The U.S. Attorney for the Eastern District of North Carolina said investigators seized nearly $5 million worth of cryptocurrency from a scam dubbed “pig slaughter.”
The seized funds came from a legitimate cryptocurrency company called Tether, which is pegged to the U.S. dollar. Investigators traced the funds to cryptocurrency addresses allegedly involved in laundering criminal proceeds stolen from victims of a cryptocurrency investment scam, a process known as “pig slaughter.”
According to court documents, the criminals approached and recruited victims under the guise of a romantic relationship in order to build trust. Once a relationship was established, the scammers claimed they could make immediate, large profits trading cryptocurrency. The scammers then referred the victims to fictitious cryptocurrency trading platforms that had similar names and appearances to legitimate cryptocurrency trading platforms.
These fake investment platforms are designed to trick victims into investing more by showing them fictitious investment portfolios with unusually large returns on investment. When victims try to withdraw their funds, they are often met with various excuses such as not being able to withdraw the funds and having to pay “taxes” or “penalties” to withdraw the funds, which are just techniques used by the scammers to extract even more money from the victims.
Once a victim's funds are transferred to a cryptocurrency wallet under the fraudster's control, they are quickly moved through many other wallets to hide the nature, origin, control, and ownership of the fraudulent proceeds.
In this case, Federal Bureau of Investigation (FBI) agents and analysts were able to trace victim funds through various cryptocurrency wallets that were allegedly used in furtherance of the fraud and money laundering scheme, some of which contained large amounts of funds that remain subject to seizure and forfeiture.
“Americans are losing their life's savings to investment scams as funds are rapidly transferred to overseas cryptocurrency accounts,” said U.S. Attorney Michael Easley. “In this case, one victim lost his entire individual retirement account to a scam. We are working to recover as much money as we can from criminals, even when they are overseas. We are determined to seize their illegal proceeds and return money to victims.”
“As criminals continue to evolve in the world of cyber-enabled fraud, the FBI and its law enforcement partners must evolve as well,” said Robert M. DeWitt, FBI Special Agent in Charge in Charlotte. “This cryptocurrency seizure is an example of the FBI adapting to the changing criminal environment and fighting for victims of cyber-enabled fraud schemes.”
The Department would like to express its gratitude to Tether for their assistance in effecting the transfer of these assets.
If you have been the victim of a cryptocurrency scam, or any other scam involving the use of the Internet, please report it to the IC3 (ic3.gov) and the FTC (www.reportfraud.ftc.gov).
