Four men were arrested and charged in Australia following an investigation into a “pig butchering” ring that defrauded unsuspecting crypto investors of more than $100 million worldwide.
These four men are Chinese nationals aged between 19 and 27 and worked in conjunction with a larger organized crime syndicate. According to the Australian Federal Police in its press release last week, this syndicate “employs a sophisticated mix of social engineering techniques, including the use of dating sites, employment sites and messaging platforms to gain the victim’s trust before mentioning investment opportunities.”
This scheme is called ‘pig butchering’ by the FBI, and involves cybercriminals posing as successful cryptocurrency traders to lure victims into making investments by providing fraudulent results in order to encourage more investments.
Victims are directed to both fraudulent and legitimate investment applications that deal in foreign exchange and cryptocurrency in order to help conceal the scam. According to the AFP, these applications have been manipulated with the purpose of displaying a false positive return on investments.
“The syndicate recruits victims to subscribe to a financial investment service, and manipulates the data provided through the legitimate application to encourage further investment, while concealing the fact their money has actually been stolen,” added the AFP.
According to an analysis of victim reports by police, more than $100 million were recorded in losses across the globe due to this crime syndicate, with most victims living in the US.
Investigators at AFP’s Cybercrime Operations Eastern Command found the crime ring was primarily using Chinese national students living in Australia in order to build the infrastructure necessary for their fraud.
In October, investigators executed a search warrant at the residence of two 19-year-old Chinese nationals. Police charged the two with one count each of recklessly dealing with proceeds of crime, contrary to section 193B(3) of the Crimes Act 1900 (NSW).
Two other Chinese nationals, aged 24 and 27, were the alleged Australian ‘controllers’ of the syndicate and arrested by the AFP in November at the Sydney and Melbourne Airports. They were attempting to flee from law enforcement to Hong Kong on one-way tickets.
The duo were both charged with similar counts carrying a maximum penalty of 15 years in prison.