Pig butchering—a scam named after the practice of farmers fattening hogs before slaughter—often starts with what appears to be a wrong-number text message. People who respond are lured into crypto inv
Stand naked in front of a mirror and do an honest appraisal of what you look like naked, then ask yourself if a young person would want that body
New Study Estimates as Much as $75 Billion in Global Victims’ Losses to Pig-Butchering Scam
[Internet traps, online loans or scams, network marketing, smartphones inside the hand holding a rope trap to lure victims]
By Zeke Faux / Bloomberg
February 29, 2024 11:00 PM EST
Pig-butchering scammers have likely stolen more than $75 billion from victims around the world, far more than previously estimated, according to a new study.
John Griffin, a finance professor at the University of Texas at Austin, and graduate student Kevin Mei gathered crypto addresses from more than 4,000 victims of the fraud, which has exploded in popularity since the pandemic. With blockchain tracing tools, they tracked the flow of funds from victims to scammers, who are largely based in Southeast Asia.
Over four years, from January 2020 to February 2024, the criminal networks moved more than $75 billion to crypto exchanges, said Griffin, who has written about fraud in financial markets. Some of the total could represent proceeds from other criminal activities, he said.
“These are large criminal organized networks, and they’re operating largely unscathed,” Griffin said in an interview.
Pig butchering—a scam named after the practice of farmers fattening hogs before slaughter—often starts with what appears to be a wrong-number text message. People who respond are lured into crypto investments. But the investments are fake, and once victims send enough funds, the scammers disappear. As far-fetched as it sounds, victims routinely lose hundreds of thousands or even millions of dollars. One Kansas banker was charged this month with embezzling $47.1 million from his bank as part of a pig-butchering scam.
The people sending the messages are often themselves victims of human trafficking from across Southeast Asia. They’re lured to compounds in countries including Cambodia and Myanmar with offers of high-paying jobs, then trapped, forced to scam, and sometimes beaten and tortured. The United Nations has estimated more than 200,000 people are being held in scam compounds.
Read More: The Enduring Nightmare of Trafficked Scammers
The study, “How Do Crypto Flows Finance Slavery? The Economics of Pig Butchering,” was released on Thursday. Griffin and Mei found that $15 billion had come from five exchanges, including Coinbase, typically used by victims in Western countries. The study said that once the scammers collected funds, they most often converted them into Tether, a popular stablecoin. Of the addresses touched by the criminals, 84% of the transaction volume was in Tether.
“In the old days, it would be extremely difficult to move that much cash through the financial system,” Griffin said. “You’d have to go through banks and follow ‘know-your-customer’ procedures. Or you’d have to put cash in bags.”
Paolo Ardoino, the chief executive officer of Tether, called the report false and misleading. “With Tether, every action is online, every action is traceable, every asset can be seized and every criminal can be caught,” Ardoino said in a statement. “We work with law enforcement to do exactly that.”
Tether has cooperated with authorities in some cases to freeze accounts tied to fraud. But often by the time the crime is reported, the scammers have already cashed out.
“Our paper shows they’re the currency of choice for criminal networks,” Griffin said.
Chainalysis Inc., a blockchain analysis firm, also said the study’s totals might be inflated. Just because a blockchain address receives some money from a pig-butchering scam doesn’t mean all the money received by that address comes from fraud. “Quantifying funds earned through pig-butchering scams is challenging given limited reporting,” said Maddie Kennedy, a spokesperson for Chainalysis. Tether is a one of the company’s customers.
Many of the fraud victims’ blockchain addresses were collected by Chainbrium, a Norwegian crypto investigations firm. Chainbrium also conducted its own analysis of the data and found that a large proportion of the funds flowed through a purportedly decentralized crypto exchange called Tokenlon. Scammers use the exchange to obscure the source of the funds, according to Chainbrium. Tokenlon didn’t respond to a request for comment.
“People in the U.S., their money is going straight to Southeast Asia, into this underground economy,” said Jan Santiago, a consultant to Chainbrium.
Eventually, the criminals would send the scam proceeds to centralized crypto exchanges to cash out for traditional money. Griffin said Binance was the most popular exchange, even after the company and its founder, Changpeng Zhao, pleaded guilty in November to criminal anti-money-laundering and sanctions charges and agreed to pay $4.3 billion to resolve a long-running investigation by prosecutors and regulators.
“Binance is the place where they can move large amounts of money out of the system,” Griffin said.
Like Tether, Binance has worked with law enforcement in some cases to freeze accounts tied to fraud and return money to victims. A spokesman for the company said it recently worked with authorities to seize $112 million in a pig-butchering case.
“Binance continues to work closely with law enforcement and regulators to raise more awareness of scams, including pig butchering cases,” the spokesman, Simon Matthews, said.
Time
Credit: Tara Anand, special to ProPublica
What’s a Pig Butchering Scam? Here’s How to Avoid Falling Victim to One.
Thousands have lost huge sums after being lured into fraudulent online investment schemes by seemingly attractive strangers who strike up online conversations with them. Here’s a guide to spotting the telltale signs.
by Cezary Podkul
Sept. 19, 2022, 3:50 p.m. EDT
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If you’re like most people, you’ve received a text or chat message in recent months from a stranger with an attractive profile photograph. It might open with a simple “Hi” or what seems like good-natured confusion about why your phone number seems to be in the person’s address book. But these messages are often far from accidental: They’re the first step in a process intended to steer you from a friendly chat to an online investment to, ultimately, watching your money disappear into the account of a fraudster.
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“Pig butchering,” as the technique is known — the phrase alludes to the practice of fattening a hog before slaughter — originated in China, then went global during the pandemic. Today criminal syndicates target people around the world, often by forcing human trafficking victims in Southeast Asia to perpetrate the schemes against their will. ProPublica recently published an in-depth investigation of pig butchering, based on months of interviews with dozens of scam victims, former scam sweatshop workers, advocates, rescue workers, law enforcement and investigators, along with extensive documentary evidence including training manuals for scammers, chat transcripts between scammers and their targets and complaints filed with the Federal Trade Commission.
“We’ve had people from all walks of life that have been victimized in these cases and the paydays have been huge,” said Andrew Frey, a financial investigator for the Secret Service, the federal agency that is taking a lead role in combating online crime and trying to help victims recover their stolen funds.
These swindles are not only highly organized but also systematized. Here’s how the fraudsters typically go about it, including photographs, excerpts from text exchanges between scammers and targets, advice from training guides for fraudsters and police reports from pig butchering cases:
1. Create a fake identity
Pig butchers most often begin by creating a phony online persona, typically accompanied by an alluring photo (which itself might have been stolen) and images that convey a glamorous lifestyle.
This Instagram profile was reported to the Federal Trade Commission by a Florida resident who complained of losing $89,000 to a pig butchering scam. (Meta, which owns Instagram, said it’s investigating the account, whose owner didn’t respond to a request for comment.) Credit: Screenshot blurred by ProPublica
2. Initiate contact
Once they’ve got an online profile, fraudsters begin sending messages to people on dating or social networking sites. Alternatively, they may use WhatsApp or another messaging service and pretend to have stumbled on a “wrong number” as they contact you. (A spokesperson for Meta, which owns WhatsApp, previously told ProPublica that the company is investing “significant resources” into keeping pig-butchering scammers off its platforms.)
In December 2020, a Connecticut man received these messages on WhatsApp from a seemingly friendly stranger. He responded and eventually ended up getting tricked into two scams that cost him a total of $180,000.
[12/28/20, 12:06 AM] SCAMMER J: Long time no see, how are you recently
[12/28/20, 10:10 AM] SCAMMER J: 🙈Are you not Kevin? Sorry, I guess I added the wrong person, sorry
[12/28/20, 10:16 AM] TARGET C: Not Kevin.
[12/28/20, 10:16 AM] SCAMMER J: Sorry, I made the wrong call. Since I have many business partners, my assistant saved the wrong number, please forgive me
[12/28/20, 10:17 AM] TARGET C: No prob. What country are you calling from?
[12/28/20, 10:17 AM] SCAMMER J: I come from Hong Kong. Hong Kong is a metropolis with technology, finance and food. Have you ever been here
[12/28/20, 10:18 AM] SCAMMER J: Acquaintance is fate, where are you from
[12/28/20, 10:18 AM] TARGET C: I’m from NYC originally
[12/28/20, 10:19 AM] SCAMMER J: Your place is a very beautiful place, I went there years ago
3. Win the trust of the target
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 with an eye toward mining their targets for information about their lives that they can later use to manipulate them. They’ll fabricate details about their own life that make them seem similar to you. After all, people like people who are like them.
When a Houston woman revealed that her brother was born with cerebral palsy, a crook countered with a similar-sounding tale:
[2/25/21, 6:32:38 PM] TARGET P: I have one brother that is handicapped and lives with my parents. Of course he’s coming with them for the weekend
[2/25/21, 6:35:36 PM] SCAMMER C: I see. My parents are taking care of my brother. I hope he will live well
[2/25/21, 6:38:49 PM] TARGET P: My brother was born with cerebral palsy
[2/25/21, 6:39:19 PM] SCAMMER C: Sorry things, but also hard for your parents
[2/25/21, 6:39:29 PM] TARGET P: He’s healthy over all but you have to do everything for him. He can’t talk, dress, or feed himself
4. Sign them up
Before long, the swindlers will pivot to a discussion of investing. They’ll make claims about their own purported investing successes, perhaps sharing screenshots of a brokerage account with gaudy numbers in it. They’ll try to convince targets to open an account at their online brokerage. Unbeknownst to the target, the brokerage is a sham, and any money deposited will go straight to the scammer. Most victims don’t figure out that last part until it’s too late.
Guides for scammers recommend touting the reliability of MetaTrader, a trading app that fraudsters use for nefarious purposes, by pointing out that the app is available in Apple’s App Store, so it must be safe. (MetaTrader did not respond to requests for comment. An Apple spokesperson said the company has shared complaints with MetaTrader’s parent company, and asserted that the parent has taken steps to respond to the complaints.)
5. Get them to put real money into the fake account
Once marks agree to learn investing tricks, the scammers will “help” them with the investment process. The fraudsters will explain how to wire money from their bank account to a crypto wallet and eventually to the fake brokerage. Typically the fraudster will ease the process by recommending a modest initial investment — which will inevitably show a gain.
A woman in Michigan became intrigued by her online boyfriend’s references to making money trading gold and offered to become his student. Two days later, he was teaching her how to get started investing in a fake brokerage accessible through MetaTrader:
[3/16/21, 4:40:00 PM] TARGET T: What are you up to right now?
[3/16/21, 5:11:42 PM] SCAMMER L: I’m reading a book
[3/16/21, 5:14:39 PM] TARGET T: What book are you reading?
[3/16/21, 5:17:02 PM] SCAMMER L: A book about investing in gold
[3/16/21, 5:19:04 PM] TARGET T: Nice. You should teach me. Make me your student.
[3/16/21, 5:20:37 PM] SCAMMER L: 🥰I don't want you to be my student. I want you to be my wife.🥰
6. “Prove” that it’s legitimate
Scammers often allay initial doubts by letting targets withdraw money once or twice to convince them the process is trustworthy. For example, fraudsters allowed a Canadian man named Sajid Ikram to withdraw 33,000 Canadian dollars, according to a statement he filed with the Royal Canadian Mounted Police. That returned money helped convince him that his investment was real. He reported ultimately losing nearly $400,000, including money borrowed from several friends.
7. Manipulate them into investing more
That’s only the beginning. Pig butchering guides offer insights on how to exploit marks’ emotional and financial vulnerabilities to manipulate them into depositing more and more funds. It starts with assurances that the investments are risk-free, then escalates into pressure to take out loans, liquidate retirement savings, even mortgage a house.
Over a period of nine days, one scammer (who called herself Jessica) escalated her pressure, pushing the target, a California man, first to use his cash on hand, then to tap his retirement savings, then to borrow money.
[11/3/21, 8:03:13 PM] TARGET Y: I just don’t want to risk
[11/3/21, 8:03:42 PM] SCAMMER J: When you need money, you can ask for it at any time
[11/3/21, 8:04:08 PM] SCAMMER J: This is not a risk, it is called maximizing profit
[11/8/21, 5:31:53 PM] TARGET Y: what can I do
[11/8/21, 5:32:27 PM] SCAMMER J: Your 401K can’t move?
[11/8/21, 5:32:50 PM] TARGET Y: You know how that works. Heavy penalties plus double taxation
[11/8/21, 5:32:53 PM] SCAMMER J: Then you can earn it back with a fine.
…
[11/11/21, 6:20:05 PM] SCAMMER J: Borrowing money from the bank is not a big deal, I often do
[11/11/21, 6:22:11 PM] TARGET Y: I am not ignoring you. I am trying to think
[11/11/21, 6:22:45 PM] SCAMMER J: You are a wise man, this is borrowing a chicken to lay eggs
[11/11/21, 6:23:23 PM] SCAMMER J: Really rich people use bank money to invest
8. Cut them off
Once targets reach a limit and become unwilling to deposit more funds, their seeming investment success comes to a sudden stop. Withdrawals become impossible, or they suffer a big “loss” that wipes out their entire investment.
The California man was aghast when he discovered $440,000 he’d deposited was gone. Ultimately, the swindler persuaded him to invest another $600,000, which also disappeared into the swindler’s account.
[11/18/21, 11:59:16 AM] TARGET Y: I lost all my money
[11/18/21, 11:59:18 AM] SCAMMER J: If the principal is not enough, it cannot be supported to the profit point.
[11/18/21, 11:59:34 AM] SCAMMER J: Don’t worry,
[11/18/21, 11:59:46 AM] TARGET Y: I am negative $480k
[11/18/21, 12:00:01 PM] SCAMMER J: Prepare the funds and earn them back.
[11/18/21, 12:00:12 PM] TARGET Y: I don’t have any money or funds to prepare
[11/18/21, 12:00:20 PM] TARGET Y: That’s all I have!!!!!!!!!!!!
9. Use their desperation to your advantage
Scammers will then turn the screws of manipulation tighter by telling victims there’s a potential solution: If they deposit more cash into the brokerage, they can regain what they lost. Sometimes, the claim is that the investment is successful — but there’s a “tax problem” that requires paying additional funds equal to, say, 20% of their total account value. If the victim pays, the scammer will claim that new obstacles have arisen that require paying new fees.
No matter how much targets pay, it’s never enough, as detailed in the FTC complaint excerpted below, which was filed by a pig butchering victim in Maryland. This person lost almost $1.4 million, in part because the person kept meeting scammers’ demands to pay taxes and various fees to get their money back:
“Once the trading has ended, I applied to withdrawal my money and profit from the website. The broker asked me to pay a tax on the profit of 88,587.90 usd on 8162021, this amount was wired again through Bank of America into a foreign account in Hong Kong. Another request for me to pay security deposit on my profits which was 83,950.00 usd wired out to a different foreign account in Hong Kong once again. The broker asked for a bank and withdrawal processing fee of 27,983.34 usd again was wired out to a different foreign account in Hong Kong. The very last wire was for expediting the withdrawal and the platform asked for 55,966.60 usd wired out to Hong Kong. At this point I already had to much money in the platform so I kept giving in.”
10. Taunt and depart
Once the targets are aware that they’ve been swindled, the fraudsters often insult or taunt them. They soon go silent, and the websites of their phony brokerages stop working. Then they relaunch a new website under a different URL and restart the process with other targets.
After nearly four months of chatting and $30,000 in losses for the Michigan victim, her scammer seemed to revel in unveiling the financial — and emotional — deception:
[7/1/21, 3:25:31 PM] SCAMMER L: I’m a liar, too.
[7/1/21, 3:25:42 PM] TARGET T: What do you mean you are a liar?
[7/1/21, 3:25:58 PM] SCAMMER L: But I am very kind, I only cheated you out of 30K, thank you for 30K
[7/1/21, 3:26:16 PM] TARGET T: Wow.
[7/1/21, 3:26:55 PM] TARGET T: You deleted this message.
[7/1/21, 3:27:23 PM] TARGET T: You don’t really love me? We are not getting married?
[7/1/21, 3:27:44 PM] SCAMMER L: Surprise or surprise. I’m not surprised.
What to Do If You’ve Been Scammed
If you’ve been victimized, report the crime to your bank and law enforcement — the FBI, the Secret Service and local police — as quickly as possible. The longer you wait, the harder it is for your bank to reverse any fraudulent transactions and for law enforcement to trace, freeze or seize stolen funds. “We are definitely going to be more successful if you immediately report,” said Erin West, deputy district attorney at the Santa Clara County District Attorney’s office, which has had some success seizing assets linked to pig butchering scams.
ProPublica
Me: I get invites on my substack to talk with people who say they know me - I delete them all unopened. Stand naked in front of a mirror and do an honest appraisal of what you look like naked, then ask yourself if a young person would want that body - and if the answer is no!! you are prime to be pig butchered, because if your body were worth having, someone would be your partner now in the flesh - right?