Federal Prosecutors Disrupt $80 Million Pig-Butchering Scheme
The U.S. Department of Justice has announced that federal prosecutors have disrupted a pig-butchering scheme that defrauded victims of over $80 million. This enforcement action is one of the most significant crackdowns on this type of scam, which costs U.S. citizens hundreds of millions annually.
Four Men Indicted and Two Arrested
As part of the investigation, four individuals have been indicted, and two arrests have been made. The defendants, Lu Zhang, Justin Walker, Joseph Wong, and Hailong Zhu, allegedly conspired to launder the illicit proceeds of their scam. Zhang and Walker were arrested and appeared in court in Los Angeles.
An Expanding Scam Strategy
Pig butchering is a prevalent scam that involves reaching out to victims through cold-messaging and establishing a rapport with them. Once a bond is formed, scammers convince victims to send large sums of money to fake investment platforms under the pretense of teaching them how to make substantial profits trading cryptocurrencies or other assets.
Fraudulent Exchanges and Fictitious Gains
The investment platforms used by the scammers are fraudulent, and any reported gains are falsified. Eventually, the scammers disappear with the funds, often leaving behind millions of dollars in profits.
Shell Companies and Money Laundering
The defendants allegedly used shell companies registered in California to funnel their profits into domestic and international bank accounts. They operated accounts at various banks, including Bank of America and JPMorgan Chase, where victims sent their transfers. The money would then be moved to domestic accounts in their own names or international accounts in Hong Kong or a Bahamas bank associated with money laundering and the stablecoin Tether.
Hot Take: Taking Down a Massive Scam
This recent enforcement action by federal prosecutors highlights the ongoing battle against fraudulent schemes that prey on unsuspecting individuals. The pig-butchering scam, with its deceptive tactics and significant financial losses, serves as a reminder for everyone to be vigilant and cautious when engaging in financial transactions or investments. It also underscores the importance of robust law enforcement efforts to disrupt and dismantle criminal networks involved in such scams. By holding perpetrators accountable, authorities are sending a strong message that these illicit activities will not go unpunished.
Source: NBC News
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