Pig Butchering
There are victims everywhere
I first heard about pig butchering a few years ago, when I was still at Treasury, leading the Office of Illicit Finance. The phrase alludes to the long con or scam practice of fattening a hog before slaughter—"Sha Zhu Pan” in Chinese. It was not a widespread threat when I was at Treasury, and we were only starting to discover what the scam was about—tricking victims into investing in fraudulent cryptocurrency schemes. But since the COVID-19 pandemic, it exploded into one of the most common and heartbreaking schemes in the world, stealing at least $75 billion from victims worldwide. The FBI’s 2022 IC3 report says that Americans reported losses of nearly $2.5 billion to crypto investment scams.
To quickly recap, the scam begins with the scammer sending a message to the victim (the pig), whether via text, or direct message on social media, or a dating app.
The online persona is a fake, created by the scammer using a false or stolen photo, portraying a glamorous lifestyle and an attractive individual—both male and female.
The initial message may be a wrong number, which the scammer uses to launch a conversation and establish some kind of common bond.
After the bond is established and the conversation progresses, a “friendship” develops online based on common connections or mutual experiences. Some scammers fabricate situations in which they commiserate with the victim, who slowly begins to reveal details about his or her life. A “bond” is established, and a “relationship” flourishes.
After prolonged discussions, in which the victim and the fraudster nourish their newly found kinship, the thieves then gradually pivot the conversation to investing. The scammers already likely know the victim’s financial situation, how much they can likely steal, and what the victim needs to be convinced to “invest”—most likely in cryptocurrencies, about which few really know.
The scammers will make claims about their ostensible “investing profits,” to try to convince the victim to open an account at the same online brokerage. But the brokerages are fakes—albeit sophisticated fakes—and any money the victim deposits into the “brokerage” will eventually be funneled into the pockets of the scammer.
Worse yet, the scammers don’t ask the victim for money. They merely offer to help “guide” the victim in their crypto investing journey. The fake brokerage takes care of the rest, empties the victim’s account, and that’s all she wrote, folks.
The problem has gotten so prevalent, that FinCEN last year issued an alert to help financial institutions and the public writ large recognize the methodologies of pig butchering. The alert describes, behavioral, financial, and technical red flags to help banks and potential victims detect and deter these scams.
John Oliver, in an entertaining half-hour segment in February, delved into the pig butchering phenomenon.
He interviewed victims who lost their savings, as well as their family members’ funds. He aired clips showing sample texts victims have received and news reports which most people probably ignore.
But what he also mentioned is something most people don’t realize. The scammers—those on the other side of that screen—many times are victims of human trafficking and enslavement, forced to work with little to no sleep, no food, and harsh physical punishments issued for failure to bring in sufficient amounts of money.
I used to mess with the scammers incessantly, figuring that if I took up their time and effort, someone else would be spared the heartache. Friends of mine are pros at stringing scammers along and posting the screen shots.
Some have parlayed messing with scammers into a huge Internet game, making them frustrated and even enraged.
I have to say, the games are entertaining, but then reports started emerging about the scammers themselves - victims on the other side of the globe who are forced to find, con, and “butcher” gullible prey worldwide into giving up their savings, losing everything to an online “romance” or just a supposed “friend” with whom they were sharing their life as the pandemic forced more and more people to remain indoors and develop relationships on the Internet.
The New York Times in late December wrote about “Neo” Lu, who supposedly had been hired as a translator by an e-commerce company. He had been looking forward to his lucrative, new position in Bangkok, Thailand, with increased pay and a healthy work-life balance in a vibrant city, but then, something went very wrong. Neo offered the Times a horrifying glimpse into a scam labor camp, and it was anything but entertaining.
Instead of a vibrant city, Neo found he was dumped at what was essentially a labor camp haphazardly built on a patch of jungle and muddy fields.
Within the compound were spartan, low-rise concrete buildings with barred windows and doors. Two men in combat fatigues, carrying rifles, guarded the main entrance. High walls and fences topped with razor wire surrounded the compound, clearly meant to keep not only outsiders at bay, but also those inside from leaving.
He was smuggled into a remote corner of Myanmar, where he was handed over to a Chinese organized crime gang that had paid for him.
The criminal groups try to break their captives with a mix of violence and twisted logic. Those who disobey are beaten. Once they start working, the victims are often led to believe that they have become complicit in the crime and would face jail time if they returned to their countries. The gangs often take away the abductees’ passports and let their visas expire, creating immigration complications.
Authorities in the Philippines last month raided and shut down a “love scam” center, rescuing hundreds of victims who were kidnapped, tortured, and forced to work as scammers.
On 28 February, the Vietnamese man escaped the facility by climbing up a wall, crossing a river, and seeking refuge at a farm. The farm owner then reported it to the police.
There were signs of torture on the man, including scars and marks from electrocution, said Mr Casio (Winston Casio, spokesman for the presidential commission against organised crime), whose team visited the man early this month.
Mr Casio added that several others have tried to escape but were always caught.
Police also seized three shotguns, a 9mm pistol, two .38 calibre revolvers, and 42 rounds of live ammunition from the centre.
CNN in December also detailed the heartwrenching account of a victim who had been smuggled to work in a scam center. Indian national Rakesh worked for 11 months as a scammer stealing thousands of dollars from unsuspecting victims. According to the CNN report, he was educated as a chemical engineer in India, but after six months of unemployment, he was desperate to find work, even if he had to move abroad.
Enter the organized crime ring.
He was trafficked from Thailand to Burma—a compound guarded by armed soldiers—where his identity documents were confiscated and he was informed he would be working as a scammer, stealing money from unsuspecting victims worldwide.
“This you need to do... otherwise I will kill you,” Rakesh recalled a Chinese man telling him.
He refused to sign the contract and was thrown into what he describes as a jail cell, where he was kept with no food or water. Three days later he’d made up his mind -- he’d do whatever it took to survive.
What I’m saying is that there are victims on both sides of the scam, even though we often like to believe that the scammers are evil, money-grubbing savages.
The biggest culprits are organized crime groups. The United Nations Office on Drugs and Crime (UNODC) in a policy report in September that trafficking in persons in southeast Asia in which victims are kidnapped and forced to commit online scams and financial fraud—particularly occurring in Special Economic Zones (SEZs) and other areas of Cambodia, Lao People’s Democratic Republic (PDR), and Myanmar, as well as other destination countries (including Malaysia, and the Philippines)—is on the rise.
Trafficking in persons for forced criminality has been driven by organized crime groups in the region, which operate in a remarkably open way. Their illicit activities are linked to various legal and illegal entertainment establishments, such as casinos, hotels, and registered companies (businesses), which operate from compound-like buildings where victims are harbored and forced to commit, or be complicit in, cyber-enabled crimes. This phenomenon of trafficking for forced criminality has recently become prominent in Southeast Asia, though it had already been identified in many parts of the world. The United Nations Office on Drugs and Crime (UNODC) 2022 Global Report on Trafficking in Persons1 has indicated a considerable increase in the identification of trafficking in persons for the purpose of committing criminal offences, currently reaching 10.2% of all reported trafficking cases globally.
And unfortunately these groups have links to corrupt government officials and other groups in power who enable and facilitate their activities. Myanmar, for example, is home to non-state armed groups that control important border areas and have a history of working with organized crime syndicates, according to the UNODC. Some organized crime syndicates are involved in SEZs in the region as owners, developers, and investors. Corruption is allowing organized crime groups to flourish with relatively few challenges.
I am not writing this article as a “boo hoo, feel sorry for the poor scammers” screed. I’m asking you to:
a) Get educated about these scams so you don’t fall victim to them. Despite increased attention to these online crimes, they are still relatively unknown.
b) Consider that the hundreds of thousands of victims of these scams are not just the people who lose all their assets. The victims are also those who are tricked, trafficked, enslaved, starved, tortured, and sometimes killed if they do not reach the profit targets as instructed. The FBI last year issued an alert, warning US citizens and others who travel to southeast Asia to protect themselves against being kidnapped and enslaved.
Criminal actors target victims, primarily in Asia, in employment fraud schemes by posting false job advertisements on social media and online employment sites. The schemes cover a wide range of opportunities, to include tech support, call center customer service, and beauty salon technicians. Job seekers are offered competitive salaries, lucrative benefits, paid travel expenses as well as room and board. Often throughout the process, the location for the position is shifted from the advertised location. Upon job seekers’ arrival in the foreign country, criminal actors use multiple means to coerce them to commit cryptocurrency investment schemes, such as confiscation of passports and travel documents, threat of violence, and use of violence.
c) Understand that these crimes involve sophisticated organized crime networks who exploit the global financial system to launder and move the proceeds of these scams.
The more you know…
Fascinating — and disturbing. When we think of human trafficking we typically think of the sex trade, or illegal migrants forced to work off the books to pay off the cartels. But this is a whole other level.
Good point. And hijacking has been around since the 1930s. People don't 'think' about it, because it doesn't happen to them. They also do not understand the muslim jihadis nor their willingness to die.