An investigation into cryptocurrency investment scams known as “pig cutting” led to the seizure of around $112 million, the US Department of Justice reported on Monday.
The scams were carried out after cultivating “online relationships with the victims, which ultimately lead them to invest in fraudulent cryptocurrency trading platforms,” according to court documents.
The term “carnage” is derived from what scammers called “grossing” victims “who they believed to be in a romantic relationship” or other interactions with people who gained people’s trust.
The funds handed over by the victims were directed to fraudulent accounts and not to investments. The scammers allegedly fabricated “websites or mobile apps to display a fake investment portfolio with high profits,” the statement said.
Seizures were approved for six cryptocurrency accounts by judges in Los Angeles and the districts of Arizona and Idaho. The funds of 10 of the victims identified in this case were found in the accounts.
“In the Los Angeles case, a United States trial judge authorized the seizure of an account containing approximately $66.4 million in various cryptocurrencies after finding probable cause that the funds came from electronic fraud schemes,” the statement said.
One of the victims was contacted by LinkedIn and lost around $2.5 million. The woman transferred her funds to an account recommended by the scammer identified as Fei Kuang, but when she wanted to “withdraw her funds, she was told she had to pay 20% ‘tax'”.
“Once victims make an initial ‘investment’, platforms claim to show substantial profits. Sometimes victims are even allowed to withdraw some of these initial profits to build trust in the scheme. This is only ‘after a large investment victims discover they cannot withdraw their funds,’ the statement said.
U.S. Attorney Martin Estrada said that “using the methods of traditional scammers, high-tech scammers have taken advantage of the hype surrounding cryptocurrency to encourage countless numbers of Americans to invest in get-rich-to-get-rich schemes. quickly”.
The FBI’s Internet Crime Complaint Center (IC3) reported that in 2022, this type of fraud resulted in a total loss of $3.31 billion. This meant an increase of 183% compared to 2021.
If you or someone you know thinks you may have been a victim of this type of fraud, visit www.fbi.gov/cryptoguard, contact your local FBI office (Los Angeles office can be reached by calling 310-477- 6565), call 1-800-CALL-FBI, or report it to IC3.gov.