This study re-examines the fraud colloquially called ‘pig butchering’, which the authors rename hybrid investment fraud: offenders gain trust by forming connections or relationships, then use confidence-building and coercive measures to push victims into repeated investment in securities or commodities until victims cannot or will not keep paying, or the offenders become unreachable. Reviewing 1,314 news reports and court documents, the authors identified and qualitatively analyzed 59 U.S. cases.
Research Objectives
- Recontextualize the fraud colloquially called ‘pig butchering’ and argue for the term hybrid investment fraud.
- Assess whether existing fraud taxonomies can accommodate it.
- Identify victims and offenders, and whether lone actors, dyads, or organized groups commit the fraud.
- Document offenders' tactics, tools, areas of operation, and modus operandi.
Methodology
- Searched NexisUni for English-language North American news reports and court documents published between January 1, 2018, and November 1, 2023.
- Search terms included ‘pig butchering’, ‘Shā Zhū Pán’, and romance, investment, and cryptocurrency combinations.
- Reviewed 1,314 documents, excluding warnings and tips, those without an actual case, and non-U.S. victims.
- Coded independently and reconciled; the authors disagreed on 34 documents, resolved by discussion.
- Analyzed the 59 cases (24 court documents, 35 newspapers) using a codebook covering fraud type, loss, length, victims, offenders, and methods.
Key Findings
- The cases did not fit the Beals et al. (2015) fraud taxonomy: many involved romance and cryptocurrency, others only friendship or professional ties, five gold, and one NFTs.
- Where reported, losses ranged from $22,000 to $9.6 million; victims liquidated retirement accounts, refinanced homes, and enlisted relatives and friends; some reported suicidal thoughts, psychiatric distress, hospital admission, and relationship breakdown.
- Demographic data were incomplete: only 13 cases gave the victim's age (22 to 68), differing from the 25 to 40 concentration reported by the Global Anti Scam Organization.
- Several cases evidenced organized criminal groups: one named 11 members with distinct roles, another split labor among solicitors, trading firms, and shell companies; in most cases offender counts could not be established.
- A few offenders agreed to video calls, which victims read as reassurance since public warnings treat refusal as the red flag, though others refused; one case involved an emergency money request, conflicting with Cross's (2023) romance baiting account.
Recommendations
- Replace ‘pig butchering’, regarded by the authors as dehumanizing and imprecise, with hybrid investment fraud.
- Modify existing fraud typologies to classify hybrid frauds, which combine tactics, targets, and tools from several fraud types.
- Improve crime measurement: IC3 records these incidents as investment fraud, the end sought; existing tools do not report hybrid investment fraud.
- Broaden the evidence base with more diverse data and richer empirical detail from a wider regional and global range.
Key Takeaways
- Hybrid investment fraud is defined by convergence, not romance or cryptocurrency alone; terminology and typologies lag behind.
- The evidence rests on 59 non-representative public-document cases, so demographic patterns are indicative, not settled.
- Offenders stated they were or were believed to be in Canada, Cambodia, China, Laos, Thailand, Malaysia, and Vietnam, and others operated in the United States, though many locations were unidentified; reports the authors cite describe trafficked people forced into this fraud in Cambodia, Laos, Thailand, and Malaysia, relevant to Thai and ASEAN agencies.
References
Maras, M.-H., & Ives, E. R. (2024). Deconstructing a form of hybrid investment fraud: Examining ‘pig butchering’ in the United States. Journal of Economic Criminology, 5, Article 100066. https://doi.org/10.1016/j.jeconc.2024.100066
Full text (Open Access): https://www.sciencedirect.com/science/article/pii/S2949791424000186
