Bay Area investor loses $1.2M in crypto scam as fraud cases triple across CA

SAN FRANCISCO (KGO) — A Bay Area man lost $1.2 million in a cryptocurrency scam that’s targeting Silicon Valley investors.

Federal investigators say cases of this fraud, known as “pig butchering,” are growing rapidly across California, specifically targeting Asian Americans.

How it happened

It was a million-dollar mistake.

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“I was shaking. I was collapsing,” said a man we’re calling CY to protect his identity.

It all started last October on WhatsApp.

“Someone approached me. I thought it was my old colleague from my previous job,” CY said. “She gained my trust. I was vulnerable at the time with my dying father.”

The woman called herself “Jessica.”

CY said she began messaging him every day for a month. After learning about his dying father, she offered him an opportunity with cryptocurrency as a way to help with funeral costs. CY didn’t tell his family at the time.

“I have a financial and accounting background, so I was being careful,” CY said. “I started with $5,000, $10,000 just to see how it is.”

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CY sent money from his bank to a legitimate crypto-trading site. The funds eventually went to a platform Jessica sent him to make the trades. While the app she sent him appeared legitimate, CY learned the hard way that it wasn’t.

“It looked so real, so legitimate. I had no reason to doubt it was fake,” he said.

Four days after his father died, CY lost his first $500,000. But, the alleged scammer insisted he could make the money back.

“I still believed it was real,” he said. “She encouraged me to buy more capital to get it back.”

CY said his personal account balance at the time was -$65,000. However, he was able to take out a loan for $200,000 and borrowed another $100,000 from his brother-in-law.

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“On Dec. 3, I lost it all,” he said.

In total, CY lost $1.2 million and liquidated his entire portfolio, which included 30 years’ worth of savings, including his daughter’s education fund.

Meanwhile, the alleged scammer disappeared. CY admitted himself to the hospital.

“It’s just been a nightmare,” he said in tears. “Stay away from cryptocurrency.”

Here’s how pig butchering works

CY is the victim of the scam known as “pig butchering.” It is when a suspect meets a victim on a dating website or social media platform and builds a fake relationship — metaphorically ‘fattening them up like a pig’– with the goal of getting the victim to invest in crypto.

“Once they see how easy it is to invest, they see a rise in their screen account and then they end up investing their entire life savings in a matter of days,” said U.S. Secret Service Special Agent Shawn Bradstreet. “The counterfeit sites used can look legitimate, but the money is going straight to the criminals.”

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Bradstreet said cases of pig butchering scams have tripled across California so far this year, with a majority of the victims in the Bay Area.

Stephanie Sierra: “How much money has been lost here locally?”

Shawn Bradstreet: “I would say locally it’s in the millions of dollars. I would say the average case we get coming into our office is in the hundreds of thousands.”

Stephanie Sierra: “Why do you think the Bay Area has become such a target?”

Shawn Bradstreet: “I think a lot of the criminals are actually based over in Asia and they’re targeting the Asian community.”

Grace Yuen is with the Global Anti-Scam Organization based in Singapore. The non-profit is staffed 24 hours a day to help victims of pig butchering.

“We are seeing an influx of victims from the Bay Area,” said Yuen, adding many of the Bay Area victims also work in the tech industry. “The scam continues to get more advanced, where fake platforms are made, impersonating legitimate crypto-trading sites.”

According to Yuen, many victims are being targeted on LinkedIn and dating apps like Tinder, Bumble, and Hinge.

“Anytime you’re on social media, not just Facebook dating or Instagram, we’ve even seen people scammed from Reddit and Quora, so unfortunately nowhere is really safe,” Yuen said.

Following the money

According to federal investigators, the scam first began in China in 2019 but has now become more prevalent in the U.S.

The FBI reports more than 740 complaints of romance-related scams were filed in the Northern District of California last year. The FBI’s San Francisco Bureau reports that $64 million was lost locally in 2021, almost double the $35 million lost in 2020.

The counties with the most victims reporting losses of romance-related scams include Santa Clara County, San Francisco County and Alameda County.

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“Greed is the foundation that makes it so successful,” Bradstreet said. “It’s greed on the aspects of the suspects because they want more and more money. And it’s greed on the side of the victims because they feel they can double or triple their money in a matter of days or weeks.”

Money that vanishes, just like the scammers. That’s until they come creeping back.

In CY’s case, Jessica contacted him again in February, offering to help get his money back just two months after he lost everything.

CY sent her a link trying to locate her IP address and said he tracked her location to Cambodia.

“She found out the link was fake and basically told me to go to hell,” CY said.

A month later, Jessica unknowingly contacts him again.

“But, she didn’t realize it was the same dude she scammed already,” he said. “It’s just been a nightmare.”

A GoFundMe account has been set up by viewers to help CY.

How to report this crime

If this has happened to you or a loved one, report it directly to the U.S. Secret Service at 415-576-1210. Or you can file a complaint to the FBI at www.IC3.gov.

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