NJ attorney general announces crackdown on ‘pig butchering’ schemes

Fraudulent crypto schemes cost estimated $429M in 2021

Matthew Fazelpoor//February 6, 2023//

NJ attorney general announces crackdown on ‘pig butchering’ schemes

Fraudulent crypto schemes cost estimated $429M in 2021

Matthew Fazelpoor//February 6, 2023//

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New Jersey Attorney General Matthew Platkin

New Jersey Attorney General Matthew Platkin announced Feb. 3 that the Bureau of Securities ordered three websites to stop offering fraudulent cryptocurrency investment schemes, also known as “pig butchering.”

The Attorney General’s office says that “pig butchering” is a common scheme where fraudsters fatten victims up before swindling all of their funds. The scams often begin with perpetrators using social media to lure victims in through either a romantic relationship or friendship before convincing them to invest in phony investments, then falsely claiming the initial investment grew significantly. The fraudsters then ask for more money and demand multiple fees to withdraw the funds, which are never refunded to the victims.

These types of scams are rapidly becoming more popular across the country, causing an estimated $429 million in losses in 2021.

The Bureau found that three entities – Meta Capitals, Cresttrademining Ltd. and Forex Market Trade – engaged in fraud in connection with the offer and sales of securities on their websites.

Officials says the conduct included omitting or misrepresenting that fees or changes would be imposed before investors could withdraw their funds; omitting material facts to potential investors; and posting bogus testimonials from clients.

“These scammers build up a sense of comradery between them and their victim – all to squeeze every cent they possibly can out of these people with promises of huge returns on investments,” said Platkin. “We are working around the clock to protect the victims of these types of scams and to show these scammers our laws still apply in cyber space.”

Cari Fais, acting director of the New Jersey Division of Consumer Affairs

Cari Fais, acting director of the Division of Consumer Affairs, said it is despicable to take advantage of people who are simply looking to invest in their future.

“With these enforcement actions, the Bureau is making it clear that it will pursue scammers who prey on people’s trust,” said Fais.

On the lookout

Officials are also offering some tips on how to avoid “pig butchering” scams including:

  • Never respond to unsolicited messages from unknown contacts
  • Never send funds to or invest based solely on the recommendation of a social media relationship
  • Be wary of investments promising high returns with no-risk or guarantees
  • Watch out for platforms and domain names impersonating legitimate financial institutions
  • Never be rushed into an investment by the threat of a “limited time only” offer
  • Verify the identity of anyone who offers to sell you an investment and research the investment they are offering

“Even the savviest of investors can have a hard time recognizing fraud when it’s being perpetrated by someone for whom they have a romantic interest,” said Amy Kopleton, chief of the Bureau of Securities. “This makes social media sites appealing to scammers as they know it is easier to scam someone who thinks they are in a relationship. To try to prevent New Jersey residents from becoming victims, the Bureau is raising public awareness of these schemes and educating investors on how to avoid scams.”

More information on how to avoid being an investment scam victim can be found on the Bureau’s investor education page.

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