US prosecutors have made notable progress in two separate cases involving the notorious “pig butchering” schemes. These fraudulent operations have caused victims loss of millions, but recent victories by the Department of Justice highlight the ongoing efforts to fight such crimes.
$5M Seized
On August 22, the US District Attorney’s Office for the Eastern District of North Carolina announced the successful seizure of nearly $5 million worth of Tether (USDT) linked to a pig butchering ring.
The funds, traced to cryptocurrency addresses allegedly involved in laundering proceeds from these scams, represent a significant victory for law enforcement. US Attorney Michael Easley emphasized the severity of these scams, noting how Americans are losing their life savings to cybercriminals who transfer the stolen funds into overseas crypto accounts.
This fund seizure follows a similar raid by the Department of Justice in May where it arrested two individuals for running a $73 million money laundering scheme that converted funds into Tether’s USDT.
Pig butchering scams are a particularly insidious form of fraud where the scammer builds a fake online relationship with the victim, gaining their trust before luring them into investing in a fraudulent cryptocurrency project. These scammers use the pretense of love to trick their victims into pouring money into non-existent crypto trading platforms.
Another Major Case
This week’s victories didn’t stop there. On August 19, the US Attorney’s Office for the District of Kansas reported the sentencing of Shan Hanes, the former CEO of Heartland Tri-State Bank in Elkhart, Kansas. Hanes was sentenced to over 24 years in prison after pleading guilty to embezzling $47.1 million from the bank.
Hanes, who was himself a victim of a pig butchering scam, funneled money from the bank through 11 wire transfers to crypto wallets between May and July 2023. In a desperate bid to recoup his losses, Hanes looted funds from a local church, an investment club, and even his daughter’s college savings account.
His actions not only led to the bank’s failure but also caused $9 million in investor losses, despite the Federal Deposit Insurance Corporation (FDIC) absorbing the bulk of the financial damage.
In May, major crypto exchanges like Coinbase and Kraken, along with companies like Ripple, Meta, and Match Group, formed an alliance to combat online fraud and scams.
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