High-tech 'pig butchering' cryptocurrency scam duping victims out of billions
SAN FRANCISCO -- Authorities are sounding the alarm about a high-tech twist on a common con where victims are duped by perpetrators to invest in phony cryptocurrency accounts.
Online predators are targeting anyone with a phone or laptop, and an interest in investing anywhere from a couple hundred dollars, to a whole lot more.
"With an international crime that is this massive, we have literally never seen anything like this before," said Santa Clara County Deputy District Attorney Erin West.
Bay area residents have become victims of what's being called 'pig butchering' as they're fattened up figuratively by scammers, and then essentially slaughtered financially.
Prosecutors are tackling this with a two pronged approach by educating potential victims and tracking the billions of stolen cryptocurrency.
As Ben Young -- not his real name -- talks about how he lost his family's life savings and the trust of his wife and high school daughter, his fingers search for something to hold.
It started with an online message then texts from someone he thought was a former colleague..
"I was in the middle of taking care of my dying father. The person was showing compassion and sympathy for me," said Young.
The man in his 50s is a Bay Area victim of a "pig butchering" cryptocurrency investment scam.
Young asked for anonymity, fearing he could lose his job in finance.
"It hasn't been easy to face the guilt I'm going through every single day," he said.
The FBI estimates just last year alone, sophisticated scammers overseas duped victims of more than $3.3 billion dollars, with many of the victims too embarrassed to report their losses.
Fraudsters steal identities, befriend people through social media platforms, then eventually convince them to invest in bogus crypto accounts.
"You really need to be wary of people trying to reach out to you," said West.
West and the Reach Task Force are leading the way tackling high-tech organized crime by sharing how they've successfully tracked and clawed back stolen crypto funds with local police, state agencies, the feds, and international law enforcement.
"These scammers move the money too quickly. We don't have enough tracers in law enforcement to get on these cases as soon as we need to," said West.
Young invested a few thousand initially, then deposited what he and his wife had saved for their daughter's college tuition and life savings of $1 million dollars.
"I was blaming myself and I was scared. I lost my self-confidence and sometimes the will to live," said Young.
West began hearing from victims last year, including Young. Desperate pleas for help come in daily.
"It's constant. They're all such different tragic stories," said West.
West's team helped Young recoup about 8% of his life savings, or about $100,000. Law enforcement believes the best way to disrupt and minimize the scam is to raise awareness.
"Education is key here, because they're not changing their tactics. They're doing the same thing over and over again. It works because you haven't heard of it," said West.
That's also why Young is sharing his cautionary tale: so anyone who might not be vigilant about the life-altering and growing scams online.
"At least I can help other victims that are in dire need," said Young.
A coalition of law enforcement officers including West started with about 100 or so investigators initially. It's grown more than ten-fold over the last year, a revealing indicator of the scope and magnitude of this latest online scheme.
Authorities say the best defense is to carefully determine if accepting a friend online or LinkedIn invite is really necessary and beneficial.
They say the majority of these scams are based overseas in countries like Myanmar and Cambodia, but are led by crime syndicates in China.