U.S. Seeks to Seize Over $400k from Bank Accounts Tied to “Pig Butchering” Crypto Fraud

News | June 27, 2024 By:

On Thursday, June 13, 2024, the United States government filed a civil forfeiture complaint in federal court seeking to confiscate hundreds of thousands of dollars lying in three bank accounts implicated in an international cryptocurrency scam.

According to the complaint filed in the United States District Court for the Southern District of New York, the Department of Homeland Security conducted an investigation into a criminal network defrauding victims through fake cryptocurrency investment schemes. The so-called “pig butchering” scam involved criminals building rapport with victims online over long periods of time before pressuring them to invest sizable sums in sham cryptocurrency trading platforms.

The victims were misled to believe they were investing in platforms like EurexCoin, Doocoin, and Coinbase and seeing large returns. In reality, no cryptocurrency transactions were taking place. When victims tried to withdraw funds, excuses were made to prevent repayments. It’s believed over $2 million was stolen from at least four victims through such ruses between 2022-2023.

Funds obtained from victims were laundered through multiple shell bank accounts not linked to legitimate businesses. Three such accounts targeted for forfeiture held balances of $56,243.55, $312,098.86, and $70,416.62 that originated from victims’ wire transfers. One held by Gudi Trading Inc received $100k from a victim in Illinois in October 2022. Another under Zhongyong Trade Inc contained $25k sent by a New York resident in December 2022. A third belonging to YYJ Consulting Corp contained $50k wired by a North Carolinian in September 2022.

Through analysis of transaction histories, officials allege the accounts exhibited behavior inconsistent with regular commercial use. Large rounds of sums from victims would be deposited and most of the balances quickly moved elsewhere, seemingly designed to obscure the funds’ source and control. None reflected expected payrolls, expenses or revenues of bonafide operations.

If forfeited, the monies would support further investigations into the cybercriminal network. The case demonstrates how sophisticated international rings are exploiting individuals’ enthusiasm for emerging technologies like cryptocurrency and blockchain. As more engage in online investing, regulators hope heightened awareness of “pig butchering” and similar ploys may help more avoid falling prey.

Please contact BlockTribune for access to a copy of this filing.