House Aims to Raise Awareness on Schemes Bilking Americans out of Millions
They may not be a household name, but millions of Americans are unfortunately falling victim to confidence scams, otherwise known as pig butchering (a reference to fattening a pig before slaughter).
Confidence scams occur when a criminal gains the trust of victims over weeks or months, before taking advantage of the victims, usually asking for money and then disappearing, often taking the payments in untraceable cryptocurrency.
Independent researchers say the scams have siphoned tens of billions to transnational crime syndicates, many of them in southeast Asia.
House Hearing
The scams, many of which have romantic overtones, attracted the attention of Congress. A subcommittee of the House Financial Services Committee recently held a hearing titled “Protecting Americans' Savings: Examining the Economics of the Multi-Billion Dollar Romance Confidence Scam Industry.”
The goal: raise awareness of this under the radar issue.
“It is abundantly clear that more education is needed. This is a scam that has largely flown under the radar because, often, the victims are embarrassed to come forward to say that they were tricked. It is incumbent upon Congress to sound the alarm and warn our constituents,” said Representative Blaine Luetkemeyer (R-MO), Chairman of the Subcommittee on National Security, Illicit Finance, and International Financial Institutions.
In the hearing, the subcommittee heard from the Financial Crimes Enforcement Network (FinCEN), the U.S. Secret Service, the Department of the Treasury Office of Terrorist Finance & Financial Crimes, and the Santa Clara County California Deputy District Attorney. The witnesses discussed the scope of the problem and talked about solutions for law enforcement.
Treasury Deputy Assistant Secretary for Strategic Policy Scott Rembrandt called it a “critical subject with a devastating impact.” Rembrandt highlighted some of the Treasury Department’s work in the area.
Santa Clara County Deputy District Attorney Erin West discussed how her office has become a hub for prosecutions against such schemes. West and her team have recovered $3 million from American victims of pig butchering schemes, a small fraction of what’s been lost. But she warns that more needs to be done and that includes going after criminals at the source.
“It really will require taking down these compounds,” said West to the Wall Street Journal. “At some point, people have to start going to jail for this.”
Secret Service Cyber Policy & Strategy Director Matthew Noyes Cyber said a whole of nation response is required, noting that transnational fraud schemes have four components: the individuals conducting the fraud, the channels they use to communicate with potential victims, the fraud victims themselves, and the financial mechanisms used to obtain and launder the proceeds of these schemes.
Director Noyes the need for increase collaboration, legislation to help U.S. law enforcement address illicit use of digital assets, and improvement of identity and authentication practices.
Dara Daniels, Associate Director, Research and Analysis Division at FinCEN, noted that her agency is providing leads to partners, providing training to various law enforcement agencies, and is using a “variety of authorities and programs that we leverage to combat fraud, cybercrime, and virtual asset investment scams.”
Also discussed was a flurry of proposed legislation that aims to take on such scams. Those bills, including the Empowering Law Enforcement to Fight Financial Crime Act (H.R. 9480), are still held up in committee.