Four U.S. citizens have been charged for participating in an illegal scheme that made more than $80 million through cryptocurrency investment fraud.
Defendants – Lu Zhang, 36, of Alhambra, Calif.; Justin Walker, 31, of Cypress, Calif.; Joseph Wong, 32, of Rosemead, Calif.; Hailong Zhu, 40, of Naperville, Ill. – Charged with conspiracy to commit money laundering, concealment of money laundering and international money laundering.
The U.S. Department of Justice announced the arrests of Zhang and Walker, saying they opened shell companies and bank accounts to conduct pig slaughtering fraud and transfer ill-gotten gains domestically and abroad. international financial entity.
If convicted, Zhang and Walker face up to 20 years in prison. Their alleged accomplices remain at large.
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“The hog slaughtering syndicate’s overall fraud scheme involved at least 284 transactions and resulted in victims losing more than $80 million,” the U.S. Department of Justice said. “More than $20 million in victim funds was directly deposited into bank accounts associated with the defendants. . ”
The enforcement action comes as Nigerian national Eze Harrison Arinze was sentenced to three years in prison for his role in a pig slaughter scam that defrauded 34 victims in 13 countries, resulting in losses of $592,000.
Late last month, the U.S. Department of Justice also announced that it had seized nearly $9 million worth of Tether from cryptocurrency addresses allegedly linked to a Southeast Asian organization that exploited more than 70 victims through a pig-killing scam.
Killing Pigs is part of a so-called romance investment scam in which people are targeted on dating apps with fake identities to gain their trust and trick them into investing their money in seemingly legitimate and profitable ventures, often promising a certain period of time. Get a high return on investment. The time span is short.
“After convincing victims to invest, scammers often collect the funds using digital payment platforms or cryptocurrencies to make tracking more difficult,” Trend Micro said in a report detailing the scam.
“Once they receive a large amount of money from their victim, or once the victim attempts to withdraw funds from their account, the scammer will suddenly become unreachable, or the brokerage platform will be unable to transfer funds. Scammers can also delete their online status or create new identities, making it difficult for victims to recover lost funds.”
One of the emerging trends in this area involves the use of group chats, which shows that cybercriminals are adapting and refining their tactics to make them more effective.
In these cases, potential victims are added to fake investment chat groups under their control. If the target expresses interest in investing in cryptocurrency, the conversation moves to a one-on-one chat, where they are introduced to a fake brokerage platform and convinced to transfer funds to the service.
According to a report by the FBI’s Internet Crime Complaint Center (IC3), losses caused by cryptocurrency investment fraud reached an unprecedented $2.57 billion in 2022, an increase of 183% from 2021.
“A significant portion of these phone numbers can be traced back to leaked databases containing personal information,” the cybersecurity firm said. “More than half of the numbers added to fake group chats were found in such databases, indicating that Scammers may use the leaked information to find their next victim.”
