What Are Pig Butchering Cryptocurrency Scams?
Pig butchering (sha zhu pan) is a sophisticated financial scam that combines social engineering with fake cryptocurrency investments. The scam typically begins when a person contacts someone else through social media, dating apps, or WhatsApp, often starting with a "wrong number" text that develops into a friendly conversation.
The person spends weeks or months building trust and rapport with their targets, which is why the scam has earned the nickname "pig butchering." They metaphorically fatten their victims before exploitation.
Once trust is established, the person introduces the idea of cryptocurrency investments or trading, often directing alleged victims to legitimate-looking but fraudulent websites or apps they control. These platforms show victims their supposed "profits" growing, encouraging them to invest more money.
However, when the involved party tries to withdraw their funds, they find they cannot access their money, or they're told they must pay additional taxes or fees. By this point, the accused disappears with all the victim's investments, often leaving devastating financial and emotional damage.
Based on FBI reports and financial crime data from the Global Anti-Scam Organization (GASO), alleged victims of pig butchering scams have lost millions of dollars, with individual losses sometimes reaching hundreds of thousands. Allegedly, many of these scam operations are run by large criminal enterprises, often involving human trafficking and forced labor to conduct the scams.
Crimes Associated with Pig Butchering
Pig butchering is a type of cryptocurrency scam that can be linked to a range of criminal acts depending on the specific circumstances of the case. These schemes often trigger multiple federal criminal charges due to their complex, multi-layered nature and use of sophisticated technology to facilitate fraud. When federal prosecutors build cases against alleged perpetrators, they typically pursue several charges that reflect the various criminal elements involved in executing these schemes.
Wire fraud charges are common because these scams inherently rely on interstate electronic communications to deceive victims. When scammers use phone calls, texts, emails, or messaging apps to build relationships with victims and persuade them to transfer funds, each communication can constitute a separate count of wire fraud. Under 18 U.S.C. § 1343, wire fraud carries significant penalties.
Money laundering charges frequently accompany pig butchering cases because scammers must move and conceal the fraudulently obtained funds. This often involves converting cryptocurrency through multiple wallets and exchanges, using mixing services, or routing money through various bank accounts. These activities typically violate 18 U.S.C. § 1956 (laundering of monetary instruments) and related statutes.
Conspiracy charges are particularly relevant because pig butchering operations usually involve networks of individuals working together. Some members may handle initial contact with victims, others manage the technical aspects of fake investment platforms, while others coordinate the movement of stolen funds. When prosecutors can demonstrate this coordination, they may bring conspiracy charges under 18 U.S.C. § 371.
Computer fraud and abuse charges stem from the technical infrastructure these schemes require. Creating fraudulent investment platforms, manipulating digital assets, and unauthorized access to financial systems can violate the Computer Fraud and Abuse Act (18 U.S.C. § 1030). This is especially relevant when scammers use malware or other technical means to facilitate their fraud.
The federal prosecution approach reflects the serious nature of these crimes and their impact on victims across state and international boundaries. Law enforcement agencies often collaborate across jurisdictions to investigate these cases, as criminal networks frequently operate globally. The multiple charging approach allows prosecutors to address the full scope of criminal conduct while potentially increasing the likelihood of successful prosecution and asset recovery for victims.
Pig Butchering Case Examples
Below, we offer two real-life cases involving accusations of pig butchering:
In late 2023, federal prosecutors charged four individuals in a significant cryptocurrency money laundering case linked to pig butchering fraud operations. Lu Zhang of Alhambra, Justin Walker of Cypress, Joseph Wong of Rosemead, and Hailong Zhu of Naperville, Illinois, allegedly participated in a sophisticated scheme that laundered proceeds from cryptocurrency investment scams through shell companies and bank accounts.
The case involves over $80 million in total victim losses from a related fraud syndicate, with more than $20 million allegedly flowing through accounts connected to the defendants. According to court documents, the defendants processed at least 284 transactions, moving funds both domestically and internationally to conceal the source of the fraudulently obtained money. Two defendants, Zhang and Walker, were arrested and have pleaded not guilty, while Wong and Zhu remain at large. If convicted of the money laundering charges they face, each defendant could receive up to 20 years in federal prison for each count.
In a more recent case, Fei Liao, a Chinese national from San Gabriel, California, was charged in the Eastern District of Texas for his alleged involvement in laundering millions of dollars through cryptocurrency investment scams and other fraudulent activities, including pig butchering. Taken into federal custody, Liao pleaded not guilty to charges of conspiracy to commit wire fraud and conspiracy to commit money laundering.
However, according to the indictment, Liao and his accomplices established shell companies and bank accounts to launder scam proceeds, transferring funds both domestically and internationally. The fraudulent schemes, referred to as "pig butchering," involve scammers building trust with victims via social media or dating services, convincing them to invest in sham cryptocurrency platforms, and showing fake profits to lure further investments. Victims eventually find themselves unable to retrieve their funds. Again, each charge carries a potential maximum sentence of 20 years in federal prison.
Facing Federal Criminal Charges? Let Us Help with Your Defense
The legal team at Corrigan Welbourn Stokke, APLC has over 100 years of experience. Should you or a loved one be accused of being involved in a pig butchering cryptocurrency scam, our team can help you understand the charges you may face and develop a personalized defense strategy. Our attorneys are all former prosecutors, and we have a depth of knowledge and experience representing clients in federal cases.
Schedule an initial consultation with our firm today. Call (949) 251-0330.
