Protecting Americans’ Savings: Examining the Economics of the Multi-Billion... (EventID=117659)

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Connect with the House Financial Services Committee Get the latest news: https://democrats-financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/HouseFinanci... Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Wednesday, September 18, 2024, at 2:00 p.m. (ET) Subcommittee on National Security, Illicit Finance, and International Financial Institutions Chair Congressman Luetkemeyer and Ranking Member Congresswoman Joyce Beatty will host a hearing entitled, “Protecting Americans’ Savings: Examining the Economics of the Multi-Billion Dollar Romance Confidence Scam Industry." ___________________________________ Witnesses for this one-panel hearing will be: • Ms. Dara Daniels: Associate Director, Research & Analysis Division, Financial Crimes Enforcement Network (FinCEN) • Mr. Matthew Noyes: Cyber Policy & Strategy Director, United States Secret Service • Mr. Scott Rembrandt: Deputy Assistant Secretary for Strategic Policy, Office of Terrorist Finance & Financial Crimes, Department of the Treasury • Ms. Erin West: Deputy District Attorney, Santa Clara County District Attorney’s Office ___________________________________ Background: Romance Confidence Scams Romance Confidence Scams (RCS), otherwise known as Confidence Scams, Investment Scams, or Pig Butchering, (derived from "Sha Zhu Pan," or Killing Pig Plate) is a type of scam where victims unwittingly transfer considerable wealth to criminal organizations thinking they are making legitimate investments. Scammers purchase leaked personal information off the dark web, and use this information to send seemingly random messages in the form of a text, WhatsApp message, or messages on social media platforms. This initial outreach is staged as a message to the “wrong person” culminating in months of messaging between the victim and scammer to build trust and a personal connection. Ultimately, the scammer introduces a cryptocurrency investment opportunity, resulting in the victim investing thousands of dollars in fraudulent cryptocurrencies. Romance scams, including Pig Butchering, can target people of any age but routinely target individuals who are lonely, going through difficult life events, or the elderly. This scam is known as a “slow burn” or a “long con” where victims are groomed with friendly conversation and the illusion of companionship and/or romantic potential for weeks, even months, before the topic of investments is discussed. Once investment is discussed, the scammer will claim s/he has the ability to make large profits very quickly via cryptocurrency trading. The victims are then taken to a fictitious crypto trading platform with a fake investment portfolio with inflated investment returns. The scammer hastily works to push the victim to invest as much as possible in as little time as possible. This includes encouraging victims to pull from their 401k accounts, take out loans, refinance their homes, liquidate stock positions, or even borrow considerable sums from family and friends. These types of schemes began in China roughly seven years ago. Since then, the scamming industry has amassed an extensive presence with a global impact. Most of the scam centers – where the criminal syndicates operate – are in border towns across Southeast Asia. Targets of pig butchering are primarily located in the U.S., Europe, and other Western countries, but also in China. Online gambling bans in varying degrees across China, Laos, Thailand, andCambodia, combined with the societal and economic repercussions of the COVID-19 pandemic, have forced criminal syndicates to adapt their operations and their workforce recruitment methods. This includes forcing traffickers to “fraudulently recruit people into criminal operations under the pretense of offering them real jobs.” These victims oftentimes fall into human trafficking networks because of widespread business shutdowns and the lack of work opportunities for young graduates in Southeast Asia, and the region. According to the FBI’s Internet Crime Complaint Center (IC3) 2023 Internet Crime Report, over 17,000 complaints with losses of over $652 million were reported due to romance confidence scams in the United States. This is lower than what was observed in 2021 and 2022. In 2022, there were over 19,000 reported complaints with losses totaling over $735 million. In 2021, over 24,000 complaints were reported by victims who lost over $956 million to these scams. Despite these numbers, experts in the field agree that embarrassment prevents many victims from reporting in an attempt to move past the scam without anyone knowing. Human Trafficking and Forced Labor RSCs are a unique type of fraud with “two sets of victims: the individual losing their life savings, and the trafficking victim forced to carry out the heinous... ___________________________________ Hearing page: https://democrats-financialservices.house.gov/events/eventsingle.aspx?EventID=412552