LOS ANGELES The Department of Justice announced today that it has seized virtual currency worth an estimated $112 million linked to cryptocurrency investment scams commonly called pig butchering.
Seizure warrants for six virtual currency accounts were authorized by judges in Los Angeles, the District of Arizona, and the District of Idaho. In the Los Angeles matter, a United States magistrate judge authorized the seizure of an account containing approximately $66.4 million in various cryptocurrencies after finding probable cause that the funds were derived from wire fraud schemes.
According to court documents, the six virtual currency accounts were used to launder proceeds of various cryptocurrency confidence scams. In these schemes, fraudsters cultivated long-term, online relationships with victims, eventually enticing them to make investments in fraudulent cryptocurrency trading platforms. In reality, the funds sent by victims for these purported investments were instead funneled to cryptocurrency addresses and accounts controlled by scammers and their co-conspirators.
The victims in Pig Butchering schemes are referred to as pigs by the scammers because the scammers will use elaborate storylines to fatten up victims into believing they are in a romantic or otherwise close personal relationship, according to the affidavit in support of the Los Angeles seizure warrant. Once the victim places enough trust in the scammer, the scammer brings the victim into a cryptocurrency investment scheme.
The scammer attempts to create the appearance of legitimacy by fabricating websites or mobile apps to display a bogus investment portfolio with large returns, the affidavit states. In relation to the Los Angeles-based account seizure, the FBI has identified at least 10 victims who were unable to withdraw funds they had invested, with the seized account containing some funds from all 10 victims.
Authorities executed the Los Angeles seizure warrant in December and received the last transfer of cryptocurrency on March 21.
Using the methods of traditional con artists, high-tech fraudsters have taken advantage of the publicity and hype surrounding cryptocurrency to encourage an untold number of Americans to invest in get-rich-quick schemes, said United States Attorney Martin Estrada. We all know that investment scams are not new, but the use of digital currency to commit fraud presents new challenges to victims and to law enforcement trying to recover lost funds which likely total billions of dollars in the so-called pig butchering schemes. The major seizures announced today show that law enforcement is confronting the new challenges and taking strong measures to address this fraud, but the public should be extremely wary of investment scams that use cryptocurrency and promise unrealistic returns.
The affidavit in the Los Angeles seizure warrant discussed a series of cryptocurrency investment scams, one of which targeted a professional woman who was contacted on LinkedIn by a man who used the name Fei Kuang. After learning that the victim already had a small cryptocurrency account, Fei Kuang offered to help the victim, eventually convincing her to invest more money and to move her funds to another, presumably fraudulent, trading exchange. When she tried to withdraw her funds, she was told she had to pay a 20% in taxes. When the trading platform continued to demand more money, the woman realized she was the victim of a scam which cost her approximately $2.5 million.
Transnational criminal organizations are combining confidence scams with technological savvy to swindle Americans out of their hard-earned funds, said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Departments Criminal Division. These particularly vicious frauds where scammers carefully cultivate relationships with their victims over time have devastated families and cost individuals their life savings. Now that we have seized this virtual currency, we will seek to swiftly return it to victims. In addition to our tireless efforts to disrupt these schemes, we must also work to raise public awareness and help inform potential victims: be wary of people you meet online; seriously question investment advice, especially about cryptocurrency, from people you have not met in person; and remember, investments that seem too good to be true, usually are.
In 2022, investment fraud caused the highest losses of any scam reported by the public to the FBIs Internet Crimes Complaint Center (IC3), totaling $3.31 billion. Frauds involving cryptocurrency, including pig butchering, represented most of these scams, increasing 183% from 2021 to $2.57 billion in reported losses last year.
According to the FBI, the highest number of reports came from victims between the ages of 30 and 49. In these schemes, often called Sha Zhu Pan, a Chinese phrase that loosely translates to pig butchering, scammers often target their victims through social networking and online communications platforms, dating websites, and phone calls and text messages that are meant to appear to have been misdialed. After gaining the trust of their victims sometimes over a period of months scammers eventually introduce the idea of trading in cryptocurrency. They then direct victims to cryptocurrency investment platforms or to co-conspirators posing as investment advisors or customer service representatives. Scammers control websites that are built to look like legitimate trading platforms, applications that victims download onto their phones, or malicious smart contracts accessed through cryptocurrency wallet software.
Once victims make an initial investment, the platforms purport to show substantial gains. Sometimes, victims are even allowed to withdraw some of these initial gains to further engender trust in the scheme. It is not until a large investment is made that victims find that they are unable to withdraw their funds.
Even when a victim is denied access to their funds, the fraud is often not yet over. Scammers request additional investments, taxes or fees, promising that these payments will allow victims access to their accounts. These scam operations often continue to steal from their victims and do not stop until they have deprived victims of any remaining savings.
Depriving scam organizations of their ill-gotten gains is an important part of our strategy to combat these ruthless schemes, said Director Eun Young Choi of the Criminal Divisions National Cryptocurrency Enforcement Team (NCET). We will continue to use all tools at our disposal to disrupt and deter cryptocurrency confidence schemes, including by following the money on the blockchain and seizing cryptocurrency to return funds to victims, and by targeting and taking down online infrastructure used by the scammers. Todays announcements also demonstrate the value of early notification by victims to law enforcement; we thank those victims who came forward to notify the FBI when they were targeted by this scheme.
The FBI Phoenix Division is investigating the matter that resulted in seizures announced today.
Assistant United States Attorney Daniel Boyle of the Asset Forfeiture and Recovery Section is handling the Los Angeles case. The other cases are being handled by the District of Arizona and the District of Idaho. The NCET and the Criminal Divisions Fraud Section provided substantial assistance and coordination.
If you or someone you know is a victim, visit http://www.fbi.gov/cryptoguard, contact your local FBI field office (the Los Angeles Field Office can be reached at 310-477-6565), call 1-800-CALL-FBI, or report it to IC3.gov. In your complaint, please reference, Pig Butchering PSA. Include as much information as possible in your complaint including names of investment platforms, cryptocurrency addresses and transaction hashes, bank account information, and names and contact information of suspected scammers. Maintain copies of all communications with scammers and records of financial transactions.
Here is the original post:
Justice Dept. Seizes Over $112M in Funds Linked to Cryptocurrency ... - Department of Justice
- Stellar (XLM) Readies for Its Biggest Protocol Upgrade: Details - U.Today - September 19th, 2023 [September 19th, 2023]
- Soroban Smart Contracts to Launch on Stellar, Dubbed By Far The Biggest Protocol Upgrade Yet - CoinCodex - September 19th, 2023 [September 19th, 2023]
- Soroban Smart Contracts to Launch on Stellar, Dubbed By Far The Biggest Protocol Upgrade Yet - CoinCodex - September 19th, 2023 [September 19th, 2023]
- How To Use GPT-4 To Write And Debug Solidity Smart Contracts - Blockchain Magazine - September 19th, 2023 [September 19th, 2023]
- Revolutionizing Employment: Web3's Disruption of Traditional Models - Geeks World Wide - September 19th, 2023 [September 19th, 2023]
- Stellar (XLM) Readies for Its Biggest Protocol Upgrade: Details - U.Today - September 19th, 2023 [September 19th, 2023]
- How To Use GPT-4 To Write And Debug Solidity Smart Contracts - Blockchain Magazine - September 19th, 2023 [September 19th, 2023]
- What Is Smart Contract Ethereum - Robots.net - September 19th, 2023 [September 19th, 2023]
- Ethereum Smart Contract Development and Deployment - The Coin Republic - September 19th, 2023 [September 19th, 2023]
- What Is Smart Contract Ethereum - Robots.net - September 19th, 2023 [September 19th, 2023]
- How Smart Contracts Helps To Unlock the Potential of DAOs - The Coin Republic - September 19th, 2023 [September 19th, 2023]
- Citigroup Will Let Rich Clients Use Private Blockchain to Transfer Assets - Decrypt - September 19th, 2023 [September 19th, 2023]
- Citigroup Will Let Rich Clients Use Private Blockchain to Transfer Assets - Decrypt - September 19th, 2023 [September 19th, 2023]
- Web3 is about solving business problems, not token prices: Google ... - Cointelegraph - September 19th, 2023 [September 19th, 2023]
- From virtual tours to smart contracts: how martech is revolutionising real estate - ETBrandEquity - September 19th, 2023 [September 19th, 2023]
- Introduction to Testnet - LCX - LCX - September 19th, 2023 [September 19th, 2023]
- Applications and use cases of blockchain technology - Telefnica - September 19th, 2023 [September 19th, 2023]
- Bitcoin Holds Steady Above $27K and Hawkish FOMC Comments ... - Unchained - September 19th, 2023 [September 19th, 2023]
- Shiba Inu And Bitcoin Spark: A Tale of Two Cryptos - Finbold - Finance in Bold - September 19th, 2023 [September 19th, 2023]
- DTCC, Clearstream, Euroclear Call For Industry Cooperation To Support Digital Asset Ecosystem | Crowdfund - Crowdfund Insider - September 19th, 2023 [September 19th, 2023]
- Crypto Will Prevail Through the Evolving Regulatory Landscape - Bloomberg Law - September 19th, 2023 [September 19th, 2023]
- What Is Xahau & How Does It Work? How To Get Its XRP+ Tokens? - Captain Altcoin - September 1st, 2023 [September 1st, 2023]
- Smart Contracts Market by Size, Share Trends, Emerging Trends, Qualitative Outlook and Worldwide Forecast - Benzinga - September 1st, 2023 [September 1st, 2023]
- North America Emerges as Key Driver in the Rapid Growth of ... - GlobeNewswire - September 1st, 2023 [September 1st, 2023]
- Meet Five Generative AI Innovators in Africa and the Middle East - Nvidia - September 1st, 2023 [September 1st, 2023]
- What is a Smart Port? - Port Technology International - September 1st, 2023 [September 1st, 2023]
- P-20 Blockchain Revolutionizes Privacy and Stability in Digital ... - GlobeNewswire - September 1st, 2023 [September 1st, 2023]
- Blockchain and IoT Convergence: Market Set to Revolutionize with ... - GlobeNewswire - September 1st, 2023 [September 1st, 2023]
- Plasma vs Sharding: What's the Better Innovative Scalability ... - Cryptopolitan - September 1st, 2023 [September 1st, 2023]
- Strategic Steps and Pivotal Considerations In Building A DLT ... - Cryptopolitan - September 1st, 2023 [September 1st, 2023]
- Nearly $1 billion lost to crypto exploits, hacks, and scams in 2023 ... - Cryptopolitan - September 1st, 2023 [September 1st, 2023]
- Revolutionizing Property Sales: Smart Contracts on the Blockchain - Medium - August 30th, 2023 [August 30th, 2023]
- XRP: Important Warning Issued to Community in Wake of This Development - U.Today - August 30th, 2023 [August 30th, 2023]
- XRPL Labs and Xahau Ledger partner to boost XRP retail adoption Cryptopolitan - Cryptopolitan - August 30th, 2023 [August 30th, 2023]
- OpenZeppelin launches version 2.0 of its Defender end-to-end ... - SiliconANGLE News - August 30th, 2023 [August 30th, 2023]
- Warp Protocol Launches on Neutron, Introducing Limitless Automation Capabilities to Neutron Developers - Yahoo Finance - August 30th, 2023 [August 30th, 2023]
- Know Ethereum's expanding horizons from finance & beyond - CryptoNewsZ - August 30th, 2023 [August 30th, 2023]
- Interlay Launches MVP of New Bitcoin Layer-2 BOB - Decrypt - August 30th, 2023 [August 30th, 2023]
- The mechanics of lightning nodes: An in-depth look - The Jerusalem Post - August 30th, 2023 [August 30th, 2023]
- Patent: IOTA Tangle Tech Can Play Crucial role In NFT Betting - Crypto News Flash - August 30th, 2023 [August 30th, 2023]
- Upgrading Web3 User Experience With Account Abstraction - Forbes - August 30th, 2023 [August 30th, 2023]
- Exploring the World of Crypto Loans: Benefits, Risks, and Future ... - cryptonewsbytes.com - August 30th, 2023 [August 30th, 2023]
- Ethereum under scrutiny as whales rally around ADA, XLM, ROE ... - crypto.news - August 30th, 2023 [August 30th, 2023]
- How To Read Data From The Blockchain: A Comprehensive Guide - Blockchain Magazine - August 30th, 2023 [August 30th, 2023]
- What are Peer-to-Peer Transactions? - Blockchain Council - August 30th, 2023 [August 30th, 2023]
- Why is Ethereum Sharding A Potential Scalability Solution ... - Cryptopolitan - August 30th, 2023 [August 30th, 2023]
- Strengthening Indias Blockchain Landscape: IBF and QuillHash Join Forces - CoinTrust - August 30th, 2023 [August 30th, 2023]
- dYdX Community Votes On Appchain Migration and V4 Deployment - Yahoo Finance - August 30th, 2023 [August 30th, 2023]
- Future of Finance: BitGo CEO Mike Belshe on the companys recent funding round and why crypto is an alternative to bad money - Fortune - August 30th, 2023 [August 30th, 2023]
- Is Ethereum Better than Bitcoin? - Watcher Guru - August 30th, 2023 [August 30th, 2023]
- Creating Future-Proof Tokens: Unveiling Cutting-Edge Token ... - Medium - August 30th, 2023 [August 30th, 2023]
- VeChain Partners With SingularityNET for Blockchain & AI Projects - Crypto News Flash - August 30th, 2023 [August 30th, 2023]
- The Role of Blockchain in Streaming Global Payments - Global Trade Magazine - August 30th, 2023 [August 30th, 2023]
- When it comes to BIN Sponsorship, it's all about the partnership ... - Finextra - August 30th, 2023 [August 30th, 2023]
- Are Smart Contracts Useful in Recording Financial Transactions for ... - Cryptopolitan - August 28th, 2023 [August 28th, 2023]
- How to Develop, Test and Deploy Ethereum Smart Contracts? - The Coin Republic - August 28th, 2023 [August 28th, 2023]
- Does Bitcoin Have Smart Contracts - What Was Bored Ape Yacht ... - Asia Insurance Review - August 28th, 2023 [August 28th, 2023]
- What Are Multisig Wallets And How Do They Work? - Unchained - August 28th, 2023 [August 28th, 2023]
- Some DeFi Projects that are Changing the Financial Dynamics - The Coin Republic - August 28th, 2023 [August 28th, 2023]
- Bitcoin Spark: Igniting the Future of Cryptocurrency, in the Footsteps of Ethereum and Cardano | - Bitcoinist - August 28th, 2023 [August 28th, 2023]
- Becoming A Blockchain Specialist: Navigating The Path To Expertise - Blockchain Magazine - August 28th, 2023 [August 28th, 2023]
- 3 Best Oracle Cryptocurrency Projects to Discover in August 2023 - The Coin Republic - August 28th, 2023 [August 28th, 2023]
- How Is Web3 Penetration Testing Crucial for Defending ... - Cryptopolitan - August 28th, 2023 [August 28th, 2023]
- Decentralised Derivatives In Crypto: What Are They? Heres How They Can Impact The Financial Landscape - ABP Live - August 28th, 2023 [August 28th, 2023]
- Sakai Vault: Empowering Decentralized Finance Through Innovative ... - GlobeNewswire - August 28th, 2023 [August 28th, 2023]
- NFTs and Real-World Assets - LCX - LCX - August 28th, 2023 [August 28th, 2023]
- Assessing Trons entry into the big league based on these achievements - AMBCrypto News - August 28th, 2023 [August 28th, 2023]
- US: the proposal to do a regulation of taxes on crypto - The Cryptonomist - August 28th, 2023 [August 28th, 2023]
- Avalanche's 0.21% Price Increase to $10.12: Key Takeaways for ... - BTC Peers - August 28th, 2023 [August 28th, 2023]
- What is a Bitcoin Contract Address? - Bitcoinsensus - August 28th, 2023 [August 28th, 2023]
- Recursive inscriptions: Bitcoin 'supercomputer' and BTC DeFi ... - Cointelegraph - August 28th, 2023 [August 28th, 2023]
- The promise and perils of "smart" contracts - Investment Executive - August 13th, 2023 [August 13th, 2023]
- How blockchain is helping Northern Trust self-execute contracts - American Banker - August 13th, 2023 [August 13th, 2023]
- Cube3.ai Raises $8.2 Million to Protect Smart Contracts from ... - Clayton County Register - August 13th, 2023 [August 13th, 2023]
- NuCypher's Integration with Blockchain: Securing Smart Contract Data - Business Post Nigeria - August 13th, 2023 [August 13th, 2023]
- Microsoft partners with Aptos blockchain to marry AI and web3 - TechCrunch - August 13th, 2023 [August 13th, 2023]
- Navigating financial markets on Blockchain and smart contracts - Cyprus Mail - August 13th, 2023 [August 13th, 2023]
- Deep Dive: The Number 1 Crypto to Buy Today is... - CryptoTicker.io - Bitcoin Price, Ethereum Price & Crypto News - August 13th, 2023 [August 13th, 2023]
- Is Ethereum Price Stagnating due to ETH 2.0 Staking? - BeInCrypto - August 13th, 2023 [August 13th, 2023]
- Obvious launches a Smart contract wallet on Ethereum, that enables users to pay gas fees in a token of their choice with its intuitive mobile app,... - August 13th, 2023 [August 13th, 2023]