Readers may recall a couple of posts earlier this year about me receiving cryptic text messages on WhatsApp from people who seemed to have reached me by mistake and whose profiles were those of attractive young Asian women. I did not respond because it looked like a scam and with a little investigation discovered that indeed it was.
The investigative journalism outfit ProPublica has published an article that reveals that this is part of a huge operation known to the authorities with the somewhat unsavory name of the ‘pig butchering’ scam. The article describes how it works and how to recognize it so as to avoid falling into the trap.
If you’re like most people, you’ve received a text or chat message in recent months from a stranger with an attractive profile photograph. It might open with a simple “Hi” or what seems like good-natured confusion about why your phone number seems to be in the person’s address book. But these messages are often far from accidental: They’re the first step in a process intended to steer you from a friendly chat to an online investment to, ultimately, watching your money disappear into the account of a fraudster.
“Pig butchering,” as the technique is known — the phrase alludes to the practice of fattening a hog before slaughter — originated in China, then went global during the pandemic.
This operation follows a standard script.
- Create a fake identity
- Initiate contact
- Win the trust of the target
- Sign them up [to invest]
- Get them to put real money into the fake account
- “Prove” that it’s legitimate
- Manipulate them into investing more
- Cut them off
- Use their desperation to your advantage
- Taunt and depart
The article describes the huge sums of money that people have lost, such that their lives and those of their families have been destroyed.
But there is an even darker side to this, if you can imagine it. The scammers whom the victims are communicating with are, as ProPublica describes in another article, themselves victims. They have been tricked into applying for jobs and then trafficked into Cambodia, Laos, and Myanmar where they are forced to engage in this scam. They are bought and sold from one scam operation to another and kept round the clock within enclosed and guarded premises with little chance of escaping. So we have two crimes combined: human trafficking and scamming.
The article described the case of one man named Fan and his brother who fell into this mess.
The ads on the Telegram messaging service’s White Shark Channel this summer had the matter-of-fact tone and clipped phrasing you might find on a Craigslist posting. But this Chinese-language forum, which had some 5,700 users, wasn’t selling used Pelotons or cleaning services. It was selling human beings — in particular, human beings in Sihanoukville, Cambodia, and other cities in southeast Asia.
“Selling a Chinese man in Sihanoukville just smuggled from China. 22 years old with ID card, typing very slow,” one ad read, listing $10,000 as the price. Another began: “Cambodia, Sihanoukville, six Bangladeshis, can type and speak English.” Like handbills in the days of American slavery, the channel also included offers of bounties for people who had run away.
Fan’s descent into forced labor began, as human trafficking often does, with what seemed like a bona fide opportunity. He had been a prep cook at his sister’s restaurant in China’s Fujian province until it closed, then he delivered meals for an app-based service. In March 2021, Fan was offered a marketing position with what purported to be a well-known food delivery company in Cambodia. The proposed salary, $1,000 a month, was enticing by local standards, and the company offered to fly him in. Fan was so excited that he told his older brother, who already worked in Cambodia, about the opportunity. Fan’s brother quit his job and joined him. By the time they realized the offer was a sham, it was too late. Their new bosses wouldn’t let them leave the compound where they had been put to work.
Unlike the countless people trafficked before them who were forced to perform sex work or labor for commercial shrimping operations, the two brothers ended up in a new occupation for trafficking victims: playing roles in financial scams that have swindled people across the globe, including in the United States.
Tens of thousands of people from China, Taiwan, Thailand, Vietnam and elsewhere in the region have been similarly tricked. Phony job ads lure them into working in Cambodia, Laos and Myanmar, where Chinese criminal syndicates have set up cyberfraud operations, according to interviews with human rights advocates, law enforcement personnel, rescuers and a dozen victims of this new form of human trafficking. The victims are then coerced into defrauding people all around the world. If they resist, they face beatings, food deprivation or electric shocks. Some jump from balconies to escape. Others accept their lot and become paid participants in cybercrime.
The scams are aided by the fact that the people who are targeted are often fairly well-to-do (the scammers are looking for people with money after all) and they are embarrassed to report the crime to authorities and have everyone they know think that they are dupes.
Out of fear or shame, most pig butchering victims do not report their losses. That’s one reason that the limited data available likely understates the scale of the damage. According to the Global Anti-Scam Organization, a nonprofit founded last year to combat the new form of fraud, at least 1,838 people in 46 countries have lost an average of about $169,000 each to pig butchering since June 2021. Many still seem stunned by the effectiveness of the trickery. “I have to say, it’s brilliant,” said a Silicon Valley CEO who tallied her loss at $800,000 and asked not to be named out of embarrassment. For many victims, the betrayal by a seeming friend only compounds the devastation.
Step one in the fraud process for Fan and others was to create an attractive online persona. In his case, he was expected to pose as a woman when wooing targets online. His operation bought photos and videos from websites that cater to such operations. For example, bundles of hundreds of photos of good-looking women and men are available for less than the cost of a cup of coffee from a shop called YouTaoTu.
The resulting profiles can seem so real that one Canadian man met his future scammer after Facebook’s algorithm suggested the person to him as a friend. The chance encounter cost him and his friends nearly $400,000, according to a police report he later filed. Other victims told ProPublica they met their scammers on LinkedIn, OkCupid, Tinder, Instagram or WhatsApp.
Because he was a rookie, Fan’s job was mostly limited to enticing marks to download an app called MetaTrader that would provide access to a brokerage where, he told his new “friends,” they could make fortunes trading cryptocurrencies. Fan would try to convince them to buy cryptocurrencies such as ethereum or bitcoin and deposit them in a brokerage controlled by the scam operation. The brokerage would then post phony numbers, including ones that represented supposed gains in their accounts.
If customers complied and began depositing significant sums, Fan said, he would typically hand the phone to his boss, who would take over and begin prospecting for a major strike.
What surprises me is that people who have acquired so much money are usually not dopes when it comes to their finances. Unless they inherited it or won a lottery, presumably they have been savvy and hardworking and thrifty all their lives. So what makes them willing to invest so much money in something they know so little about on the advice of a ‘friend’ whom they never met and who approached them online? As stated above, one person who lost $800,000 was a Silicon Valley CEO.
The article goes on to describe in detail one case of a man named Yuen who lost one million dollars of his family’s money. He was, by his own admission, a cautious and conservative person and yet he fell for this. While the email exchanges this man had with the scammer were mildly flirtatious, the promise of sex did not seem to be the driving force in getting people to cough up money, being more of an incidental attraction, a lubricant to help the text exchanges along. The promise of getting large and quick returns on their investments seem to be main factor. The fact that the vehicles for investments were things like cryptocurrency or gold probably helped enable the scam because most people have no idea about what those investments involve. We are regularly regaled with stories of people who have made a lot of money in these mysterious ways and not so many stories of people who have lost their shirts, and some people are lured by the FOMO effect (fear of missing out) into wanting to get into the action.
Articles like these make for depressing reading but need to be shared widely in order to increase awareness that there are a lot of unscrupulous people out there who are targeting you for your money. If it looks too good to be true, it almost always is.
It’s really only the initial contact approach and the use of forced labour that distinguishes this from most “legitimate” crypto “investments”…
I wouldn’t be so certain of that. The people who I know who have become relatively well off, i.e. in the range of $1 to $5 million in net worth, didn’t do so because they were intelligent investors. They either got into a high-paying job (think doctors or lawyers), or worked hard at growing a business and then sold it for a lot of money, or were lucky in some start-up where they got stock options which they sold. Most of them know just enough about investing to know what ROI means and to ask about it. I don’t know any more myself, but I know my areas of ignorance. (At least some of them, other commenters may disagree with my assessment of my expertise 😉 .)
I can see any of these people taking investment advice from “friends”.
Leo Buzalsky says
Found this from your Oct 4 posting and felt like leaving this comment: It actually surprises me you’d say this. I figured you to be one who would assume many of these people essentially inherited it. I am speaking, too, of connections to get higher paying jobs. Surely you know, for example, of the problem of legacy admissions into universities. So often (too often) it is who you know, not what you know.
I would also note people might be hard working at some things, yet lazy at others. I am an engineer and so I have colleagues that are not only generally smart, but good at math (which should come in handy for dealing with finances). Yet…I have known many that are also quite lazy thinkers outside of their job. You might say they have a particular set of skills…but don’t expect much from them outside of those skills.