Feds target Chinese couple accused in $9 million crypto 'pig butchering" scam

USA Today

4 days ago

Federal officials are trying to seize more than $6 million in cryptocurrency they say represents the ill-gotten gains of a Chinese couple's "pig butchering" scam left behind when they fled the United States one step ahead of the cops.
Prosecutors say the $6 million sitting in four electronic wallets was left behind by Feng Chen and Tianqiong Xu as they fled to China last year, days after the FBI searched their home. They were indicted in June 2024 by a federal grand jury in Vermont.
Court records filed May 22 indicate the married couple specifically targeted people of Chinese heritage across the United States. Prosecutors accuse the couple of ripping off at least $9.5 million from from least 120 victims, operating from their five-bedroom house in Frisco, Texas.
According to court documents, Chen and Xu tricked people into thinking they were investing in cryptocurrency when instead the couple faked apps, emails and online records, and deposited the money in their own crypto wallets. The victims got regular reports purporting to show their investments were gaining in value, investigators said.
"Pig butchering" is the name given to scams in which crooks build a relationship with their targets over time, and then steal their money. In some cases, as with other frauds like Ponzi schemes, scammers work within a specific community, like a church group or neighborhood. Federal officials said Chen and Xu found their targets in Chinese-language investing chat rooms.
"Beginning at least as early as January 2021 and continuing through January 2024 (they) created a scheme to defraud victims of funds by encouraging the victims to invest in cryptocurrency using fraudulent cryptocurrency investment applications," prosecutors wrote in a criminal complaint. "The scheme impacted over 100 victims across the United States and internationally ... and resulted in the theft of millions of dollars from victims."
One victim based in Vermont liquidated their retirement account and transferred $600,000 to the couple, according to court filings. Cryptocurrencies like Bitcoin or Etherium are largely unregulated, and are increasingly associated connected with scams. Last year, the FBI reported that Americans lost more than $5.6 billion in frauds connected to cryptocurrency, in part because it's so easy to buy and transfer it electronically outside the normal banking system.
Court records show FBI agents searched the couple's home in late 2023 but didn't arrest them at that time. Days later the family got passports from the Chinese embassy in Houston and fled home to China with their two children, court records show. The FBI and Secret Service had been tracing their scam network since 2021, according to court records.
The FBI said Chen is originally from Wuhan, and that he attended universities in Wyoming and Louisiana, where he earned master's degrees in petroleum engineering and geology. FBI agents said Chen used the same computer skills he developed in school to create fake apps and chatbots to trick their victims.
The twp were indicted in absentia by a federal grand jury in Vermont, and will be prosecuted for wire fraud and money laundering if they return to the United States.