Scammers allegedly used the seized accounts to launder funds acquired via cryptocurrency confidence scams, known as “CryptoRom” or “pig butchering.”
The $112 million linked to investment scams were dispersed over six separate accounts, used to launder funds of various cryptocurrency confidence scams, the US Department of Justice announced.
The schemes involve fraudsters cultivating long-term relationships with victims online to coax them to make cryptocurrency investments. The catch is that the transferred funds end up in the swindler’s pockets, unbeknownst to the victims.
The long-term nature of the scam earned it the label “Sha Zhu Pan,” a Chinese phrase that means “pig butchering.” Crooks usually target victims through social networks and dating websites.
The scheme often involves faking a romantic interest in the victim, earning the scheme the title of “cryptocurrency romance” or “CryptoRom.”
“These particularly vicious frauds – where scammers carefully cultivate relationships with their victims over time – have devastated families and cost individuals their life savings,” Assistant Attorney General Kenneth Polite said.
Crooks work slowly and meticulously to develop a bond with the victim over several months. Eventually, scammers introduce the idea of trading in crypto. Elaborate schemes involve a host of dedicated scam artists: a romantic interest in the lead role, supported by a fake investment advisor and customer support staff.
Initial “investments” are often small, so as not to spook the victim. Since crooks control fake investment websites, the investment is made to look as if it provides hefty returns, convincing victims to invest ever larger amounts of money.
According to the FBI’s Internet Crimes Complaint Center (IC3), investment fraud is the most common scam, totaling $3.31 billion in losses in 2022, a 183% increase from 2021.
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