An illustration photo taken in London on May 8, 2022 shows a gold-plated souvenir cryptocurrency Tether coin (USDT) laid out next to a screen displaying a trading graph.
AFP via Getty Images
A local prosecutor says a California victim of a cryptocurrency scam known as pig butcher, who lost more than $1 million last year, should now recoup about 10% of his losses .
Erin West, assistant district attorney for Santa Clara County, Calif., told Forbes on Friday that a portion of more than $318,000 in cryptocurrency previously seized by her office actually belongs to a scam victim that Forbes has identified as Cy. (Forbes previously agreed to identify the 52-year-old Bay Area man by this alias.)
Since this seizure, the Santa Clara District Attorney’s Office has begun the legal process to accurately identify the owner of these funds and procedures to return them to their rightful owners.
“We have funds in our government portfolio that belong to [Cy],” she said Forbes by text message. “$113,000.”
The prosecutor quickly explained by telephone to Forbes that during the process of analyzing and returning the seized crypto to the victims, members of the “REACT Task Force”, an alliance of local, state and federal law enforcement officials in the Bay Area, traced $113,000 to losses previously reported by Cy.
The funds are held in a “stablecoin” cryptocurrency known as USDT, or Tether. REACT task force investigators, like many law enforcement agencies, use blockchain tracing software to determine how and where cryptocurrency slices are moving. But, these techniques sometimes lead to dead ends – funds go beyond the reach of investigators, or they are unable to determine where they ended up.
But in this case, West said, it was “dumb luck” that some of Cy’s losses ended up in the $318,000 his office had already seized.
“It’s 10% of her money, any refund is a win,” West explained further over the phone, adding that “ideally” Cy should have that money in hand in 30 days, and that she plans to officially inform the court supervising the seizure. case next week.
When Forbes reached Cy by phone and told him the news, he was stunned and looked like he was almost in tears.
“I feel numb, because I don’t know how to feel,” he said. “It’s been up and down, I’ve had hopes and it’s going down, but until I actually see the money, I try not to get my hopes up too much, but it’s a good start. “
Hog Slaughtering is a relatively new, long-term financial scam in which “pigs”, or targets, are “slaughtered” by people who convince them to invest ever-larger amounts of money in so-called powered trading platforms. by cryptocurrency. Fake platforms are designed to look real and trick victims into believing that their investments are generating fantastic returns – until their scammer and all the money they believe they invested disappears.
Victims often lose large sums, and the practice is so lucrative that it is escalating and practiced en masse in countries such as Cambodia, Laos and Myanmar. So far, it has been very difficult for US law enforcement to return the money to the victims.
Jan Santiago, deputy director of advocacy group Global Anti-Scam Organization, previously said Forbes that his group estimates that global financial losses amount to billions of dollars.
In recent months, West has been inundated with financial victim reports — most recently she had to tell another Bay Area victim that her funds were completely lost. However, the prosecutor has also begun a process to train and educate his counterparts in other counties and states to galvanize investigations related to the scams.
“I’m so happy for [Cy],” she continued. “I’m so glad we can do this for him.”
“I mean, yeah, I lost over a million and only got $113,000 back. But there’s hope now!
Shawn Bradstreet, Special Agent in Charge of the US Secret Service Field Office in San Francisco, said Forbes as recently as last month that Cy’s losses were “unrecoverable”, but the agency was continuing to investigate.
To date, Cy has only been able to recoup a very small portion of her losses through a GoFundMe page set up by a relative, and nothing from law enforcement.
Shortly after hanging up the phone with ForbesCy texted with more excitement.
“Man! I don’t know what to do with me!” he wrote. “I mean, yeah, I lost over a million and only got $113,000 back. But there’s hope now! There’s definitely more hope than there is. 30 minutes. I don’t know what to do with myself right now. Wow!”
