Real Estate Agents Targeted in Pig Butchering Cryptocurrency Scams

Real estate agents across the country have lost more than $15 million in cryptocurrency scams, also known as Pig Butchering, that are targeting the industry over the last year, according to a Secret Service representative who spoke recently at the National Association of Realtors® Risk Management Issues Committee meeting during the NAR Realtors® Legislative Meetings in Washington, D.C. The name of the scam is a reference to the practice of fattening a pig before slaughter.

The Secret Service, which works collaboratively with the FBI on cybercrimes, found that more than 60 real estate agents have fallen prey to pig butchering crimes.

“Realtors® are susceptible to these types of scams because they deal in transactions with large amounts of money. The scammers often find their targets through the MLS and agent websites,” according to Mark Edgren, a network intrusion forensic analyst with the Secret Service. “We’re seeing an increasing number of scams targeting real estate professionals, and some have lost a significant amount of money.”

How the Scams Work

Authorities note that often the scam will follow several steps:

1. Initial contact – The scammer reaches out through a random text, phone call or social media message.
2. Build trust – The scammer begins to build trust with the person being targeted.
3. Refer – The scammer then refers their victim to an investment website or advisor.
4. Coach – The scam involves specific instructions on how to trade in cryptocurrency, often showing screenshots of how to “invest.”
5. Pressure – Over time, the trading advisor pressures the targeted person to invest more and more funds.

The scammers create elaborate investment platforms that look like legitimate sites. Many of these fake platforms also have apps available for download on app stores. However, these investment sites are operated by scammers and used to steal the victims’ money.

Scammers will work to build trust and lure victims to invest in some sort of cryptocurrency. The fake investment platform will show the investment is “increasing” while, in fact, the money has already been laundered through various sites.

Example Scenario

One scenario described is that a scammer may pose as a potential buyer and contact a real estate agent, explaining that he would like to purchase a property, often at a high price, entirely with cash.

After establishing a relationship with the agent, the con artist may note that he has made a lot of his money through his investment in some sort of cryptocurrency, like Bitcoin, and suggest that the agent may want to invest as well.

As the victim is led to believe their fund has grown, the scammer may allow the victim to initially remove a small amount of money to build trust further. However, as the victim wants to remove more money, the scammer will demand taxes and fees, causing the victims to lose more and more money. The con artist may also offer to invest as well, then the victim is told their money is co-mingled with other funds involved in laundering, in a further attempt to garner more money from the victim.

Reporting a Scam

Because scammers are laundering the victims’ money almost immediately through several blockchains, comingling with other funds, it’s difficult for law enforcement to track.

“We have a very low success rate in returning funds once we’re called into the case,” Edgren said. “That’s why prevention education and awareness are so important.”

Cybercrimes can be reported on the FBI’s IC3.gov website. Realtors® who have been involved in a crypto crime should report it to Tiffany Loar, a U.S. Secret Service special agent at the Global Investigative Operations Center. They can also report to [email protected].

Those involved in a scam are encouraged to provide many details, like scammers’ names, phone numbers, accounts, names of fake advisors, websites, etc.

“We are trying to jump on these reported scams a lot quicker, and the more detailed the information, the more we can cross-reference the details,” he said. “Ultimately, if it seems too good to be true, it probably is.”

NAR has risk reduction tips on cryptocurrency scams available online.