Police are warning residents to be vigilant of a highly effective, emotionally draining and financially devastating scam that has recently surfaced in Cayman, ripping off at least a dozen victims of between $5,000 and $1 million each.
It’s called ‘Sha Zhu Pan’ (pronounced shah-joo-pan) – Mandarin for ‘pig butchering’. As the name suggests, the scammers gain the trust of victims, get them to fatten up their coffers by convincing them to hand over money for cypto-investments, and then disappear without a trace and with their cash.
Investigators explain that Chinese-based crime syndicates in southeast Asia are spending countless hours grooming their victims before inflicting financial and emotional damage and then vanishing into the ether.
Not your average scam
If you’ve logged into your email and checked your junk folder in the past decade, chances are you’ve been contacted by a ‘Nigerian prince’ who, without knowing you, trusts you enough to help him secure his family’s large fortune by sending him a couple of thousand dollars to process the money, with a promise of giving you a share.
Or you might have been informed that you’d won the lottery, or a substantial monetary prize from a competition you never signed up to. Again, for a couple of thousand dollars in processing fees, you can collect this massive windfall.
Or perhaps you have seen attempts at online catfishing, where an oil rig worker or a soldier posted overseas tries to build a relationship before asking you for money to help him out.
These scams often contain spelling mistakes and grammatical errors, or have dodgy email addresses, usually making it clearly obvious that they’re not legit.
This is where Sha Zhu Pan differs.
“The people behind this scam in China have actual manuals in Mandarin, teaching scammers how to emotionally and psychologically connect with their victims,” David Templeman of the RCIPS’s Bureau of Financial Investigation told the Cayman Compass.
According to Templeman, the victims are usually between 20 and 60 years old, professionals in full-time jobs or recently retired, who have money to spend and, most importantly, are vulnerable.
“A wide cross-section of victims have been seen globally, including those who you’d least expect – police officers, those familiar with investment products, graduate students, engineers, consultant doctors, and those working in the virtual currency space,” said Templeman. “Unlike the stereotypical scam victim, many of them are highly educated and digitally savvy.”
Selecting the mark and earning their trust
When seeking out their victims, the scammers often join dating sites and apps for high-net-worth individuals, or professional social media platforms.
“When engaging with their victims, the scammers learn their likes and dislikes, write them on a board to keep track of previous conversations, keep a schedule to message them, and often check in on previous problems,” Templeman said.
He added, “In some cases, they will hire, say, a European modelling agency to take pictures and videos of a model doing sporting, business or just everyday activities in line with the information they have learned and, over time, sporadically send those images to the victims.”
Templeman explained that the scammers have thought of almost everything, including a fatal flaw in this digital world.
“When victims ask for video calls, the scammers often claim to be travelling or busy with work, which is often supported by the fake images,” he explained.
How the scam works
Once the victim’s trust is earned, the scammers subtly set their traps.
In many cases, after a couple of months, the scammer typically drops into conversation that he has been making substantial money trading in crypto currency, and will offer an investment opportunity to the victim, saying though those investments are usually only open to very-high-net-worth individuals, an exception can be made in this case.
The set-up behind the trap is quite elaborate, though inexpensive to make.
Scammers register a website domain and create a functioning app and website.
Victims are then requested to send money, usually a minimum of $1,000, via online bank transfer to an investment account which trades in crypto currency.
“Once the money is transferred from the bank, it then registers on the website and the victims have access to enter their trades and see their portfolio as it makes earnings and losses,” said Templeman.
The portfolios are said to often reflect staggering gains, prompting the victim to invest more money. Some take out loans to fund the investment and even convince family and friends to get involved.
“But it is all fake,” Templeman said. “Once the money leaves the bank, it goes straight to the scammer’s digital wallets where it is then transferred to a professional money-laundering service.
“The money is then mixed and muddled with other clean money, sometimes billions of dollars, before making its way back out to southeast Asia in jurisdictions with less-stringent banking standards.”
In April, the US Federal Bureau of Investigations seized US$112 million connected to the ‘pig butchering’ scam, but Templeman explained that is just a drop in the bucket.
“Think of the digital wallets like post boxes, but because they are virtual, you can have as many as there are grains of sand on the beach,” he said. “The police have very robust and effective software that is able to track the money from one digital wallet to another and, in several instances, we’ve seen where $100,000 is quickly transferred from one wallet with several billion dollars to another wallet with several billion dollars.”
After the butchering
By the time victims realise that they have been scammed, the money is almost always already gone.
“We have been able to retrieve some money but the percentage on returns is disastrous,” Templeman said.
“People are losing their entire life savings, but there is also a human element to this,” he said. “I’ve seen where people give up and lose what little trust they had left in humanity.”
Another disturbing element of the scam is that, oftentimes, victims find themselves at risk of identity theft, as the scammers usually require them to submit ‘Know Your Client’ (KYC) documents, such as a passport or birth certificate.
In some cases, the victims find themselves losing even more money, this time to well intentioned fund-recovery experts, warned Templeman.
“I am warning victims, if you have lost money, come to the police. We are the only ones with the software and jurisdiction capable of tracking the money all the way through, if they act quickly,” he said.
The RCIPS says they have received 12 reports from Cayman Islands residents who’ve been scammed, with dollar amounts ranging from $5,000 to more than $1 million.
Police have also received more than 100 international reports involving people who have tracked their money that has been mixed with clean money, which registered as it was transferred through Cayman’s jurisdiction.
Closing down the syndicate
Over the past several years, authorities have steadily been gathering information about the ‘pig butchering’ scam.
Despite the wealth of knowledge, efforts to shut down the illegal enterprise have proven futile.
“When we flag one website and get it taken down, it quickly reappears as another website, sometimes with minor changes, because it is very cheap and easy to build them,” Templeman said.
“In all my 20 years of doing this job, I’ve managed to return some of the money, but never been able to successfully track down the scammers until recently,” he said. “We were able to track a Nigerian national to the Abuja Airport, where we alerted police and he was intercepted and arrested.”
But Templeman says that individual was a small player in the larger crime syndicate, that the cost to the public purse would not justify extraditing him to Cayman, so they have left him to Nigerian authorities.
“For now, my biggest concern is that anyone who has been scammed or thinks they are being scammed, please come to police immediately,” he said. “Most of our cases was the result of a referral, but if the victims come to us directly, that helps to give us more time to try and track the funds.”
Red flags to look out for
- You receive ‘wrong number’ texts or WhatsApp messages from people you have never met.
- Someone you meet online suddenly starts talking about crypto currency.
- A match on a dating site quickly starts ‘love bombing’.
- Scammers use emotional manipulation to build your trust.
- A friend wants you to invest in a crypto exchange with ‘guaranteed’ returns.
- You’re told to download a ‘special’ crypto trading or investment app.
- Investment sites offer tiers with minimum investment amounts.
- Your new contact offers to ‘trade’ with you to show you how it works.
- You get a quick, small return on your initial investment.
- You’re told you need to pay a ‘tax’ or ‘fees’ in order to withdraw your profits from a platform.
Advice if you think you are being defrauded
- Do not pay any more money – this will not help.
- Report to the RCIPS as early as possible – time really of the essence in relation to asset tracing.
- If you provided payment information to the fraudsters, take the steps necessary to block access to your accounts and protect against identity theft.
- Update log-ins and passwords.
- Run malware detection on your devices.
- Collect together all information, including any correspondence, telephone numbers, email addresses and virtual currency transaction information.
- Consider reporting to the FBI’s IC3 programme by clicking here.
- Reporting here will not help to progress your case directly, but will help law enforcement globally in the understanding of these sorts of frauds.
- Although it is difficult, don’t blame yourself – the criminals run a persuasive and sophisticated fraud. It’s not your fault.
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