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Crypto Law/Level IV · Holders' traps/4.2 Scams the law sees/Lesson 5

Recovery scams: the second theft

Why people who have already lost money are targeted again by fake recovery firms, lawyers and agents, what US rules say about upfront recovery fees, and what genuine recovery looks like.

Education, not legal, tax or investment advice. Crypto law differs between countries and states and changes often. Check the current rules where you live with a qualified lawyer or tax adviser before you act.

The lean path

The cheapest, lowest-tax, simplest and most private route the law allows, best first. Each step names the rule it rests on and the condition that keeps it lawful.

  1. Pay no one upfront: the FBI says IC3 and law enforcement never charge victims or refer them to paid recovery firms, and telemarketers may not take recovery fees until seven business days after delivering the money (16 C.F.R. §310.4(a)(3)).
  2. Verify any claimed lawyer free in the state bar directory and any claimed official by calling the agency’s local office yourself; the fee ban exempts licensed attorneys, which is why fakes pose as law firms.
  3. Real recovery runs through free channels: IC3 reports, restitution in criminal cases, and remission petitions under 28 C.F.R. §9.8; people aged 60+ can get filing help at the Elder Justice Hotline, 1-833-372-8311.
  4. A paid licensed lawyer is cheaper overall only when the loss is large and funds sit at a reachable exchange where a court freezing order can bite; no one can reverse a confirmed transfer.

MaterialsFBI public service announcement I-081325-PSA (13 August 2025) on fictitious law firms targeting crypto scam victimsFBI public service announcement ‘FBI Warns of Scammers Impersonating the IC3’ (July 2026 update)16 C.F.R. §310.4(a)(3), the Telemarketing Sales Rule’s ban on upfront recovery feesYour state bar’s online lawyer directory

Wonder

  1. How did they know I had been scammed, and even the exact amounts I sent?
  2. Can anyone really trace and return stolen crypto in exchange for a fee?
  3. How can I tell a real lawyer or government agent from a fake one?

Explore

  1. A recovery scam is advance-fee fraud aimed at people who have already lost money. Someone offers to get the money back, but first asks for a fee, a ‘tax’, a retainer or a ‘verification deposit’. The CFTC notes that the same gang, or another one, often runs both the original scam and the recovery scam, which explains how callers can know exact dates and amounts. The FBI’s 2025 report recorded 10,516 recovery-scam complaints with about $1.4 billion in reported losses, warning that these figures may include losses from the earlier scam that prompted the contact. People aged 60 and over reported about $540 million.
  2. The FBI’s August 2025 alert, updating earlier warnings from August 2023 and June 2024, lists the tactics. Fake firms copy the names and letterhead of real lawyers and law firms. They claim to be official partners of US or foreign government agencies; the FBI states that no law firm is an officially authorised partner of a US government agency. They cite invented bodies such as an ‘International Financial Trading Commission’. They say the victim is on a government list of scam victims, ask for payment in crypto or gift cards, steer victims to fake foreign bank websites, and avoid video calls or showing a licence.
  3. Some recovery scammers pretend to be the FBI itself. An alert first issued in April 2025 and updated in July 2026 describes fake FBI agents contacting victims on Facebook Messenger and Telegram, and AI-generated videos of an FBI leader promoting a spoofed copy of the IC3 complaint website. The FBI’s answer is plain: IC3 has no social media presence, never contacts individuals directly by phone, email, social media or chat, never asks for payment to recover funds, and never refers anyone to a company that charges for recovery. Any contact about a complaint comes from FBI employees at local field offices or other law enforcement officers.
  4. US law targets the business model. The FTC’s Telemarketing Sales Rule, 16 C.F.R. §310.4(a)(3), makes it an abusive practice to request or receive any fee for services represented to recover money lost in a previous transaction until seven business days after the money is delivered to the person. The rule covers telemarketing, meaning campaigns involving more than one interstate phone call, and it does not apply to services provided by a licensed attorney. That exemption helps explain why fake recovery outfits so often pose as law firms. Taking a fee for a promised recovery that never comes is also ordinary fraud, including wire fraud under 18 U.S.C. §1343.
  5. Genuine recovery looks different. Law enforcement does not charge victims. When agencies seize scam proceeds, money returns through court-ordered restitution or a remission process run by the government (lesson 4.2.7), not through a private intermediary demanding a fee. Licensed lawyers can bring civil cases to identify wrongdoers and freeze assets (lesson 9.3.5), and blockchain tracing can show where funds went, but no one can reverse a confirmed transfer (lesson 1.1.6). A real lawyer’s licence can be checked in the directory of the state bar where they claim to practise.
  6. The FBI recommends a ‘zero trust’ approach after any scam: assume an unexpected contact is not who it claims to be until verified. Be especially cautious of firms that reach out to you, above all if you never reported the crime to anyone. Ask for video verification and proof of a law licence, verify anyone claiming to be a government employee by calling the agency’s local office yourself, and keep records and recordings of every contact. Victims aged 60 or over can get help filing an IC3 complaint from the Justice Department’s Elder Justice Hotline, 1-833-FRAUD-11 (833-372-8311).

Key facts

  • The FBI IC3 recorded 10,516 recovery-scam complaints in 2025, with about $1.4 billion in reported losses.
  • FBI alert I-081325-PSA states that no law firms are officially authorised partners of US government agencies.
  • The FBI says IC3 never asks for payment to recover lost funds and never refers people to companies that charge for recovery.
  • 16 C.F.R. §310.4(a)(3) bars telemarketers from taking recovery fees until seven business days after the recovered money is delivered.
  • The Telemarketing Sales Rule’s recovery-fee ban does not apply to services provided by a licensed attorney.
  • The US Justice Department’s Elder Justice Hotline, 1-833-FRAUD-11, helps victims aged 60 or over file IC3 complaints.

Exercise nine, six, three, one

9CollectList up to 9 claims a recovery offer might make, such as official partnership with an agency, knowledge of your losses, a guaranteed result, an upfront fee, secrecy or a foreign bank account.
6ClusterSort them into 6 categories: claimed identity, claimed authority, knowledge of your case, payment demands, secrecy or urgency, and promised results.
3DistillReduce the 6 categories to 3 questions that could be checked independently before any further contact.
1CrystallizeWrite 1 sentence explaining why a stranger who knows the details of your earlier loss is a reason for more caution, not less.

Fact check

Dates, figures and claims checked against the published sources listed below.

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