Four men indicted in $80 million ‘pig butchering’ scheme
- Los Angeles federal prosecutors said four indictments and two arrests had been made in an international "pig butchering" scheme.
- So-called pig butchering is an increasingly prevalent scam that preys on isolated individuals to bilk their life savings with promises of friendship and love.
- Victims often take out loans or tap into savings to send funds to scammers they believe are their friends or romantic partners.
Federal prosecutors have disrupted a so-called pig-butchering scheme that cost victims more than $80 million, the U.S. Department of Justice announced Thursday.
Four men have been indicted and two arrests have been made in one of the most sweeping enforcement actions yet on a type of scam that costs U.S. citizens hundreds of millions every year.
Lu Zhang, Justin Walker and Joseph Wong, all California residents, allegedly conspired with Illinois resident Hailong Zhu to launder the illicit proceeds of their scam, according to prosecutors. Zhang and Walker were arrested and appeared in Los Angeles federal court Wednesday.
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Pig butchering, from the Chinese phrase sha zhu pan, is an increasingly widespread scam that involves cold-messaging victims and attempting to build a rapport with them. After developing a bond, scammers convince victims to send significant sums of money to fake investment platforms, supposedly to teach the victims how to make massive profits trading crypto or other assets.
The exchanges are fraudulent, and the gains are falsified. Eventually, the scammers pick up shop and flee, sometimes with millions of dollars in profits.
The defendants allegedly used shell companies registered in California to funnel their profits to domestic and international bank accounts, according to the complaint. The conspirators set up accounts at numerous banks, including Bank of America and JPMorgan Chase, and had victims send transfers to those accounts, prosecutors alleged.
From there, the money would move to domestic accounts in their own names, to international accounts in Hong Kong or a Bahamas bank linked to money laundering and a well-known U.S. dollar stablecoin, Tether.
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