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How this Sydney man lost 400K in a ‘kill the pig’ scam
Emma Connors AFR - South-east Asia correspondent
Feb 24, 2022 – 2.43pm
Singapore |
M........, a property consultant from Sydney’s eastern suburbs, thought he had done his homework when he took the plunge into currency trading in December 2020.
A friend he had met online a few months earlier, a Chinese woman who used the name Clara, suggested a brokerage firm used by her uncle in Hong Kong. M.........., who does want not his surname made public, looked it up and saw it was licensed to operate in Australia, saw they did not appear on the ASIC "do not do business register", and had favourable reviews. It all seemed above board.
What M.......... did not know was he had been targeted and wooed – “fattened” is the term the scammers use. Once he had made a few trades that appeared successful, he was coached into making a bigger bet. This is when the scammers moved in for the kill.
He ended up losing $400,000, joining the thousands worldwide who have been fooled by elaborate investment frauds known as
shazhupan, or kill the pig, scams. That’s the phrase used by the Chinese crime syndicates who steer the operations and pocket most of the proceeds.
“These are no ordinary
romance or investment scams,” said Jan Santiago, deputy director of a Singapore-based group, Global Anti-Scam Org, where those who have lost money advocate for change and advise the ever-growing list of new victims.
As of last month, GASO had connected more than 1100 victims who together have lost more than $US178 million ($246 million) in the
shazhupan scams.
“Chinese scammers started their ploys at home and exported their trade worldwide when China police started to crack down,” Mr Santiago said.
“Many now operate in south-east Asian countries from where they target individuals in developed nations like Singapore, the United States and Australia. A disproportionate number of victims are well-educated, successful in their careers and/or high net worth,” Mr Santiago said.
Fake investment platforms “clone” legitimate companies so they can trade off their credentials.
M............ has been unable to recover any of the $400,000 he transferred to bank accounts nominated by Sophie Zhao, the senior client manager at the brokerage, Bedbrook International, that Clara recommended.
The police investigation into his case confirmed Bedbrook was a sham. It had “cloned” the identity of a Perth company with the same name to convince M............ – and no doubt many others – that it was registered with the Australian Securities and Investments Commission.
“Police have determined that Bedbrook International is an international fraud syndicate using a sophisticated website to facilitate the deception of victims,” a NSW Police fact sheet for the case advises.
Unusually, someone involved in taking M............’s money has gone to jail, but experts suggest this person was a long way from those reaping most of the proceeds from the fraud.
Software plugins allow manipulation
Tsang Kin, a 21 yo Chinese national in Australia on a permanent partner visa, was recorded on video at ATMs around Sydney in December 2020 withdrawing cash from a bank account that M........... had transferred funds into.
By this time M.......... had been chatting with the woman calling herself Clara Chen that he met on WeChat for about two months. At least, he thinks it was a woman – as he has learnt more about the
shazhupan scams, he’s discovered young men sometimes present themselves as female.
“I thought my money was going into an authorised forex brokerage account with Bedbrook International, and I was using the MetaTrader 5 platform to trade.
“What I know now is there are software "plugins" for that platform which allow it to be manipulated by the broker. You think you are seeing trades in real-time, but you aren’t.”
A few weeks after M............. set up his account, there was a glitch. A couple of his transfers had not landed where they were supposed to. This raised his suspicions. He dug a bit deeper online and discovered others had been similarly trapped.
A police fact sheet states that on December 21, 2020, M........... asked Ms Zhao to return all the funds remaining in his Bedbrook account. Over the following days she gave various excuses as to why the account balance could not be returned.
Police obtained bank records that show that while M........... was asking for his money back, the accounts he had paid into were busily being emptied. Still, the scammers were hoping for more. After blocking M............. on WhatsApp on January 12, 2021, Ms Zhou got back in touch six days later, demanding he cancel the recall request he had put on the funds that had never made it to the accounts she had designated. M............ refused and by January 25 all contact had ceased.
However, the police had traced two accounts, one with St George and another with ANZ, into which M............. had deposited funds. Both had been opened by Tsang. After he was arrested on August 24, 2021, he told police he was paid to open them. He transferred money that was paid into them on behalf of his Chinese associates and kept some as payment.
Fraud investigators are concerned about Australians who are, or soon will be, cashing in their superannuation. “Suddenly there will be all these Baby Boomers with $500,000 and looking to invest. These scammers know how to sniff them out,” said Michael Gerondis, a former detective inspector at NSW Police who has spent the past 15 years helping companies, government agencies and individuals unravel fraud.
‘Just the mule’
Tsang, who is serving a 14-month prison sentence with an 10-months non-parole period, is way down the food chain, said Mr Gerondis, who is familiar with M...........’s case.
“He’s just the mule. They need to have a few people on the ground to transfer money back to China. You might ask why Tsang wouldn’t try to keep the lot – after all, the bank account is in his name. But this is organised crime. If he did try and take it, he’d be dead within a week.”
Mr Gerondis said scammers are getting better at “window dressing” by adding bells and whistles such as cloned certification and what looks like real-time trading.
He believes financial institutions could – and should – do more to stop this brand of criminal activity.
“They can see more than individuals can. It’s not hard for them to flag accounts where sums are coming in from many individuals and then being transferred offshore,” he said.
“Why don’t they? I think it’s because they don’t care. It’s not their money, so they don’t make the effort.”
M.......... said he was fortunate in that the detective assigned to his case achieved a conviction. But he says police are not leveraging enough lower level criminals to get to a higher level.
Through his involvement with GASO, M........... has seen the extent of the organisation behind Clara, Zhou and Tsang. People are trafficked from China to Cambodia and forced to work around the clock on hooking targets such as himself.
“Their lives are under threat. It’s really very distressing.” Australia needs to do more, he said.
“We are as weak as piss on this stuff, and the Chinese gangs are exploiting the weaknesses in our banking system.
“I’ve never been involved with any criminal activity, never had anything to do with the police before this. It’s really opened my eyes. You feel like you have nowhere to go.”
Emma Connors is the South-east Asia correspondent. She was editor of the Perspective and Review sections.
