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Pig Butchering Scams

Alert - Impersonation Scams

There has been an increase in impersonation scams where victims receive unsolicited phone calls, text messages, or e-mails purporting to be from the Federal Deposit Insurance Corporation (FDIC) or the FDIC Office of Inspector General (OIG).  FDIC OIG special agents will never ask you to provide money or other personally identifiable information over the phone.  If you are contacted and you suspect fraud, please contact the OIG Hotline.  For additional information go to our Impersonation Scams Alert.  

The FDIC Office of Inspector General has issued new scam alerts to inform banks and consumers about a common type of scam known as ‘pig butchering.’ This scam is named in reference to the practice of fattening a pig before slaughter. It is a type of confidence and investment fraud in which the victim is gradually lured into making increasing monetary contributions, generally in the form of cryptocurrency, to a seemingly sound investment before the scammer disappears with the contributed monies.

Noteworthy Case Example: Former CEO of failed bank sentenced to prison

The American Bankers Association Foundation, along with several agencies and a private regulator recently distributed an infographic to inform consumers about “Pig Butchering” fraud:

Pig Butchering Scams

How this type of Scam Targets Consumers:

  • The perpetrators might contact you randomly by way of text messages, dating apps, social media platforms, and then later switch to VOIP chat applications. 
  • They will try to develop meaningful relationships with you, gain your trust, and offer you high-yield investment opportunities in virtual assets, such as cryptocurrency. 
  • They will tell you to open accounts on online investment websites and instruct you to deposit money via wire transfer to shell companies, or direct transfers on legitimate virtual asset service providers (VASPs) or cryptocurrency exchanges. 
  • They will pressure you to invest more money, or your relationship with them will end. 
  • If the scam works, you will most likely be duped and the fraud will end.
  • When you attempt to withdraw money, websites may demand that you pay additional fees to do so; or you may be locked out of the account and never hear back from the perpetrator. Perpetrators disappear with all of your funds. 

Avoid Becoming a Victim

  • Be aware, be skeptical, Think twice, it’s too good to be true, don’t feel embarrassed if you get caught in one of these schemes.  Contact law enforcement. 

Where to Report:

If you suspect you are a victim of a Pig Butchering Scam, notify your bank immediately. Contact your local police department and file a police report. File a complaint on the FBI’s Internet Crime Complaint Center (IC3): https://www.ic3.gov.

Victims should also report to [email protected] and the Secret Service will refer your email to an appropriate field office for immediate action. 

Banks:  Mitigate Your Risk!

  • Focus on “Know Your Customer” (KYC) requirements: Do the businesses and individuals have websites? Are they registered with the appropriate state and federal compliance office?
  • Immediately freeze accounts and conduct compliance checks: Follow up with account owners who you suspect to be victims. Justify the origin of the money. Request supporting documentation, such as invoices for services provided.
  • Contact recipients of outbound transactions:  Ensure transfers are for legitimate purposes.
  • Contact law enforcement if you suspect fraudulent activity: 

    • File a Suspicious Activity Report (SAR) and 314(b) filings. And refer customers who may be victims of Pig Butchering Scams to their local police department to file a police report and to file a complaint on the FBI’s Internet Crime Complaint Center (IC3): https://www.ic3.gov. As noted earlier, they can also contact [email protected] for Secret Service assistance.