Cell phone users across the U.S. have been receiving a growing number of mysterious text messages from unknown numbers for months. The content of the messages can range from “Hey, what are you doing Monday?”, “I have something to tell you”, “I’m bored” or even just “Hello”. Some people might have been trained to recognize these messages as a sign of a con, similar to phone calls or emails from the IRS or people claiming to be overseas prison heirs. Nevertheless, the messages keep coming.
This is because, according to authorities, people are still falling victim to the scam, dubbed “pig butchering”. It involves elements of romance and investment fraud and can be extremely profitable for the perpetrators. Documents released by the U.S. Attorney’s Office in San Francisco this week describe how the scam works.
The case involves a 68-year-old man from Santa Clara (“RB”) who had gone through financial struggles after a recent divorce. In February, he received a text message from an unknown number. When he responded, the sender said their name was “Janey Lee” and they were a Houston clothing designer who had the wrong number.
The two soon started talking about their personal lives, businesses, and finances. Janey Lee then shifted the conversation to her success in trading cryptocurrency and convinced RB to invest. By April, he had sent $260,000 to a crypto exchange called “XTRA”. His account showed a balance of $487,000, a gain of 80%. When RB tried to withdraw $100,000, he was told that he would need to send 20% of his account balance to verify his account by May 2, 2023.
This was when RB realized he had been scammed and contacted the FBI. However, it was too late. Documents filed this week by the U.S. Attorney’s Office seek to recover some of the lost funds, but at least three other victims have reported sending a total of $550,000 to the fake crypto exchange. One of them lost half a million dollars.
Investment fraud is the most costly scam in the U.S., with a reported overall loss of $3.31 billion in 2022. Crypto scams, in particular, have increased by 183% in the same period, with a reported loss of $2.57 billion. The Department of Justice and the IRS have warned people to be aware of the scam and to not fall for it.