The U.S. Department of Justice announced on Monday, April 3 that federal investigators seized virtual currency worth an estimated $112 million linked to elaborate cryptocurrency investment scams named “pig butchering.”
Judges in Los Angeles, Arizona, and Idaho authorized seizure warrants for six virtual currency accounts, including one based in the Los Angeles area that contained over $60 million in cryptocurrency funds.
Court documents said that the currency accounts were used in long-term fraud schemes where victims would be enticed to make investments in fraudulent cryptocurrency ventures. The funds provided by victims were instead laundered to the scammers who had conned them.
Why the unusual name? The victims in these schemes are often referred to as “pigs” by the scammers, who will “fatten up” the victims, according to an affidavit filed in relation to the Los Angeles seizure warrant. Scammers in these schemes will often form relationships with their victims over a long period of time to gain trust, according to federal prosecutors.
One of the accounts involved in the warrant served in Los Angeles involved a professional woman with a cryptocurrency account who was contacted on LinkedIn by a scammer that offered to invest the victim’s money into another fund. The victim later spent over $2 million as a result of the scam.
The FBI identified at least 10 victims from a seizure of a Los Angeles-based account who were unable to withdraw the funds they had invested. The seized account contained money from all 10 victims.
Investment fraud caused the highest losses out of any kind of scam in 2021, according to the FBI, with more than $3 billion stolen. Most victims are between the ages of 30 and 49.
No criminal charges or arrests were announced Monday, but the Justice Department said the FBI’s Phoenix Division continues to investigate the scams.
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