$2M “Pig-Butchering” Crypto Scam Victim Sues Fraudsters
On Thursday, June 27, 2024, Gerald Knoll filed a lawsuit in the United States District Court for the Northern District of Illinois against several unnamed defendants for their involvement in a “pig-butchering” cryptocurrency scam that resulted in the theft of over $2 million from Knoll.
According to the verified complaint, the matter stems from a romance scam in which the defendants induced Knoll to withdraw his retirement funds, savings, and incur debt to purchase more than $1.2 million in cryptocurrency. The current value of the stolen assets exceeds $2,001,414.95.
The defendants are accused of engaging in a sophisticated fraudulent scheme known as a “pig-butchering scam,” wherein victims are “fattened” for financial slaughter by being tricked into a romantic relationship with a scammer hiding behind a fraudulent social media profile. The scammers then deceive the victim into handing over cryptocurrency to a website designed to mimic a legitimate cryptocurrency exchange.
Knoll alleges that the defendants took numerous measures to obscure the transaction trail left behind on the Bitcoin and Ethereum blockchains, but that he has been able to trace the stolen assets to accounts at the cryptocurrency exchanges operated by Binance Holdings Ltd. and Foris DAX, Inc. (d/b/a Crypto.com).
The complaint states that Knoll’s case is unusual because the defendants have not ceased all communications with him, as is the usual practice in pig-butchering scams. This has allowed Knoll to determine that he has been scammed and locate his stolen assets, which presents a rare opportunity for recovery.
Knoll’s lawsuit asserts claims under the Racketeer Influenced and Corrupt Organizations (RICO) Act, as well as multiple tortious acts in violation of Illinois statutory and common law. The complaint demands a jury trial and seeks the return of the stolen assets, as well as additional damages.
The case is particularly noteworthy due to the scale of the alleged fraud and the unique circumstances that have allowed Knoll to potentially recover his stolen funds. Pig-butchering scams have become increasingly common, with consumer losses estimated to be as high as $75 billion worldwide.
The lawsuit also highlights the challenges faced by victims of cryptocurrency-related crimes, where the decentralized and pseudonymous nature of blockchain technology can enable sophisticated money laundering schemes.
Please contact BlockTribune for access to a copy of this filing.
