Federal officials accused four individuals—three from Southern California and one from Chicago—of orchestrating a fraudulent scheme that netted over $80 million from victims through a tactic known as “pig butchering,” according to the United States Department of Justice. The alleged scam spanned at least 284 transactions and involved cryptocurrency investment scams and other fraudulent activities.
The Justice Department detailed how these individuals purportedly conspired to set up shell companies and bank accounts to funnel proceeds from cryptocurrency scams and other fraudulent schemes. Investigations revealed that more than $20 million of victim funds landed in accounts linked to the accused.
The scheme involved establishing rapport with victims, often through cold calls on dating apps or social media, under false pretenses. After gaining their trust, the scammers would introduce the idea of cryptocurrency investments, directing victims to fake investment platforms where they’d be persuaded to pour money in. These platforms would deceitfully display profits, enticing victims to invest more, yet they were unable to retrieve their funds, resulting in substantial losses.
The term “pig butchering” draws from a foreign phrase describing this method of grooming targets for exploitation, explained officials.
The accused—Lu Zhang, Justin Walker, Joseph Wong, and Hailong Zhu—face charges including conspiracy to commit money laundering, concealment money laundering, and international money laundering. Zhang and Walker were arrested and appeared in federal court, potentially facing up to 20 years in prison if convicted. Details regarding the arrest of the other two or their legal status remain undisclosed.
Authorities urged potential victims to report the scam via IC3.gov, referencing “Pig Butchering PSA” in their complaint. They requested comprehensive information including platform names, cryptocurrency addresses, transaction details, bank account information, and suspected scammers’ names and contacts.
