What is pig butchering? How scammers have stolen $75 billion

WEST BLOOMFIELD TWP, Mich. (FOX 2) - Metro Detroit has been seeing an increase in investment scams recently. Now, West Bloomfield Police are warning about a scammed called ‘pig butchering’ and it could cost you hundreds of thousands of dollars.

The West Bloomfield Police Department says they're getting complaints of people being targeted by con artists who spend weeks or even months with their victim – before pulling out with all of the victim's money.

The scam is extremely costly. A recent study by the University of Texas Austin found that over the past four years, criminal networks moved more than $75 billion dollars worldwide. 

What is pig butchering?

The backstory:

"The term for it is called Pig Butchering. And it typically involves building trust with victims. Conversations can go on for weeks or months before the attacker moves in and asks for an investment that's where they fatten up the target and take them for as much money as they can," said David Derigiotis.

Derigiotis is the president of Flow Brokerage and says scammers build your trust and then make promises of making you rich investing in lessor-known stocks and by following the trends.

"They take them for a little bit in the beginning. They might even give that individual a bit of a return, to show them that it's legitimate but ultimately they are going for the big payday – and we're talking thousands or hundreds of thousands of dollars," Derigiotis said. "Over the last several months, the cryptocurrency market has been very hot. Prices across the board, from Bitcoin all the way down, have risen so it's drawn a lot of attention including that of scammers."

The scammers then create a virtual spiderweb as they try to convince you that everything is real you are really making money.

"The whole thing is completely fake. A lot of times it's promised returns, promised guarantees, and with any investment there is no way you can guarantee 30%, 50%, or even doubling your money. That's what they do in this case," he said.

The scam can be tempting - especially if you see others living a life of luxury. In other words, it's fear of missing out.

"That's what it is. It's FOMO. I don't want to miss out, there is a big craze going on how can I get in this space. They attach on to that and look to take advantage," Derigiotis said. 

What we know:

Derigiotis says the simplest thing to do is recognize if something is too good to be true.

"There is no guarantee of return and if there is pressure to act now it's a big red flag," he said. "A lot of times you see conversations migrate over to a Whatsapp or Discord. They use them because there is a variety of encription tied to them and so law enforcement can't necessarily get to the contents of the conversation."

And if you do fall for it, there's bad news.

"It's typically cryptocurrency and crypto is peer to peer, no bank, no third party. Once you send the money it's like cash: it's gone," Derigiotis said.

If you realize it's as scam - report it.

"Report it to the FTC and the FBI.  Make sure people are aware that this scam is taking place and make it harder for them to go to the next person," Derigiotis said.

A last way to protect yourself is to make sure the person you're talking to is licensed to give financial advice. You can check their name or the company using a site called brokercheck.finra.org - the site is authorized by Congress to protect American investors.