Tech
High-tech “pig slaughter” cryptocurrency scam deceiving billions of victims
SAN FRANCISCO — Authorities are raising the alarm about a high-tech twist in a common scam in which victims are tricked by criminals into investing in fake cryptocurrency accounts.
Online predators target anyone with a phone or laptop and interested in investing from a couple of hundred dollars to much more.
“With such a massive international crime, we have literally never seen anything like this before,” said Santa Clara County Deputy District Attorney Erin West.
Bay Area residents have become victims of what is called “pig slaughter” as they are figuratively fattened by scammers and then essentially slaughtered financially.
Prosecutors are tackling this problem with a two-pronged approach: educating potential victims and tracking the billions in stolen cryptocurrencies.
As Ben Young – not his real name – talks about how he lost his family’s life savings and the trust of his wife and high school daughter, his fingers search for something to hold on to.
It all started with an online message and then with messages from someone he thought was a former colleague..
“I was taking care of my dying father. The person was showing compassion and sympathy for me,” Young said.
The man in his 50s is a Bay Area victim of a “pig slaughter” cryptocurrency investment scam.
Young requested anonymity, fearing he could lose his job in finance.
“It hasn’t been easy to deal with the guilt I feel every single day,” she said.
The FBI estimates that sophisticated scammers abroad defrauded victims of more than $3.3 billion last year alone, with many victims too embarrassed to report their losses.
Scammers steal identities, befriend people through social media platforms, and eventually convince them to invest in fake crypto accounts.
“You really have to be wary of people trying to contact you,” West said.
West and the Reach Task Force are leading the way in the fight against high-tech organized crime by sharing with local police, state agencies, the feds and international law enforcement how they have tracked and recovered stolen crypto funds.
“These scammers move money too quickly. We don’t have enough tracers in law enforcement to take care of these cases as soon as needed,” West said.
Young initially invested a few thousand, then deposited what he and his wife had saved for their daughter’s college tuition and their $1 million life savings.
“I was blaming myself and I was afraid. I lost faith in myself and sometimes the will to live,” Young said.
West began hearing from victims last year, including Young. Desperate requests for help arrive every day.
“It’s constant. They’re all such different tragic stories,” West said.
West’s team helped Young recover about 8% of his life savings, or about $100,000. Law enforcement believes the best way to disrupt and minimize the scam is to increase awareness.
“Education is key here, because they don’t change their tactics. They’re doing the same thing over and over again. It works because you haven’t heard of it,” West said.
This is also why Young shares his warning: So anyone may not be vigilant about life-altering and increasing online scams.
“At least I can help other victims who are in desperate need,” Young said.
Initially a coalition of law enforcement officers, including West, started with about 100 investigators. It has grown more than tenfold in the past year, a telling indicator of the scale and scope of this latest online project.
Authorities say the best defense is to carefully determine whether accepting an online friend or LinkedIn invitation is truly necessary and beneficial.
They say most of these scams are based overseas, in countries like Myanmar and Cambodia, but are led by Chinese criminal organizations.