Four individuals have been charged by US authorities for their involvement in a fraudulent cryptocurrency investment scheme that resulted in losses of over $80 million for victims. The individuals facing charges are Lu Zhang, Justin Walker, Joseph Wong, and Hailong Zhu. The scheme, known as “pig butchering” fraud, involves luring unsuspecting victims into an online romance, gaining their trust, and then convincing them to invest in a cryptocurrency platform with the promise of significant profits.
The reality is that the only profits made are by the scammers themselves. Victims are manipulated into sending funds to investment accounts controlled by the fraudsters, only to discover that they are unable to withdraw the funds. Oftentimes, victims borrow money or use their savings to send funds to scammers who they believe to be their friends or romantic partners.
The US Department of Justice has accused Zhang, Walker, Wong, and Zhu of conspiring to launder the proceeds of victims’ cryptocurrency investments through shell companies and bank accounts. At least 284 transactions resulted in over $80 million in victim losses, with more than $20 million deposited into shell company bank accounts.
In light of these scams, the Department of Justice advises caution when engaging in digital romances with individuals suggesting cryptocurrency investments or requesting money transfers for investment purposes. If you believe you have been a victim of a “pig butchering” scam, or know someone who has, the Justice Department suggests reporting it to the FBI’s Internet Crime Complaint Center (IC3) referencing “Pig Butchering PSA.”
The IC3 is interested in information about suspect investment platforms, cryptocurrency addresses, transaction hashes, bank account details, and suspected scammers. They also advise keeping records of communications with scammers and financial transactions.
The FBI has also offered tips for avoiding falling victim to cryptocurrency scams, such as avoiding sharing financial or personal information with unknown individuals and not investing based solely on online interactions. They advise confirming the legitimacy of any investment opportunity or cryptocurrency platform and caution against paying additional fees or taxes to withdraw funds.
Zhang and Walker have pleaded not guilty in court and are facing up to 20 years in prison if convicted. Their trial is scheduled for February 6, 2024 in Los Angeles. Meanwhile, Wong and Zhu are currently being sought by federal authorities.