Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:03] Speaker B: Hey, everyone, and welcome to today's behind the Scams podcast. I'm Nick, and as always, I'm joined by my co host and my wife, Sue.
[00:00:10] Speaker A: Hi, everyone. Excited to be here.
[00:00:11] Speaker B: Today we're diving into a really important and frankly, scary topic. Pig butchering scams. These scams are becoming increasingly prevalent in the world of cryptocurrency and their devastating lives.
[00:00:25] Speaker A: Definitely scary. I've heard bits and pieces about this, but honestly, I'm not entirely sure what pig butchering even means in this context. It sounds horrific.
[00:00:36] Speaker B: Yeah, the term itself is pretty disturbing. It's a metaphor, really, that describes how scammers fatten up their victims, building relationships and trust before ultimately butchering them financially. We'll be unpacking exactly how these scams work, the devastating impact they have, and most importantly, what you can do to protect yourself.
[00:00:58] Speaker A: Right, because prevention is key here, I'm eager to learn more, especially about how these scammers manage to gain people's trust. It's hard to believe people fall for this, but clearly they do.
[00:01:10] Speaker B: Absolutely. It's a sophisticated blend of emotional manipulation and financial trickery. We'll also touch on some recent case studies, the legal processes involved, and the long term implications for the cryptocurrency space.
[00:01:26] Speaker A: Sounds like we have a lot to cover, so let's get started. Nick, what exactly is pig butchering?
[00:01:33] Speaker B: So, sue, as you mentioned, the term pig butchering is pretty jarring. It's actually a direct translation of a Chinese term, sha ju pan, which refers to the process of fattening a pig before slaughter.
In the context of these scams, it perfectly captures how these fraudsters operate. They cultivate relationships, shower their victims with attention, build trust, essentially fattening them up before ultimately taking everything they can.
[00:02:05] Speaker A: Wow, that's a chilling analogy. So it's not a quick con. It sounds like it takes time and planning.
[00:02:12] Speaker B: Exactly. It's a long game. These scammers are patient.
They'll spend weeks, sometimes months, building rapport, sharing personal stories, creating a false sense of intimacy. They want their victims to feel special, to feel like they've found a genuine connection. This grooming process is crucial to lowering the victim's defenses, making them more susceptible to manipulation.
[00:02:41] Speaker A: It's so insidious. It preys on people's basic human need for connection and belonging. Do they always use romantic angles, or are there other approaches they take?
[00:02:51] Speaker B: Romance is a common tactic, especially through dating apps. But they can also pose as potential friends or even business partners. They might connect through social media, online gaming platforms, or even just through random messages. The key is to find a vulnerability, Something they can exploit to build that connection.
[00:03:13] Speaker A: So the cultural context of the term really emphasizes the manipulative aspect, the deception involved. It's not just about stealing money. It's about deliberately breaking someone's trust for personal gain. That's really messed up.
[00:03:30] Speaker B: Absolutely. And that's why it's so important to understand the psychological manipulation at play. They often start with flattery and empathy, Making the victim feel seen and understood. They might share personal struggles or vulnerabilities, Creating a sense of shared experience.
Over time, this fabricated intimacy creates a powerful bond, Making it even harder for the victim to question their motives.
[00:03:58] Speaker A: It sounds like they're master manipulators Playing on people's emotions.
Are there any specific cultural nuances to be aware of, Especially given the term's origin in Chinese culture? I'm wondering if there are any specific tactics they use that might be less obvious to those outside of that cultural context.
[00:04:21] Speaker B: That's a good question.
While the core tactics Building trust, creating intimacy, Exploiting vulnerabilities Are universal, There can be some cultural nuances. For example, they might leverage cultural values like respect for elders or family obligations to manipulate their victims. They might also use language or idioms that resonate within a specific culture to further build rapport and establish credibility.
Understanding these nuances can be helpful, but it's important to remember that anyone can be a victim, Regardless of their cultural background. So, moving on from the origin, let's dive deeper into the psychological tactics these scammers employ. They're incredibly skilled at reading people and identifying vulnerabilities. They often start by creating a sense of urgency, Pushing victims to act quickly without thinking. Classic high pressure sales tactic, Right?
[00:05:23] Speaker A: Right. That makes sense. Preying on that fear of missing out.
[00:05:27] Speaker B: Precisely.
They might present a limited time opportunity or claim that the investment is about to skyrocket. This pressure tactic short circuits rational decision making victims more likely to fall for the scam.
[00:05:42] Speaker A: Oh, wow. So it's a combination of emotional manipulation and high pressure tactics. A dangerous cocktail.
[00:05:50] Speaker B: Absolutely. And they're experts at using fake profiles to appear more relatable. They might steal photos from social media or even create entirely fabricated identities. They might pretend to be successful investors Sharing fabricated success stories to entice victims. Look how much I've made. You can too.
[00:06:13] Speaker A: That's scary. It makes it so. So much harder to distinguish between genuine connections and these manipulative predators. It's like they're building these elaborate facades of trustworthiness.
[00:06:27] Speaker B: That's exactly what they're doing, they often weave intricate narratives, sometimes involving family emergencies or urgent financial needs. To further manipulate their victims into sending money, they play on empathy and compassion, tugging at the heartstrings to get what they want.
[00:06:47] Speaker A: It's truly despicable. What are some red flags that people should look out for? How can they protect themselves from falling prey to these tactics?
[00:06:57] Speaker B: Well, as we discussed, unsolicited messages, especially on dating apps or social media, should always raise a red flag. Pro promises of guaranteed high returns with little to no risk are another obvious warning sign. No legitimate investment offers that kind of certainty.
Also, be wary of anyone who pressures you to invest quickly or demands money up front. Take your time, do your research, and never feel pressured to make a financial decision on the spot.
[00:07:31] Speaker A: That's good advice. So unsolicited contact, unrealistic promises, and pressure to invest quickly, those are three big red flags to watch out for. Anything else?
[00:07:42] Speaker B: Yes. Another red flag is inconsistencies in their stories or information they share. If something feels off or doesn't add up, trust your gut. Also, pay attention to how they react when you ask questions or express skepticism. If they become defensive, evasive or angry, that's a major warning sign. And of course, never share personal financial information like bank account details or credit card numbers with someone you've only met online, no matter how much you trust them.
[00:08:16] Speaker A: That's incredibly helpful advice. It's chilling to think how easily people can be manipulated, especially when their emotions are involved. This really underscores the importance of being cautious and informed in the online world.
[00:08:32] Speaker B: Alright, so let's move on to a recent case that really brought this pig butchering scam to light. Four individuals were charged with laundering millions from these cryptocurrency scams. It really opened my eyes to how widespread this is.
[00:08:47] Speaker A: Wow, millions. That's a staggering amount. Tell me more about this case.
[00:08:52] Speaker B: Yeah, it's a crazy story. One of the key figures, Luzhang, 36, from Alhambra, is facing some serious charges. Along with him, Justin Walker, 31, from Cyprus is also implicated. Then there's Joseph Wong, 32, from Rosemead, who's currently at large, and Hailong Zhu, 40, from Naperville, Illinois, also being sought by authorities.
[00:09:18] Speaker A: So, Nick, was this a nationwide operation?
[00:09:21] Speaker B: Absolutely. The operation spanned multiple states. With Zhang and Walker based in California and Wong and Zhu in Illinois. The scam's reach was pretty extensive. U.S. attorney Martin Estrada noted the scam's tentacles reach far beyond local jurisdictions. It just shows how easily these scams can cross state lines.
[00:09:44] Speaker A: That's disturbing. What Were their roles in the scheme.
[00:09:47] Speaker B: They're accused of conspiring to open shell companies and bank accounts. These shell companies acted as a front, Allowing them to obscure the true nature of their activities and launder the proceeds from the scams. It's a common tactic in financial crimes, Making it much harder to trace the money.
[00:10:06] Speaker A: Shell companies, huh? So they were deliberately trying to hide their tracks. What about the actual mechanics of the scheme? How did they launder the money?
[00:10:15] Speaker B: The indictment alleges they transferred funds from the scams to various financial institutions, Both domestically and internationally. This created a complex web of transactions Designed to make it nearly impossible for authorities to follow the money trail. They were basically using these shell companies to move money around, Making it look like legitimate business activity.
[00:10:40] Speaker A: That's incredibly sophisticated. It sounds like a very well organized operation.
[00:10:44] Speaker B: It was. And that makes these scams even more dangerous. They're not just opportunistic individuals. They're often part of larger, sophisticated criminal networks. This particular group allegedly caused over $80 million in losses to victims. $80 million?
[00:11:03] Speaker A: I am that scene. Unbelievable. It's devastating to think about how many lives have been impacted by this. What's the long term impact of these kinds of scams, not just for the victims, but for the cryptocurrency industry as a whole?
[00:11:19] Speaker B: Well, for the victims, the financial and emotional toll can be devastating. Many lose their life savings, and the emotional scars can last for years. They often feel ashamed, betrayed, and struggle to trust others. It's a terrible thing. But beyond the individual victims, these scams also damage the reputation of the entire cryptocurrency industry.
[00:11:45] Speaker A: Right. It feeds into that narrative that cryptocurrency is just a haven for criminals.
[00:11:50] Speaker B: Exactly. Many people associate cryptocurrency with fraud, which can discourage potential investors. This negative perception can hinder innovation and growth in a field with so much potential. And of course, as more victims come forward, Regulatory bodies are likely to impose stricter regulations, which can impact legitimate businesses and the development of new technologies. It's a delicate balance.
This case really highlights the dark side of the cryptocurrency world. It's essential that people understand the risks and take steps to protect themselves.
Thanks for sharing this information, Sue. It's incredibly important.
[00:12:33] Speaker A: Wow, Nick, thanks. It is incredibly important.
[00:12:36] Speaker B: So, sue, now that we've discussed the specifics of this case, let's delve into the legal proceedings and the ramifications.
The legal journey from indictment to trial can be pretty complex. There are several steps involved, and it can be confusing for those unfamiliar with the judicial system.
[00:12:58] Speaker A: Yes, I imagine it can be quite daunting for victims, especially when they're already dealing with the emotional and financial fallout of the scam. Can you break down the process for us?
[00:13:09] Speaker B: Absolutely. It starts with the indictment, which is a formal accusation that a person has committed a crime. It's important to remember, though, that an indictment is not a conviction. It simply means a grand jury has found enough evidence to formally accuse someone. The defendants are still presumed innocent until proven guilty in court.
[00:13:34] Speaker A: Right. Innocent until proven guilty. A cornerstone of our legal system. So in this case, what were the specific charges? Innocent. The indictment.
[00:13:45] Speaker B: In this case, they faced serious charges like conspiracy to commit money laundering, concealment, money laundering, and international money laundering. Each charge carries a maximum sentence of 20 years in federal prison.
[00:14:00] Speaker A: Wow, 20 years. That's a long time. What kind of legal defenses do defendants typically have in these kinds of cases?
[00:14:08] Speaker B: Well, they might argue that they were unaware of any illegal activity, or they might challenge the evidence presented against them. You know, with the complexity of cryptocurrency transactions, it can be difficult to trace the origins of funds, which can sometimes make prosecution tricky.
[00:14:27] Speaker A: That's a good point. The complexities of cryptocurrency transactions must make investigations incredibly challenging. How do investigators even begin to unravel these intricate webs of transactions?
[00:14:41] Speaker B: It's definitely not easy. They often rely on specialized software and forensic accountants to analyze the blockchain and follow the money trail. It's a painstaking process, but essential for building a solid case. Another issue is that these transactions often cross international borders, which adds another layer of complexity.
[00:15:03] Speaker A: I can see how that would make things difficult. What role do federal agencies play in these kinds of prosecutions?
[00:15:10] Speaker B: Federal agencies like the U.S. secret Service, particularly their Global Investigative Operations center, are crucial. They work with the Department of Justice to ensure a thorough investigation. These agencies have the resources and expertise to tackle these complex financial crises. Crimes, especially those involving new technologies like cryptocurrency. Their involvement really emphasizes how seriously these charges are taken.
[00:15:39] Speaker A: It's reassuring to know that these agencies are dedicated to pursuing these cases. So going back to the legal process, what's the timeline typically look like from indictment to trial?
[00:15:51] Speaker B: Well, it varies, but in this case, the trial date was set for February 6, 2024. In the meantime, the defendants entered not guilty pleas. Zhang was detained while Walker was released on bond. These proceedings are usually closely watched because of the significant implications for victims and the fight against cryptocurrency fraud in general. It also can set a precedent for future cases.
[00:16:21] Speaker A: So the outcome of this case could potentially influence how These types of scams are prosecuted in the future?
[00:16:27] Speaker B: Absolutely. It could impact future cryptocurrency regulations and even how investigations are conducted. It's a landmark case in many ways. Alright, sue, let's talk about the deceptive platforms scammers use and the red flags potential victims should look out for. These platforms can look incredibly legitimate, complete with professional looking websites, testimonials, you name it. But they're all smoke and mirrors designed to steal your money.
[00:16:59] Speaker A: It's scary how sophisticated these scams have become. So what are some examples of these fraudulent platforms?
[00:17:06] Speaker B: Well, you often see websites promising ridiculously high returns with little to no risk.
Invest a little, get rich quick kind of thing.
Also, there are apps that mimic real investment platforms, but they're controlled by the scammers. And of course, there are fake social media accounts promoting these bogus platforms.
[00:17:31] Speaker A: Wow, that's alarming. It sounds like they put a lot of effort into making these platforms look real. How can people tell the difference? What are some warning signs?
[00:17:41] Speaker B: That's a great question. First, unsolicited messages from strangers, especially on dating apps. Be very wary of those.
Second, promises of, like I said, high returns with little or no risk. If it sounds too good to be true, it probably is. And third, pressure to invest quickly or to send money to, you know, secure a deal.
[00:18:08] Speaker A: So basically, anything that feels off is probably a scam. It's essential to trust your gut feeling, right?
[00:18:15] Speaker B: Exactly. Your instincts are often right. If something feels wrong, it likely is. Don't let yourself be pressured, especially if you're unsure.
[00:18:24] Speaker A: It's unbelievable how these scammers prey on people's hopes and dreams. These fake platforms are designed so, so meticulously. Like, do they really put that much effort into making them seem real?
[00:18:38] Speaker B: Oh, absolutely. They invest a lot of time and resources into creating these convincing facades. They'll even display fake gains to entice victims into investing more. It's all part of the pig butchering process. They fatten you up with false promises before taking everything. Then once the money is sent, poof, it's gone, vanished into thin air.
[00:19:00] Speaker A: It's just mind boggling. Are there any ways to check if a platform is legitimate? Like, are there resources people can use to verify these things?
[00:19:09] Speaker B: Yes, there are a few things you can do. First, check for licensing. Legitimate platforms should have licenses from regulatory bodies. If they claim to be regulated, verify it. Don't just take their word for it.
[00:19:24] Speaker A: Good point. What else?
[00:19:26] Speaker B: Look for clear contact information a real company will provide a phone number, a physical address, those sorts of things. If you can't find any contact details, that's a major red flag.
[00:19:39] Speaker A: Right? That makes perfect sense. So many of these scams probably operate from overseas, making them even harder to track.
[00:19:46] Speaker B: Exactly.
And finally, be wary of unrealistic promises like guaranteed returns. As a rule, investments always have a degree of risk. If they tell you there is no risk or that the returns are outrageous, it's almost certainly a scam. Remember, a well informed investor is the hardest target for these scammers. Recently, another POG butchering case has emerged involving Chinese actor Wang Xing. He was lured to Thailand under the pretense of a film shoot, only to be trafficked into Myanmar's Mayawadi region and coerced into conducting online scams. This incident has reignited concerns about the pervasive pig butchering scam networks in Southeast Asia.
[00:20:34] Speaker A: It's alarming how these criminal syndicates are evolving. They're not only deceiving victims, but also employing advanced technologies like deepfakes to create convincing fake identities. This makes it increasingly difficult for individuals to discern genuine interactions from fraudulent ones. Moreover, the use of satellite Internet services such as Starlink enables these operations to function in remote areas with limited connectivity, further complicating efforts to combat them.
[00:21:08] Speaker B: The scale of these operations is staggering. Reports suggest that over 220,000 trafficking victims from more than 100 countries are being held in scam compounds across Myanmar and Cambodia. These victims are often young tech savvy individuals seeking employment only to find themselves trapped and forced into fraudulent activities. The financial impact is equally concerning, with cyber scamming in Southeast Asia generating over $43.8 billion annually.
[00:21:44] Speaker A: What's particularly distressing is the human cost. Many of these scammers are themselves victims of human trafficking, coerced into participating in these schemes under threat of violence. The psychological manipulation they endure is akin to brainwashing, making it incredibly challenging for them to escape or seek help.
[00:22:08] Speaker B: Efforts to combat these networks are underway. For instance, Lao authorities have issued ultimatums to notorious scam hubs like the Golden Triangle Special Economic Zone, demanding the shutdown of scam operations. However, the effectiveness of these measures remains to be seen, given the deep rooted nature of these criminal enterprises.
[00:22:30] Speaker A: So, Nick, it really is a complex issue that requires international cooperation and a multifaceted approach.
Raising awareness is crucial, as is implementing robust legal frameworks to protect victims and prosecute perpetrators. Individuals must also remain vigilant, especially when approached with unsolicited investment opportunities or online relationships that seem too good to be true.
[00:23:00] Speaker B: Absolutely, Sue. The evolving tactics of these scam Networks highlight the importance of staying informed and cautious. By sharing these stories and insights, we hope to equip our listeners with the knowledge to protect themselves and support broader efforts to dismantle these exploitative operations.
[00:23:19] Speaker A: Nick, there must be tons of victim stories out there. Do you know of stories of innocent victims being duped by heartless SK scammers?
[00:23:26] Speaker B: Unfortunately, sue, there are way too many victims out there.
[00:23:29] Speaker A: This pig butchering scam is so scary, yet it has become so common.
[00:23:34] Speaker B: It is very scary. I recently came across another real case involving a woman we'll call Lynn to protect her identity.
She was nearing retirement and had diligently saved nearly $1 million. Her ordeal began with an unexpected message on WeChat from someone named Vincent, who claimed to have contacted her by mistake.
This seemingly innocent interaction led to a month long deception that wiped out her entire retirement savings.
[00:24:07] Speaker A: It's heartbreaking, Nick.
[00:24:09] Speaker B: It really is, Sue. Vincent gradually built a rapport with Lynn, engaging in casual conversations that evolved into discussions, discussions about lucrative investment opportunities. He portrayed himself as someone with insider knowledge in gold trading, even sharing convincing images of supposed trading activities. To gain her trust, he suggested an initial investment of $10,000, which he returned with profits, making the scheme appear legitimate. Encouraged by these apparent gains, Lynn continued to invest larger sums, eventually draining her IRAs and savings.
[00:24:50] Speaker A: The psychological manipulation in these scams is profound.
[00:24:54] Speaker B: Yeah, these scammers are professional manipulators.
Vincent's tactics included sending fabricated screenshots showing Lynn's investments growing to over $4 million. When she began to run out of funds, the pressure intensified. She received urgent alerts claiming her money was locked and that the FBI was involved, demanding nearly $3 million to unlock her account.
Vincent even suggested extreme measures, like selling her house or approaching loan sharks to raise the necessary funds. It wasn't until a pivotal moment when Lynn realized she couldn't provide more money, that the grim reality of the scam became apparent.
[00:25:41] Speaker A: So how does this story end? I assume it's as heartbreaking as most all pig butchering scams.
[00:25:48] Speaker B: Well, your hunch is right. According to the victim, one night she stood in her kitchen and was going frantic over the need to get $500,000 to unlock her supposed account. She was in an absolute state of his hysteria.
[00:26:02] Speaker A: These scammers are so heartless.
[00:26:04] Speaker B: These guys are beyond heartless. Well, the victim finally said no to the scammer. This only arose after she came to the realization that all her money was gone. She finally accepted the fact that it was all just a scam.
[00:26:18] Speaker A: Did she ever hear back from the scammer, after she cut him off.
[00:26:22] Speaker B: Oh, yeah. This scammer just couldn't let it go. The scammer, Vincent, had a parting message for her when she said she had no more money to give.
[00:26:30] Speaker A: I can only imagine what that was.
[00:26:32] Speaker B: When he realized he was not going to get any more, he said, oh, well, I admit it, you stupid fat cow. I've got your money. Good riddance.
[00:26:43] Speaker A: That's horrible, Nick. But let's just say I am not surprised.
[00:26:47] Speaker B: Me neither. Sue. These guys never show any remorse. So people never think that smooth talking cat on the other end of the phone has your interests in mind. He doesn't. In fact, it's the opposite. He just wants all your money and to move on to the next victim.
[00:27:03] Speaker A: Another sad victim story in a long line of victim stories.
[00:27:07] Speaker B: That's right. Okay, let's shift gears a bit and talk about how to protect yourself from these pig butchering scams. Even if you're experienced with crypto, it's important to be cautious. There are safe ways to invest in cryptocurrency. It's not all a minefield, thankfully.
[00:27:25] Speaker A: Yes, please. After hearing all that, I need some reassurance that there are safe ways to invest. What are some guidelines people should follow?
[00:27:33] Speaker B: Well, first off, if you're new to cryptocurrency, start small. Don't jump in with a huge investment right away.
Test the waters, learn the ropes. Get a feel for how things work before committing significant funds.
[00:27:48] Speaker A: That's good advice for any investment. Really. Start small and learn as you go.
[00:27:53] Speaker B: Absolutely. Second, always use reputable exchanges. Do your research, check their history, read user reviews. Don't just go with the first platform that pops up in a Google search.
[00:28:07] Speaker A: Right, because these scammers often set up fake exchanges that look legitimate. It's so deceptive. Are there any other security measures people should take?
[00:28:21] Speaker B: Yes. Immediately check if the exchange is real or not. This is simple to do by starting with their website history. There are numerous websites to do this. Just Google website verification. A website verification will tell you how long the site has been in existence and other important information.
If the site is new or has poor reviews, run away as fast as you can.
[00:28:46] Speaker A: That's a crucial step and it's easy to set up, thankfully. So are there some basic steps for our listeners to follow for safer investing?
[00:28:55] Speaker B: Yes, there are. And they are so easy to do. Sue, before investing in anything, do your research. I cannot stress this enough. Due diligence is key. Look into the project, the team behind it, the project's goals. Ask yourself what problem does this cryptocurrency solve? Is there even a need for it? Is the team credible? What are other investors saying? You know, get a feel for the overall picture. Don't rush into things just because someone promises you quick riches.
[00:29:32] Speaker A: That makes perfect sense. Nick. It's so important to understand what you're investing in before jumping in head first. It sounds like researching a crypto project is similar to researching a company before buying its stock, right?
[00:29:53] Speaker B: Precisely. It's about minimizing risk. Investing without doing your homework is like, as the saying goes, diving into a pool without checking the water depth. You might land in the shallow end and hurt yourself.
Also, don't forget that cryptocurrency is an extremely risky investment and is not for the faint of heart. There may be the chance of serious returns, but there is also the chance of serious losses.
[00:30:23] Speaker A: Ouch. That's enough to scare me. Speaking of getting hurt, what resources are available for people who have already fallen victim to these scams? It must be devastating.
[00:30:35] Speaker B: Absolutely. It can be incredibly traumatic, both financially and emotionally. But there is help out there. The Internet Crime complaint center, or IC3, is a great resource. You can report scams there and get advice. The Federal Trade Commission, the FTC also provides information on consumer rights and protections.
[00:30:57] Speaker A: Those are valuable federal resources. What about local support?
[00:31:01] Speaker B: Of course, victims should also report the crime to their local law enforcement. They can help with the investigation and offer assistance. And if significant funds have been lost, seeking legal advice is definitely something to consider.
[00:31:20] Speaker A: So there are legal avenues victims can pursue as well. What about the emotional toll? Where can victims turn for support in dealing with the emotional aftermath of these scams?
[00:31:32] Speaker B: There are several organizations that offer support and guidance to victims of cybercrime. Support groups can be incredibly helpful, offering a safe space to share experiences and connect with others who understand what they're going through. It's important for victims to know they're not alone. Many have faced similar situations, and there is help and support available.
[00:31:55] Speaker A: So beyond individual actions, what can communities do to combat these pig butchering scams? It really takes a collective effort.
[00:32:04] Speaker B: I agree. It's a problem that affects everyone directly or indirectly.
[00:32:08] Speaker A: So what can be done at the community level?
[00:32:11] Speaker B: Well, community initiatives are crucial for spreading awareness. Think local workshops, seminars, online webinars, anything that educates people about the dangers of cybercrime. Schools and community centers are often great venues for these events.
[00:32:26] Speaker A: That's a good point. Education is key, especially for vulnerable populations who may be more susceptible to these scams.
[00:32:33] Speaker B: Exactly. And individuals can play a role too, by Participating in or even organizing these initiatives, they can help others stay informed and safe. Awareness truly is the first line of defense.
[00:32:48] Speaker A: Absolutely. What about advocating for tighter regulations? Does that play a role in combating these scams?
[00:32:54] Speaker B: Oh, absolutely. Advocacy is crucial. Individuals and organizations need to push for stricter regulations to protect consumers from fraudulent activities. Policymakers need to understand the real world impact of these scams. They need to hear from victims, understand the tactics used so they can create more effective laws.
[00:33:18] Speaker A: It's about holding these criminals accountable and making it more difficult for them to operate.
[00:33:23] Speaker B: It's all about empowering individuals with the knowledge they need to protect themselves.
[00:33:28] Speaker A: What about the victims themselves? What role do they play in this fight?
[00:33:32] Speaker B: Victims coming forward, though it can be difficult, is incredibly important.
Sharing their stories, while often painful, can be incredibly empowering for themselves and others. Their experiences can help others recognize similar scams and avoid becoming victims. It also contributes to a larger effort to combat cybercrime as a whole.
[00:33:55] Speaker A: That's a powerful message. It takes courage to come forward, but it can make a real difference. It reminds me of the saying, knowledge is power. The more we know, the better equipped we are to protect ourselves and our communities. Nick, I think the real life stories out there help bring home the points about scams and scammers. I know you have a ton of them. Do you have another quick story about a pig butchering scam victim we can discuss?
[00:34:24] Speaker B: Oh yes, sue, there are plenty to choose from.
[00:34:26] Speaker A: I know way too many.
[00:34:28] Speaker B: Well, since you asked, Sue, I've got plenty of other stories. How about this one? This scam story started in the late summer of 2022. The victim, just going about her business, was contacted by a scammer through the messaging feature of a real estate application. It seemed innocent at first, but as a conversation became more personal and eventually romantic, the scammers suggested moving their chats to a standard messaging app. Now this is a classic move in the pig butchering scams, so watch out for it.
[00:35:11] Speaker A: Nick. It's always about gaining trust first and almost immediately. In this story, the scammer brought up cryptocurrency trading. He shared information about a supposed crypto exchange platform marketed as being perfect for beginners. Seemed harmless, right? Except that platform was completely fake.
[00:35:30] Speaker B: Yes, it was completely fake.
The victim was directed to download a third party app through a website. Another red flag that often gets overlooked. After setting it up, the scammer convinced her to buy about $200,000 worth of cryptocurrency from a well known centralized exchange.
[00:35:51] Speaker A: I remember this story, and from what I recall this is where things spiraled out of control. She sent that cryptocurrency to an address the scammer claimed was tied to her trading account on that fake platform. Almost instantly, the platform showed her so called profits skyrocketing. 20 to 30% gains right off the bat.
[00:36:17] Speaker B: Good memory, Sue. This is when the scammer pounced. He urged her to invest even more, and unfortunately, she did. An additional $1.1 million.
Over the next several weeks, the scammer continued luring her deeper, convincing her to invest more and more. And get this, she even shared the platform with family members, thinking she was onto something good. In total, seven people sent about $5.5 million to this fake trading site.
[00:36:47] Speaker A: This is another sad fact about scams. They often bring in other innocent people, including friends and family.
[00:36:55] Speaker B: They do. The platform used in this story displayed those investments as having doubled in value. Imagine seeing that on your screen, thinking you've made millions. So in late December 2022, she tried to withdraw a significant portion of those funds. But surprise. She was hit with a demand for a 200,000 withdrawal tax.
[00:37:21] Speaker A: Wow, this is quite a scamming operation.
[00:37:23] Speaker B: It certainly is, Sue. Believing she'd soon access millions, she paid the fee. Sadly, that was just another trick. The scammer's final grab at her money. When her funds still didn't come through, reality hit. She and her family had been scammed. That's when she reached out to the US Secret Service for help.
[00:37:46] Speaker A: Thankfully, the Secret Service's San Francisco office stepped in. Using information the victim provided, they traced the flow of funds through dozens of addresses across multiple cryptocurrencies.
The scammer moved the victim's original USDC tokens into dai, then swapped those into usdt, a classic laundering tactic to throw off investigators.
[00:38:11] Speaker B: But investigators had an edge. They set up an alert system that notified them every time funds moved from those monitored wallet addresses. These alerts often come through even before transactions are fully registered on the blockchain, giving law enforcement that crucial head start.
[00:38:30] Speaker A: It's a game of timing. Scammers often let funds sit in unhosted wallets for days, even weeks. But the real danger is when those funds are transferred to an exchange for cashing out. That's when investigators have to act fast.
[00:38:45] Speaker B: And that's exactly what happened when the funds finally moved from the scammer's unhosted wallet to an exchange. The Secret Service got an alert. They reacted in real time, securing a seizure warrant within hours.
[00:39:00] Speaker A: Address level tracing was key here. It allowed the team to Pinpoint exactly how much belonged to these specific victims, rather than relying on broader entity level tracking. In the end, they managed to recover about $5 million of the stolen funds.
[00:39:18] Speaker B: Yes, they did. And it was a massive win for the good guys.
While not all scams end with this kind of recovery, it's encouraging to see law enforcement leveraging technology to fight back. Hopefully with more training and blockchain tracing, these success stories become the rule, not the exception.
[00:39:39] Speaker A: So, Nick, asset forfeiture is a fantastic tool for law enforcement, isn't it?
[00:39:44] Speaker B: It really is.
During my career, I used asset forfeiture seizure warrants in many investigations.
Many times the crooks were more concerned with their new Maserati being seized than they were about their potential time in jail for the crimes they had committed.
Greed is their driver.
[00:40:06] Speaker A: So, Nick, as we wrap up, what are some of the key takeaways our listeners should remember about pig butchering scams?
[00:40:14] Speaker B: Well, Sue, I think the most important thing is to be aware that these scams exist and there is no sign of them slowing down. They're sophisticated, they prey on emotions, and they can happen to anyone. It's not just about losing money. It's about the emotional toll it takes on victims.
[00:40:36] Speaker A: Right. And remember, these scammers are masters of manipulation. They build trust, they create a sense of urgency, and they use sophisticated tactics to lure their victims. Knowing the red flags is so important.
[00:40:52] Speaker B: Definitely. Knowing the red flags, like unsolicited messages, promises of high returns, and pressure to invest quickly, can help people avoid falling victim.
[00:41:04] Speaker A: I know I repeat the following like a broken record, but if something feels off, trust your gut. It probably is. Don't be afraid to ask questions, do your research and seek advice if you need it. There are resources available to help. Your upfront homework could save you a lot of money and headaches.
[00:41:24] Speaker B: Absolutely. Organizations like the IC3, the FTC and local law enforcement can provide support and guidance. And remember, you're not alone. Many people have faced similar situations and help is available.
[00:41:39] Speaker A: It's also crucial to remember that safe investment practices can significantly reduce your risk. Start small, use reputable exchanges, and always enable two factor authentication.
[00:41:53] Speaker B: And never ever feel embarrassed or ashamed if you become a victim.
Coming forward and reporting these scams is crucial not only for your own recovery, but also to help prevent others from falling prey.
[00:42:08] Speaker A: Exactly. Community awareness and advocacy are vital in this fight. By spreading the word and pushing for tighter regulations, we can create a safer digital landscape for everyone.
[00:42:20] Speaker B: So to our listeners, stay informed, stay vigilant, and stay safe. In the digital age, knowledge is power. And by empowering ourselves with information, we can protect ourselves and our communities from these devastating scams. This is Nick saying Bye for now to our listeners.
[00:42:40] Speaker A: Thanks for tuning in. We hope this information empowers you to stay safe in this fast paced world of ours. As always, stay safe, stay alert and stay scam free. Bye for now.
