Bella Yu is a Senior Analyst II at AML RightSource. We encourage our team members
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Have you noticed that lately, many people have been receiving messages from strangers via text messages or on social media platforms that pretend to have messaged you by mistake? You’re likely facing a scam called “pig butchering.”
Unlike ordinary telecommunications scams, pig butchering scams are more sophisticated, deceptive, and challenging to detect. Scammers would use long-term strategies, create convincing personas, and interact with victims to cultivate feelings and establish a romantic relationship with them. After gaining their trust, scammers will direct them to fake investment or gambling websites, where they will swiftly drain their money and disappear.
Organizational structure of the criminal network
The pig butchering scam operation can be divided into four labor groups: the supply group, the communication group, the technical group, and the money laundering group.
The supply group: they need to find a wealth of personal data. They can use publicly available data, web scrapers, and data extraction software to extract personal information from web pages or purchase personal data through illegal channels. This personal information will be used to identify suitable targets and provide them to the communication group.
The communication group: they communicate with the victims through text messages or social media, using various techniques to establish trust and then entice them to fake investment or gambling websites.
The technical group: they oversee renting servers, building different investment, or gambling platforms for one-on-one use by the victims, modifying the back-end odds according to the communication group’s request to hook the victims, sending advertisements to the victims to lure them into borrowing high-interest loans when they run out of money.
The money laundering group: collects identification cards from underground channels and applies for fake bank cards. Then, they use them to receive deposits from the victims and transfer the funds overseas through counterfeit accounts, erasing all traces.
Recruitment through human trafficking
The compound (or group of buildings), where the scam operations are located physically, is huge and thus needs a lot of staff to run the entire operation. High walls and barbed wire fences surround it, with restaurants, clinics, barber shops, and other service facilities. To recruit people, criminals post fake job advertisements on social media or employment websites with competitive salaries and bonuses, expense reimbursement benefits, etc., to attract those looking for jobs or opportunities to make quick money. During the pandemic, lots of people lost their income and became desperate. Millions of people were forced to stay at home, making them ready targets for the fraudsters, which is why the fraud industry has boomed and expanded as this phenomenon happened. Once these victims arrive, the criminals will confiscate their passports or other identity documents and cellphones, hold them captive, force them to work long hours, and beat and sexually assault them. Therefore, pig butchering scam is also a crime of human trafficking.
How do criminals train their staff?
The criminals will train the recruits from around a week to a month, depending on the role assigned. The training modules start with creating a fake identity that needs to be attractive and realistic. To make it realistic, the staff needs to pay attention to the details, from a simple name choice to learning about their target victims’ cultural and geographical environment. After creating an identity, the next step is to create a solid connection or emotional bond and establish trust with the target. This means they need to understand the psychological activities in the other person’s mind. The criminals will teach them the characteristics of different kinds of people and their strengths and weaknesses - so that they can adapt or customize their interaction or approach and tailor their scam, accordingly, making it personalized. Once their trust is established, the last step slowly diverts the conversation to investment. They need to be subtle and patient about it. The criminals will also provide them with examples to demonstrate how to get there. Their training is very professional to ensure that their behavior and logic are carefully crafted and that they can manipulate and exploit their targets.
Each criminal establishment compound has various scripts available to their staff while running the pig butchering scam. These scripts serve as very detailed guides that tell the staff how to respond to different situations and questions from their targets. These scripts are written by experts, doctors, and professors in psychology, as they are crucial to their success. Compared with traditional scams, pig butchering scams have evolved a lot, combining social engineering6, internet technology, psychology, sociology, etc., into a complex new discipline.
Initially, there may be obstacles such as appearance, language, or accent barriers to achieve some scams that could not be achieved. Now, these may no longer be obstacles. With the recent launches of artificial intelligence platforms such as ChatGPT, the continuous updating of functions and features, as well as the continuous maturity of artificial intelligence technology, the means of fraud will also be constantly updated, modified, and targeted to become more concealed, more skillful, more personalized, and more professional. Professionalization is expected to be a prominent feature because if human greed does not change, scamming will not disappear, and it can be foreseen that it will be more difficult to prevent such fraud in the future. This is not a pessimistic outlook but rather a more realistic one.
What is it like working within the compound?
It’s no exaggeration to say that the compound is a “living hell,” as once the victims get in, it’s almost impossible to get out again. They are forced to work long hours, live in poor conditions, and are still unable to make any money, as criminals will come up with various excuses to deduct their salaries. In addition, the money they earn can only be spent inside the compound where everything is pricier than outside to deplete their earnings.
If the staff does not perform well, they will be punished, beaten, tortured, or made to witness violence against others. And if their performance does not meet expectations for consecutive months, they will be sold to another compound, and this vicious circle continues. Even if they meet the target, they still can’t avoid being beaten. There is reportedly inadequate access to medical treatment, with disturbing cases of victims who have died because of mistreatment and lack of medical care.
For many “criminals,” stealing money from you is a matter of life and death, which can help explain the level of scam and patience of them are insane. After the training, they are forced to work on scamming others. They chat with their targets for months or even more than a year every day, working like cutting-edge companies to gain their trust and build emotional connections with them.
When the relationship becomes stable, they gradually persuade their targets to invest in cryptocurrency or try gambling and direct them to fake investments or gambling websites that the scammers control. The victims are encouraged to try it, starting with a small amount. To convince them that this process is legitimate and hook them, the criminals will let them win or withdraw small money. Though they control it, they pretend that they have insider information and share it with the victims so that they trust them even more.
After the victims have tasted the ease of winning, fraudsters encourage them to invest or bet more money. However, every penny sent to the fake investment websites will be immediately transferred out at the back; the digits shown on the website are just numbers. When they urgently need to withdraw a large sum of money, it will ask the victims to pay one fee after another.
On the other hand, once they place all their assets on the bet, believing their insider information will be accurate as always, they will lose it all. The gambling software is usually infected with Trojans and malware that track and monitor all information of the victim’ spending habits and bank text messages. The fraudsters will use this data to carry out precise fraud by alternating wins and losses to control the victim’s emotions. When the victims run out of money but are still immersed in it, the fraudsters will send them high-interest loan advertisements, pushing the victims into deeper debt. These high-interest loans are also one of the sources of income for the fraudsters.
When they start to question and interrogate, or there is no money left to squeeze, or their dreams of getting rich through winning bigger bets shattered, the fraudsters suddenly vanish, taking all the money with them, resulting in enormous losses for the victims. Many of these victims are highly educated, but fraudsters are so good at manipulation that it is still possible to fall for and get trapped regardless of age or educational background.
There is no way to get out of it for the “criminals”
Because the “criminals” are forcibly engaged in illegal activities, some people cannot tolerate the inner torment and try to escape. However, under the close surveillance of criminal gangs, it is almost impossible. The compound’s security measures are stringent; the staff cannot enter or leave without an ID card. If they are caught back, they will be beaten harder or even killed. If they manage to escape the compound, returning to their homeland is difficult. They cannot ask for help from locals as every escapee has a price tag; the locals will sell them back to a compound again. They cannot report to the local police because the police are corrupt and in cahoots with the criminal gang. They cannot visit the local embassy to seek help, as the criminals guard it. Furthermore, even if they manage to return to their home country, they will be sentenced to jail for participation in fraud operations though they were forced.
The earliest reported cases of such operational compounds were in Southeast Asia; however, due to the high profits from pig butchering scams, they are now in existence worldwide and thriving on social media platforms.
Considering these operations’ scale, it will be a long journey before these complex fraud schemes are uncovered and eventually prosecuted and shut down. Therefore, it’s essential to take measures to raise awareness of anti-fraud to prevent this from happening in the first place.