4 US Residents Charged With $80 Million Pig Butchering Scam; How to Protect Yourself From Such Frauds
3 California residents and 1 Illinois resident charged with $80 million pig butchering case
Federal prosecutors have charged four suspects for their alleged involvement in a pig butchering case that resulted in more than $80 million in losses, as per the Department of Justice. Two of the four suspects connected to this seven-count indictment have already been detained, per reports. Lu Zhang, Justin Walker, Joseph Wong, residents of California, and Hailong Zhu, an Illinois resident were charged with conspiracy to commit money laundering, concealment money laundering, and international money laundering, as per CNBC.
Two of them appeared in a Los Angeles federal court hearing held on December 13, 2023. If convicted, they could potentially face a maximum sentence of 20 years imprisonment, per Bleeding Computer.
What did the suspects do?
They allegedly opened many shell companies and bank accounts to launder profits that they obtained from their cryptocurrency investment scams. They also transferred funds to domestic and international financial institutions under their control. These scammers normally approach the victims through messaging apps as well as dating platforms. They work on building trust and then ask them to invest in schemes that eventually allow the scammers to drain the target's crypto wallets.
What is pig butchering?
Pig butchering is a term given to the kind of scam where scammers cold-message the victims and through social engineering build a rapport with the victim over time to take all their money away in the long term. In simple words, they fatten up their victims with hopes of lucrative returns only to attack them financially in the long run. These scams begin with seemingly innocent texts. The scammers invest their time and energy in building trust before unleashing their demons.
According to the 2022 Internet Crime Report, over $3 billion was lost in 2022 because of investment fraud. "In 2022, investment scam losses were the most (common or dollar amount) scheme reported to the IC3. Investment fraud complaints increased from $1.45 billion in 2021 to $3.31 billion in 2022, which is a 127% [increase]," per the FBI. Cryptocurrency investment fraud rose from $907 million in 2021 to $2.57 billion in 2022, an increase of 183 percent.
Pig butchering scams have emerged as a billion-dollar industry
Pig butchering is yet another example of scammers using social engineering to pull off fraud. According to Confense researcher Ronnie Tokazowski, there has been a 127% rise in pig butchering cases in 2022. "FBI has mentioned pig butchering as a scam in several public alerts, news outlets have reported a massive increase, and seeing this missing is very surprising," he says.
The pandemic fueled the rise of pig butchering
The scam started in Asia and the pandemic made it global. Based on reports, scammers started targeting people who were isolated and lonely. People who were alone were particularly susceptible to these scams. "Due to the increased isolation of the pandemic, this left people alone and vulnerable at home, anxiously awaiting any love connection. Scammers capitalized on this and that is why we saw such a steep rise," Tokazowski said, as per Dark Reading.
Ways to sheild yourself from pig butchering scams
People are becoming increasingly aware of pig butchering scams. Here are some steps that you should take to protect yourself.
1. Be wary of messages on social media and dating apps.
2. Scammers often use social engineering skills like targeting emotions such as hopes, fears, and dreams.
3. Recognise the red flags, like a sense of urgency and requests to make quick decisions.