Lucrative 'Pig Butchering' Scams Cutting Into CT: State Police

MIDDLETOWN, CT — A warning has been issued by state police regarding "investment/romance" scams known as "Pig Butchering."

The warning was issued Tuesday.

State police said the scams are generated by "transnational criminal organizations targeting Americans in complex investment scams" and said older Connecticut residents are at an increased risk.

According to the FBI's Internet Crimes Complaint Center, also known as IC3, cryptocurrency investment fraud grew more than 53 percent in 2023 to approximately $4.5 billion. But it may be far worse, as a recent study suggests that the total since 2021 may actually be $75 billion.

In pig butchering investment scams, also known as sha zhu pan in Chinese, the fraudsters initially contact the victim through dating apps, social media, or professional networking platforms. They build trust with the victim over several weeks or months, often feigning romantic interest or establishing a friendly rapport.

Once the victims are emotionally invested, the scammers claim to have insider knowledge of a lucrative investment opportunity such as cryptocurrency, foreign exchange trading, or a new venture, and persuade the victims to invest, state police said.

The scammers may direct the victims to a fraudulent trading platform or app, which appears to show impressive returns on their investments. Encouraged by these fake profits, the victims are lured into investing more money.

However, when the victims attempt to withdraw their funds, they discover that the platform is a sham and their money is lost, state police said.

The term "pig butchering" refers to the scammers' practice of "fattening up" the victims with promises of wealth before "slaughtering" them by stealing their money.

"It is crucial for the public to be aware of these scams, to be cautious of unsolicited investment advice from online acquaintances, and to thoroughly research any investment opportunity before committing funds," state police said. "Law enforcement notes that many scammers are themselves victims of human trafficking, forced to endure appalling working and living conditions. This fact does not justify their actions, but serves as a significant reminder of the pervasiveness and reach of these transnational organized crime syndicates."

State police said that, in 2023, the Cryptocurrency Working Group of the Connecticut State Police succeeded in recovering nearly $4 million in assets for Connecticut victims.

"The State Police continue to collaborate with local, state, and federal partners, as well as stakeholders from industry, to investigate scams," officials said.

To prevent pig butchering investment scams, several common warning signs should raise red flags for residents, state police said:

1. Unsolicited contact: Be wary of strangers who reach out unexpectedly through dating
apps, social media, or professional networking platforms, especially if they quickly try to
move the conversation to Whats App for investing.
2. Too-good-to-be-true returns: If someone promises guaranteed high returns with little to
no risk, it is likely a scam. Legitimate investments always carry some level of risk.
3. Pressure to invest quickly: Scammers often create a sense of urgency, claiming that an
opportunity is time-sensitive or scarce. Be cautious of anyone who pressures you to make
swift investment decisions.
4. Unregistered investments: Before investing, check if the company or individual is
registered with regulatory bodies such as the CT Department of Banking, Securities and
Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).
Unregistered entities are a red flag.
5. Lack of transparency: If the person is evasive about their background, the investment
details, or the company they represent, this is a warning sign. Legitimate professionals
should be transparent and willing to provide verifiable information.
6. Requests for personal information: Be cautious if someone asks for sensitive personal
information, such as your Social Security number, bank account details, or copies of your
ID, especially early in the relationship.
7. Unusual payment methods: If the person insists on using unconventional payment
methods – such as wire transfers, gift cards, or cryptocurrency – this may be a scam.

"To prevent falling victim to scams, individuals should thoroughly research any investment opportunity, consult with a trusted financial adviser, and never invest more than they can afford to lose. Remember, if an opportunity seems too good to be true, it probably is," state police said.

State police said that Older adults, particularly those who have accumulated significant savings or have access to retirement funds, should be extra vigilant when it comes to potential investment opportunities "presented by new acquaintances."

"Scammers often target older individuals, perceiving them as having more disposable income and potentially being less familiar with online investment platforms or current scam tactics," state police said.

A 2021 study by AARP found over 56 percent of the scam victims were older than 50 with a median loss of $3,000.

State police also are warn victims to avoid or carefully scrutinize the use of third-party cryptocurrency tracing services who require hefty down payments or a percentage of "recovered" assets.

"The companies claim to have the ability to recover stolen cryptocurrency, when, in fact, they have no legal jurisdiction or authority to freeze or seize assets, only law enforcement does through the judicial process," state police said.

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Connecticut residents are being encouraged to report any suspected incidents of fraud to their local police or state police barracks. State police have also established an email specific to
cryptocurrency related crimes: CSP.virtualcurrency@ct.gov. We also recommend that a report
be filed at FBI’s www.IC3.gov.