Four men have been charged in Australia as part of an investigation into a “pig butchering” ring defrauding unsuspecting crypto investors of more than US$100 million world-wide.
The four men, aged between 19 and 27, are Chinese nationals who worked as part of a larger organized crime syndicate that “employs a sophisticated mix of social engineering techniques, including the use of dating sites, employment sites and messaging platforms to gain the victim’s trust before mentioning investment opportunities,” the Australian Federal Police said in a press release.
Dubbed “pig butchering” by the FBI, this scheme involves fraudsters posing as successful cryptocurrency traders to entice victims into making purported investments providing fictitious returns to encourage additional investments.
Helping conceal the scam, victims are directed to both fraudulent and legitimate investment applications that deal in foreign exchange and cryptocurrency, which have been maliciously manipulated to show a false positive return on investments, according to the AFP.
“The syndicate recruits victims to subscribe to a financial investment service, and manipulates the data provided through the legitimate application to encourage further investment, while concealing the fact their money has actually been stolen,” the AFP said.
More than US$100 million have been recorded in losses worldwide due this single crime syndicate, with most victims based in the United States, according to an analysis of victim reports by police.
Investigators at AFP’s Cybercrime Operations Eastern Command found the crime ring was using Chinese nationals living in Australia, predominantly students, to build the infrastructure required to carry out their fraud.
On Oct. 20, investigators executed a search warrant at the residence of two Chinese nationals, both 19. Police charged the duo with one count each of recklessly dealing with proceeds of crime, contrary to section 193B(3) of the Crimes Act 1900 (NSW).
Two more Chinese nationals, aged 24 and 27, alleged to be Australian ‘controllers’ of the syndicate, were arrested by AFP investigators a month later, on Nov. 24, at Sydney and Melbourne Airports as the two were attempting to flee to Hong Kong on one-way tickets.
The two were each charged with similar counts carrying a maximum penalty of 15 years in prison.
The two 19-year-olds are scheduled to appear in court on Jan. 19. Their two older counterparts are to face their charges on Jan. 18.
In a public service announcement in October, the FBI outlined ways individuals could recognize pig butchering, including:
- Verify the validity of any investment opportunity from strangers or long-lost contacts on social media websites.
- Be on the lookout for domain names that impersonate legitimate financial institutions, especially cryptocurrency exchanges.
- Misspelled URLs, often with a slight deviation from the actual financial institutions’ website, may be fake.
- Do not download or use suspicious looking apps as a tool for investing unless you can verify the legitimacy of the app.
- If an investment opportunity sounds too good to be true, it likely is. Be cautious of get-rich-quick schemes.