Georgia Criminal Defense Lawyers Blog
A new type of fraudulent online investment scheme has led to thousands of victims worldwide and significant financial losses. In a pig butchering scam, victims are gradually lured into making financial contributions to a seemingly sound investment only to have the person they are dealing with subsequently disappear with the funds.
These types of schemes originated in 2020 and have gained international momentum through the use of social media platforms and online dating applications. In a departure from conventional financial scams, these fraudsters focus on psychological manipulation of victims by crafting elaborate fake identities to establish romantic or emotional connections with their targets.
After the scammer creates a fake online persona, the scam begins by initiating contact with a target. Often, the scammer will pretend to have stumbled across a “wrong number” as they contacted the victim. The next step is starting a conversation with a potential victim to gain their trust. The scammers often initiate benign chats about life, family, and work, and they’ll fabricate details about their own life that make them seem similar to you. Once the scammer gains trust, they will eventually pivot the conversation to investing and making claims about their own purported success with investments.
Once the target agrees to accept “help” with the investment process, the scammer typically explains how to wire money from their bank account to a crypto wallet and eventually to a “brokerage.” The scammer may initially encourage a modest investment and allow the victim to withdraw “returns” on their investment as proof the investment is legit. From there, the scammer will only continue to manipulate their victim into investing more and more. Once the fraudster is unable to convince the victim to continue making deposits, they will disappear and sever all contact.
A key feature that distinguishes pig butchering scams is the human aspect that shows a pattern of coercion and exploitation. Often times the low-level operators of these scams are victims themselves who may have been coerced into participating in these crimes under the guise of employment opportunities. Many of the perpetrators are lured from abroad then forced to commit the fraud by organized crime syndicates. The effects of pig butchering scams extend beyond the significant financial losses to encompass human rights issues tied to trafficking and coercion.
Perpetrators of pig butchering scams have been charged across the country by federal prosecutors working alongside the Computer Crime and Intellectual Property Section’s (CCIPS) National Cryptocurrency Enforcement Team (NCET), which was established to combat the growing illicit use of cryptocurrencies and digital assets. In California, four defendants were charged with conspiracy to commit money laundering, concealment money laundering, and international money laundering for their involvement in a $20 million dollar pig butchering scheme.