The US Department of Justice has charged four suspects (two of whom are already in custody) for their possible involvement in pig butchering scams that led to the loss of $80 million.
The four suspects , Lu Zhang, Justin Walker, Joseph Wong (California residents) and Hailong Zhu (Illinois resident), are charged with things like conspiracy to commit money laundering, concealment of money laundering proceeds, and international money laundering.
They allegedly opened numerous shell companies and bank accounts to launder profits from victims of crypto investment scams (also known as pig butchering or cryptocurrency confidence scams) alongside other fraudulent schemes. The proceeds were transferred to domestic and international financial institutions under their control.
See also: Pig Butchering scams: Authorities announce seizure of $9 million worth of crypto
In pig butchering scams, criminals typically approach victims via messaging apps, dating platforms, or social media. They try to build a relationship of trust and then suggest that they invest in crypto that is supposed to bring them big profits. In most cases, they are told to give an initial amount in order to get more money back, but in reality, this amount is taken by the scammers and the victims receive nothing. Instead, they also lose the money they have invested.
Two of the four suspects, Zhang and Walker, were arrested and appeared in a Los Angeles federal court hearing yesterday. If convicted, both defendants could face a maximum sentence of 20 years in prison.
See also: Pig butchering crypto scam: Hackers stole $1 million in three months
“ The overall pig-butchering fraud scheme involved at least 284 transactions and resulted in more than $80 million in losses. More than $20 million in victim funds were deposited directly into bank accounts associated with the defendants ,” the Justice Department said
Pig-butchering scams: A growing concern
The FBI 2022 Internetshowed that investment fraud cost Americans over $3 billion last year, showing a worrying increase over previous years.
This wasn’t the first warning about “pig-butchering” scams that the U.S.. In March, it also issued a statement about a rise in crypto investment scams.
Pig butchering crypto scams are particularly dangerous because they don't require the installation of malware on the victim. Instead, they use social engineering to trick the victim.
See also: New pig butchering scam promises profits from gold investments
As we mentioned earlier, many crypto scams start on dating apps, where the scammer creates a relationship of trust and "love" with the victim to convince them to invest in fake sites.
Security experts are urging people to be wary of anyone who suddenly approaches them via a dating app or social media platform , particularly if the “person” they are communicating with wants to move the conversation to a platform like WhatsApp and then discusses crypto investments . It is essential for investors to be extremely careful and do good research before investing their money somewhere.
Source: www.bleepingcomputer.com
