On Saturday, August 29, 2026, the United States government filed a complaint for forfeiture in rem in US District Court for the District of New Mexico, seeking the forfeiture of approximately $2.25 million in US Dollar Tether (USDT). The funds are alleged to be proceeds from narcotics trafficking and money laundering activities.
The complaint, filed by the U.S. Attorney’s Office for the District of New Mexico, identifies the defendant property as USDT held in four specific virtual currency addresses. The action stems from an FBI investigation initiated in February 2025, which involved a confidential human arranging controlled purchases of narcotics
According to the filing, the investigation revealed a scheme where bulk cash proceeds from drug sales were converted into cryptocurrency, then transferred through various virtual currency addresses to obscure their origin and facilitate money laundering. In March 2025, an initial controlled purchase of cocaine was facilitated by the CHS, with USDT being transferred to a cryptocurrency address linked to individuals coordinating with a suspected drug trafficker, Miguel Torres, who is associated with the Mayo faction of the Sinaloa Cartel.
Further details in the complaint describe subsequent bulk
Further details in the complaint describe subsequent bulk cash pickups in Kansas and South Carolina in May 2025. These pickups, totaling over $245,000, were also identified as proceeds from narcotics trafficking. The CHS was directed to convert this cash into cryptocurrency and send it to specific virtual currency addresses, identified as Target Addresses #1, #2, and #3.
The FBI conducted blockchain analysis, tracing the flow of these funds. The investigation indicated that approximately 97% of the funds transferred to Target Address #1 were moved to Target Addresses #2 and #3, consistent with money laundering fees. An additional intermediary step led to Target Address #4, which the FBI alleges has a history of laundering funds linked to the Islamic Revolutionary Guard Corps (IRGC) and proceeds from the February 2025 ByBit Hack.
The complaint states that the funds seized from these addresses were not controlled by Torres but by “Professional Money Laundering Organizations” (PMLOs) engaging in illicit activities. On May 19, 2025, the FBI requested Tether, the issuer of USDT, to freeze the funds in Target Addresses #1-3, and a subsequent request on June 11, 2025, led to the freezing of funds in Target Address #4.
The complaint also requests the court to determine the validity and priority of any claims to the Defendant Property.
Please contact BlockTribune for access to a copy of this filing.
