US DOJ confiscates $112 million worth of crypto linked to pig slaughter scam
The US Department of Justice (DOJ) seized $112 million in cryptocurrencies that were previously siphoned off through the so-called scam. A particular account based in Los Angeles contained digital assets worth more than $66 million.
That type of scam has become increasingly popular recently. An investigation hypothesized that many shell companies in the UK could orchestrate such schemes.
“Pig slaughter” refers to the fattening of a pig before slaughter. Criminals would contact victims via direct messages and offer them a large “investment” that could yield substantial profits. They can explain how they found the contact information and lure people into dubious schemes (which in many cases are too good to be true).
Such offenders may even develop a romantic relationship with their victims just to gain their trust. Unfortunately for those who fall into that trap, there is no real love behind the fake gestures, but only an attempt to steal one’s funds.
LA is most affected
US authorities confiscated the digital assets from six accounts based in Los Angeles, the District of Idaho and the District of Arizona. Prosecutors claimed criminals used the addresses to launder the proceeds of various crypto scams, including the pig slaughter scam.
“Victims in hog slaughter schemes are referred to as ‘pigs’ by the scammers because the scammers will use elaborate stories to ‘fat’ victims into believing they are in a romantic or otherwise close personal relationship.
Once the victim trusts the scammer enough, the scammer brings the victim into a cryptocurrency investment scheme, a statement related to the case said.
LA victims appear to be the most affected since authorities seized approximately $66.4 million from an account based in the region. The FBI identified at least ten locals who were unable to withdraw their investments, with the said address containing some of their assets.
One of the victims – a woman whose name has not been released – was contacted on LinkedIn by a man named “Fei Kuang”. He advised her to join a crypto investment scheme by sending some of her savings periodically. When she tried to withdraw her money, “Fei Kuang” told her she had to pay a 20% “tax”. The woman (who invested around $2.5 million) realized she was a victim when the dubious platform kept demanding more money.
US Attorney Martin Estrada said “high-tech scammers” have exploited the hype surrounding the crypto sector to encourage inexperienced Americans to funnel their money into “get-rich-quick” schemes. He praised the efforts of the law enforcement agencies who took “strong action” to alert the public and confiscated the tokens.
Assistant Attorney General Kenneth Polite stated that this type of fraud can have a devastating effect on families and cost individuals their entire lives. He assured that the authorities will “quickly return” the confiscated assets to the 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,” he concluded.
‘Pig slaughter’ in the UK
As The crypto potato reported earlier this year more than 168 shell companies in the UK were suspected of running investment schemes, some of which were based on pig slaughter fraud. The Bureau of Investigative Journalism and The Observer estimated that many of these firms were interconnected, while most of the directors were Chinese residents.
MP Margaret Hodge suggested that increasing the fee for registering a company in the Kingdom could be a way to stop such crime:
“Raising the fee to £100 would provide enough resources for our law enforcement without increasing the cost to the taxpayer. Anything short of that and the world’s criminals and corrupt will see that they can continue to manipulate and exploit us.”
