US Seizes $8.2m from Romance Baiting Scammers
The US authorities have recovered millions of dollars stolen by fraudsters promoting fake investment opportunities to emotionally vulnerable victims, according to TRM Labs.
The blockchain analysis company said it is supporting Department of Justice (DOJ) efforts to recoup funds stolen in so-called “romance baiting” scams.
Also known as pig butchering, the fraud often begins on dating sites, where victims are groomed by scammers before eventually being persuaded to invest in a sham scheme, which results in major losses.
At least 30 victims have been identified in the latest such plot, including one Cleveland-area woman who was tricked into draining her entire retirement account of $650,000, TRM Labs said.
Read more on pig butchering: Interpol Calls for an End to “Pig Butchering” Terminology
Her cryptocurrency was subsequently laundered by being routed through various DeFi platforms, cross-chain swaps and unhosted wallets, before ending up in three TRON addresses. These also contain funds from victims of other romance baiting schemes, the blockchain firm claimed.
“The FBI used blockchain intelligence to trace the flow of funds across multiple platforms and networks – from centralized exchanges, to Ethereum and TRON, through DeFi protocols, and into final storage wallets,” it continued.
“Despite complex laundering methods, the investigation revealed common routing patterns and wallet reuse that helped agents piece together the full laundering scheme.”
The US Attorney’s Office for the Northern District of Ohio filed a civil forfeiture complaint regarding the stolen money back on February 27.
“Funds directly traceable to fraud were forfeited under 18 U.S.C. 981(a)(1)(C) (wire fraud) and remaining funds – likely tied to additional unknown victims – were seized under 18 U.S.C. § 981(a)(1)(A) as property involved in money laundering,” TRM Labs explained.
“This allowed the DOJ to seize the full $8.2m, preventing the fraudsters from recovering any portion of it, and preserving the ability to provide restitution to other victims as the investigation expands.”
Romance baiting is often carried out by trafficked individuals imprisoned in large compounds in south-east Asia. It is facilitated by online marketplaces like Huione Guarantee, which has processed more than $49bn in cryptocurrency transactions since 2021, according to Chainalysis.
