The United States has started a forfeiture complaint to seize nearly $200,000 worth of USDT held on Binance linked to a $1.1 million pig-butchering scam.
The funds in question are linked to two pig-butchering scams that defrauded an anonymous victim of over $1 million. Documents filed in the District Court of Columbia detail this information.
According to the documents, the USDT in question is suspected to be proceeds from “wire fraud, wire fraud conspiracy, money laundering, and money laundering conspiracy.”
The two scams
The documents describe how an anonymous victim fell prey to two pig-butchering scams, resulting in a loss of approximately $1.1 million between January 2021 and December 2022.
In the first scam, the victim developed a romantic relationship with a scammer, Eva Markus, through Facebook. Markus also had a LinkedIn page.
According to the filing, “Markus was an engineering consultant from Boston, Massachusetts, temporarily working on a mining project in Turkey. Markus and VICTIM developed a romantic relationship, communicating over the phone and via email”
Markus misled the anonymous victim, leading them to believe she was a diamond mine owner, the victim was deceived into thinking the mine had exploded and Markus needed funds to hire an attorney to return to America. This led the victim to transfer over $400,000.
The unidentified individual entered into a second romantic relationship with someone named Lisa Warren on Facebook. Warren identified herself as a crypto investor and persuaded the person to invest $55,000 in Bitcoin (BTC).
Eventually, the victim was convinced to sell their home and invest the proceeds, resulting in a total of approximately $600,000 in crypto being sent. After retrieving only $15,000 and conducting some research, the victim realized they had fallen for a scam and reported the incident to the police.
According to the court filing, “In total, [the victim] sent Warren $587,197 worth of cryptocurrency including transaction and exchange fees.”
The FBI traced some of the fraudulent crypto transactions to a Binance account under the name of Izuchukwu Henry Okolo, who converted the BTC to 196,721 USDT. Binance froze the funds and alerted the FBI, which seized them.
“The Defendant Property is currently in FBI custody and will be transferred to the United States Marshals Service in the District of Columbia,” according to the document.
Romance and pig-butchering scams
On Monday, Americans were advised by the FTC on how to handle the situation if someone they are romantically interested in online is offering them investment advice.
“No one thinks their online love interest is going to scam them, but scammers are good at what they do,” the FTC noted.
Romance scams, often dubbed as pig butchering scams, involve fraudsters befriending victims under the guise of their potential love interest. In the end, the individuals fall victim to deceptive cryptocurrency investments, and the perpetrators vanish without a trace.
Pig butcher scams typically start when bad actors gain the trust of an unsuspecting victim and then ask them to make large investments in lucrative schemes. After the victim transfers the funds, the fraudsters disappear with the money.
Nithin Kamath, the founder of Zerodha, states that, “As the name implies, a pig butchering scam involves fattening the victim before butchering. Scammers gain the trust of users by using fake profiles. They use the pretense of love and friendship to gain the trust of users and then induce them to send money for jobs and high-return investments and steal the money. These scams are global, and their scope is staggering.”
