must return all crypto, retrieve $95,030.59 sent to Wisconsin, and pay legal fees.
Authorities in Volusia County were compelled to return seized crypto and pay legal fees after a botched confiscation targeting a foreign business owner exposed serious procedural violations and lack of evidence.
Attorney Leslie Sammis of Sammis Law Firm represented the EU-licensed brokerage company, whose Kraken account was frozen and seized in April.
The case details were revealed in a Tuesday post by the law firm, highlighting what Sammis called “the strange world of civil asset forfeiture.”
The crypto seizure began after authorities in Wisconsin and Florida traced a $20,000 fraud to a Kraken account belonging to the brokerage company.
Although the company had no knowledge of the fraud and fully cooperated with both investigations, its Kraken account, holding over $450,000 in crypto at the time, was abruptly frozen on March 28, with the crypto eventually rising in value to more than $700,000.
Florida’s Volusia County Sheriff secured a sealed seizure warrant on April 9 for 1.19121 BTC, instructing Kraken to transfer the funds to a state-controlled wallet and liquidate it into U.S. dollars.
Wisconsin issued a similar order for 0.93733 BTC, but lacking the infrastructure to receive crypto directly, authorities there relied on Volusia County to sell part of the seized Bitcoin and send a check for $95,030.59 under a loosely defined mutual aid agreement.
But attorney Leslie Sammis uncovered that the Florida seizure warrant lacked a case number, was never filed with the court, and offered no proper documentation, raising serious due process concerns.
Her investigation using blockchain tracing software revealed no link between the alleged $20,000 fraud and her client’s wallet.
After Sammis detailed the legal flaws in the seizure and warned of potential litigation, the Volusia County Sheriff’s Office agreed to undo the damage by restoring the remaining crypto to the client, retrieving the $95,030.59 sent to Wisconsin, and covering attorney fees.
One of the original fraud victims had been deceived by criminals posing as the “Board of Governors of the Federal Reserve System” who distributed counterfeit asset seizure notifications.
“However, since the government does forfeit property in unusual ways, this ridiculous scam was unfortunately successful at tricking the victim,” Sammis wrote.
The fake government impersonation is part of a broader pattern of crypto scams exploiting official-sounding agencies.
On Monday, Arizona resident Vincent Mazzotta pleaded guilty on Monday to money laundering and obstruction charges in a $13 million investment fraud.
The scam saw Mazzotta establish a bogus “Federal Crypto Reserve” to scam people, collecting fraudulent investigation fees from those he had already defrauded.
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