The road to Kaimi’s ruin started in December, with an Instagram message about a Japanese monkey from a handsome stranger who called himself Mike. Over the coming months Mike and Kaimi would develop a friendship that quickly evolved into a romance.
Kaimi had no idea he had become ensnared in a romance scam known as “pig butchering,” from the Chinese phrase sha zhu pan — the name coming from the idea that scammers must “fatten up” victims first with flattery and fake bonding before stealing their money.
Experts told CNBC it’s easy to dismiss victims of these scams as ignorant or foolish, but doing so discounts how manipulative the scammers are.
Matt Friedman is the CEO of the Mekong Club, a Hong Kong-based organization that works with corporations to fight modern slavery. “Ten scams come by, and they’re very clearly a scam,” Friedman told CNBC. “But the 11th one, I even may even fall for it.”
The scam often starts with a simple text message – “Hi!” Many people disregard the messages that scammers send.
But if they respond, the scammers move quickly to establish a rapport. The mystery texter might say they’re a wealthy executive. They’ll share images of their lavish lifestyle. Eventually, they’ll try to make a meaningful romantic bond with the victim. It can take anywhere from a few weeks to a few months.
At the third stage, the scammers offer to “teach” the victim how to trade cryptocurrencies or foreign currencies. The scammer networks operate fake trading platforms that look “exactly the way they should look,” Friedman told CNBC. Victims are “taught” how to trade by their scammer, and the fake exchanges are engineered to show nonexistent profits of 15% to 20%.
When victims try to withdraw money or have run out of fresh funds, the fake exchanges shut down the accounts and demand payment. Panicked and encouraged by their so-called friend, the victims wire what little money they have left. The exchange and their “friend” block the victim shortly after.
It can take weeks before victims understand they’ve been scammed, and even longer to admit what has happened to them.
Experts told CNBC that the scammers on the phone aren’t the real beneficiaries of the scam, although they do sometimes get a cut of the proceeds. Most often, they’ve been trafficked to Cambodia, Laos, or Myanmar to work for organized scamming networks, according to extensive reporting from ProPublica and Vice.
Law enforcement and prosecutors acknowledge pig-butchering is a problem but tell victims they’re largely unable to help. Reported U.S. losses from investment scams totaled $3.31 billion last year, according to the FBI, but experts say that many victims are too embarrassed to report their losses.
The U.S. manages to recover relatively little. The Justice Department’s only public action seized just $112 million. Federal prosecutors in New York and Virginia have also been pursuing domain names and individuals linked to the scams.
Dennis, a small business owner in Maryland, told CNBC his scammer Sarah reached out to him on Facebook around the same time that Mike first reached out to Kaimi.
CNBC has altered their names to protect their identities, as both Dennis and Kaimi shared personally identifiable information and identity documents with their scammers, and as Kaimi has not disclosed his sexual orientation to everybody in his life.
Kaimi lost more than $120,000 to his scammer. Dennis lost around $500,000.
‘My love for you will last forever’
Mike first messaged Kaimi in late December, cracking a joke about a Japanese monkey that Kaimi had posted.
“When I was looking at who had messaged, I was like, ‘I don’t know if this person is real,'” Kaimi told CNBC. After a few days, Kaimi sent back a perfunctory message. Mike promptly responded and engaged enthusiastically with Kaimi, before suggesting they move to a messaging app called Line.
CNBC reviewed thousands of messages between Kaimi and Mike running through Apr. 2023.
They bonded over their shared love of travel, and Mike eventually invited Kaimi to visit him Seoul. They’d go shopping, Mike said.
Kaimi told Mike that his schedule as a teacher didn’t let him just jet around the world, and he’d have to save money for an international trip. When pressed, Kaimi told Mike about his financial difficulties, stemming from past credit-card debt.
Mike suggested teaching Kaimi how to trade in foreign currencies so he could travel to Seoul and pay off his debt.
Mike alternated between talking about making Kaimi rich and sending him what Kaimi described as “flowery” messages.
“My love for you will last forever,” Mike told him.
Kaimi acquiesced in January, and created an account on the forex platform Mike claimed he used, called DPEX.
DPEX wasn’t a real exchange, but a front controlled by the same scamming group that Mike belonged to.
Over the following weeks, Kaimi wired thousands of dollars from his bank to Crypto.com, a centralized exchange. He used it to buy ether and send it to DPEX’s wallets.
His transfers started small – the first was worth just $140. DPEX claimed it converted his ether transfers into Tether, a U.S. dollar stablecoin.
Mike and Kaimi’s first trade together was a bet against the Japanese yen falling in value. When Kaimi saw he’d made $20 on a $100 trade, he was sold.
Mike offered to help Kaimi structure a plan to use profits from DPEX pay off his $300,000 in student loans, mortgage, and credit cards. In February, Mike even “sent” $30,000 from his own DPEX account to Kaimi’s to help him move closer to his debt-free goal.
“I want to repay you as soon as possible, shrink down most of the debt, then plan a trip to Korea to see you,” Kaimi told Mike. Mike pressed Kaimi to add more to his account and join him in bigger bets. He grilled Kaimi about how else he could raise money, from friends or through loans.
In all, Kaimi sent DPEX more than $100,000 worth of ether. His paper profits grew handsomely: in one week in March, Kaimi’s balance went from $100,000 to $310,000.
“I thought I was someone who knew when they were being scammed, was able to discern things,” Kaimi told CNBC.
But when Kaimi told Mike he was planning to withdraw his funds, the penny dropped. DPEX froze Kaimi’s account, claiming that Mike’s generous $30,000 “gift” was a suspicious transaction.
Mike claimed his account was frozen too. “OMG,” Mike said. “we are the same.”
DPEX asked that Kaimi pay back that gift to unlock his full account balance. Kaimi had planned to do so anyway, but sent DPEX nearly $30,000 to settle the “debt.”
The scammers settled into a predictable pattern, pumping Kaimi for more and more fees and taxes. Kaimi paid $64,000 in apparent penalties, urged on by Mike. When the scamming operation asked him for another $65,000, Kaimi realized that there was no chance he was getting his money back.
When Mike pressed him to pay DPEX’s “fees,” Kaimi snapped. “I’ve filed a report to the FBI and the SEC,” he told Mike.
‘I thought of ending everything’
This is one of the images that Dennis’s scammer, “Sarah,” sent him. The face has been blurred to disguise the identity of the woman pictured, whose image may have been used without her knowledge.
Dennis didn’t have any reason to be suspicious when his first scammer, Sarah, messaged him on Facebook.
“I just said hi and bye,” Dennis told CNBC. “But she keeps approaching me,” he said. “We became friends.”
Sarah claimed she was a wealthy executive at a Chinese electric-vehicle manufacturer. She showed him photos of her “uncle” with Alibaba’s Jack Ma. She sent him photos and videos from luxurious stores and apartments.
But it was her show of affection and care more than her material wealth that drew Dennis close.
“They talk to you and manipulate you,” Dennis told CNBC. He was in the midst of separating from his wife. They shared a child together, and in his messages with Sarah, he shared his feelings of inadequacy as a father.
Sarah offered Dennis comfort. They talked for hours every day, and it was weeks before she first offered to teach him how to trade crypto.
Another picture “Sarah” sent Dennis.
Sarah said her powerful uncle ran a trading syndicate large enough to influence crypto prices and guarantee a profit. Experts say that scammers will often cite a well-connected relative as part of their fictitious success.
Sarah pointed him to an “exchange” called Bigone-Eth, and could only be accessed through a iOS app called Trust Wallet. Dennis sent thousands of dollars from Coinbase to Trust Wallet, and gave the fake exchange permission to control the crypto in his Trust Wallet.
Sarah guided him through trades that predictably returned 20% From late December through January, Dennis bought nearly $160,000 worth of bitcoin for his “Bigone-Eth” account, and invested $100,000 worth of his cousin’s Bitcoin with Bigone-Eth as well.
It wasn’t enough for Sarah, who told Dennis he needed to invest at least $500,000. Otherwise, she suggested, Dennis’ son would “suffer” because of Dennis’ laziness.
But like Kaimi, Dennis felt he’d made enough. The hammer fell when he went to withdraw his winnings: Bigone-Eth froze him out and demanded $180,000 to release his $1.2 million balance.
The demand made Dennis suspect that the broker was trying to scam him out of his money. It was only in March, months after he began talking with Sarah, he began to investigate romance scams and fake crypto brokerages.
Along the way, he conducted an internet search and found a company called Financial Fund Recovery, or FFR, which said it specialized in crypto asset recovery.
Bankrupt and ‘scammed out of my mind’
In late March, Dennis spoke with a person claiming to be an FFR employee, John Seth, who told Dennis that Sarah and the exchange were part of the same scam. Seth also promised he could recover Dennis’ assets, something Dennis now believes was a lie.
Just a few days after Dennis spoke with Seth, he got an unsolicited call from someone identifying himself as Benjamin Grey. He claimed he worked at Bigone-Eth, and told Dennis that he could recover his money for $100,000. Dennis never provided Bigone or Sarah with his phone number, and now suspects Grey was working with Seth to scam him out of more money.
But Dennis, more alone than ever, trusted Seth. Seth urged Dennis to pay the fee but keep it secret from Sarah and the Bigone-Eth scammers. He borrowed $100,000 from his parents and sent it to Grey through Coinbase.
Dennis didn’t notice that Grey’s wallet address was different from the original scammers, nor that Grey’s email address had a slight misspelling of Bigone-Eth’s name. Dennis thought he was on the verge of getting his money back, of repaying his parents and his cousin and moving on from his life.
Dennis was out another $242,000 by the time Seth told him to stop talking with Grey.
Seth suggested suing Grey and Bigone for the lost money. He sent Dennis an invoice detailing how FFR would put a “lien” on Dennis’ Bigone account — which, in fact, was a fictitious account at a fictitious exchange. Dennis would simply have to wire $42,000 to an Abu Dhabi bank account to get started.
This time, Dennis realized he was being “scammed out of his mind,” and blocked both Seth and Grey.
CNBC spoke with Seth, who strongly denied that FFR was running a scam. He implied that Dennis was lying to CNBC, and said that FFR did not have an employee named Benjamin Grey.
CNBC has reviewed financial documents, emails, blockchain transactions, and recordings of calls between Dennis, Grey, and Seth. Despite his claims to the contrary, the recordings show Seth encouraging Dennis to send money to Grey. Both Seth and Grey contacted Dennis using VoIP numbers from the same issuer. Both numbers were disconnected after CNBC reached out to them.
Other attempts to reach FFR were not successful. In a text conversation with the number Dennis offered for Grey, the person on the other end denied knowing anything about the interaction with Dennis. A customer service representative at FFR’s Abu Dhabi-based bank confirmed that company had an account there but declined to provide further information.
FFR used an address of a coworking space in the state of Georgia to register as a limited liability company in Georgia. Over the phone, a receptionist at that coworking space told CNBC that FFR was not a tenant there, and that the mailbox used on the registration form did not exist at that space.
But the receptionist said that a visitor had been looking for FFR’s office just a few weeks prior, and had told the receptionist that FFR had made off with a scam victim’s money.
‘Powerless’
In the U.S., law enforcement are still grappling with how to seize and restore victims’ funds. In California, Santa Clara county prosecutor Erin West is pushing regulators and law enforcement to better understand how these scams work.
West has had some success at a local level in seizing a few million dollars for a handful of victims. But she says without federal intervention and private sector support, putting a meaningful dent in scamming operations will be difficult, if not impossible.
“I wish I could save them all,” she told CNBC. Both Dennis and Kaimi reached out to West, who did what she could to connect them with the right people.
But Dennis and Kaimi’s losses form just a small fraction of the billions of dollars lost to scammers from thousands of victims. In 2022, the Department of Homeland Security estimated scam-related losses at over $3.3 billion. Kaimi has considered filing for bankruptcy. His local Hawaiian bank has closed his checking and savings accounts, according to a letter from the bank shared with CNBC. Kaimi said a bank employee told him his Crypto.com wire transfers were the reason for the closure but didn’t offer any more information to him.
He’s filed multiple complaints, with the FBI, Secret Service, and regulatory agencies, but hasn’t heard back from any of them.
Dennis said he’s been in regular contact with the FBI about the scam. CNBC traced Dennis’ bitcoin to a wallet that’s received more than 59,000 bitcoin, worth about $1.6 billion, since 2019. The trail ends after that wallet, which regularly transfers its contents to the crypto exchange Binance.
Crypto exchanges like Binance, Crypto.com and Coinbase are convenient waypoints for scammers because they have a trusted reputation and massive trading volume. All three exchanges have warned of the dangers of crypto scammers, but for some, that isn’t enough.
When he reached out to Crypto.com, the exchange told Kaimi they couldn’t help him get his money back.
“I’m not asking you to take responsibility of getting my money back,” he said. But he pointed out that his scammers had used the same wallet for months.
West says that while private partners in the banking and crypto industry often are conduits for these kinds of scamming operations, they are also ideally positioned to cut off the supply of fresh money to pig butchering networks.
“We are essentially fleecing our entire middle class of their generational wealth, and handing it to bad actors overseas, and nobody’s stopping this,” West told CNBC.
Shortly before publication, Cloudflare shut down Bigone-Eth’s domain name and flagged it as a suspected phishing site. Neither Cloudflare nor the FBI responded to a request for comment.
Within hours, Dennis’ scammer sent him the new domain name and begged him to respond to her. Dennis ignored her.
“Disappointing men with no sense of responsibility,” she wrote the next day.
Apple is losing market share in China due to declining iPhone shipments, supply chain analyst Ming-Chi Kuo wrote in a report on Friday. The stock slid 2.4%.
“Apple has adopted a cautious stance when discussing 2025 iPhone production plans with key suppliers,” Kuo, an analyst at TF Securities, wrote in the post. He added that despite the expected launch of the new iPhone SE 4, shipments are expected to decline 6% year over year for the first half of 2025.
Kuo expects Apple’s market share to continue to slide, as two of the coming iPhones are so thin that they likely will only support eSIM, which the Chinese market currently does not promote.
“These two models could face shipping momentum challenges unless their design is modified,” he wrote.
Kuo wrote that in December, overall smartphone shipments in China were flat from a year earlier, but iPhone shipments dropped 10% to 12%.
There is also “no evidence” that Apple Intelligence, the company’s on-device artificial intelligence offering, is driving hardware upgrades or services revenue, according to Kuo. He wrote that the feature “has not boosted iPhone replacement demand,” according to a supply chain survey he conducted, and added that in his view, the feature’s appeal “has significantly declined compared to cloud-based AI services, which have advanced rapidly in subsequent months.”
Apple’s estimated iPhone shipments total about 220 million units for 2024 and between about 220 million and 225 million for this year, Kuo wrote. That is “below the market consensus of 240 million or more,” he wrote.
Apple did not immediately respond to CNBC’s request for comment.
Amazon said it is halting some of its diversity and inclusion initiatives, joining a growing list of major corporations that have made similar moves in the face of increasing public and legal scrutiny.
In a Dec. 16 internal note to staffers that was obtained by CNBC, Candi Castleberry, Amazon’s VP of inclusive experiences and technology, said the company was in the process of “winding down outdated programs and materials” as part of a broader review of hundreds of initiatives.
“Rather than have individual groups build programs, we are focusing on programs with proven outcomes — and we also aim to foster a more truly inclusive culture,” Castleberry wrote in the note, which was first reported by Bloomberg.
Castleberry’s memo doesn’t say which programs the company is dropping as a result of its review. The company typically releases annual data on the racial and gender makeup of its workforce, and it also operates Black, LGBTQ+, indigenous and veteran employee resource groups, among others.
In 2020, Amazon set a goal of doubling the number of Black employees in vice president and director roles. It announced the same goal in 2021 and also pledged to hire 30% more Black employees for product manager, engineer and other corporate roles.
Meta on Friday made a similar retreat from its diversity, equity and inclusion initiatives. The social media company said it’s ending its approach of considering qualified candidates from underrepresented groups for open roles and its equity and inclusion training programs. The decision drew backlash from Meta employees, including one staffer who wrote, “If you don’t stand by your principles when things get difficult, they aren’t values. They’re hobbies.”
Amazon, which is the nation’s second-largest private employer behind Walmart, also recently made changes to its “Our Positions” webpage, which lays out the company’s stance on a variety of policy issues. Previously, there were separate sections dedicated to “Equity for Black people,” “Diversity, equity and inclusion” and “LGBTQ+ rights,” according to records from the Internet Archive’s Wayback Machine.
The current webpage has streamlined those sections into a single paragraph. The section says that Amazon believes in creating a diverse and inclusive company and that inequitable treatment of anyone is unacceptable. The Information earlier reported the changes.
Amazon spokesperson Kelly Nantel told CNBC in a statement: “We update this page from time to time to ensure that it reflects updates we’ve made to various programs and positions.”
Read the full memo from Amazon’s Castleberry:
Team,
As we head toward the end of the year, I want to give another update on the work we’ve been doing around representation and inclusion.
As a large, global company that operates in different countries and industries, we serve hundreds of millions of customers from a range of backgrounds and globally diverse communities. To serve them effectively, we need millions of employees and partners that reflect our customers and communities. We strive to be representative of those customers and build a culture that’s inclusive for everyone.
In the last few years we took a new approach, reviewing hundreds of programs across the company, using science to evaluate their effectiveness, impact, and ROI — identifying the ones we believed should continue. Each one of these addresses a specific disparity, and is designed to end when that disparity is eliminated. In parallel, we worked to unify employee groups together under one umbrella, and build programs that are open to all. Rather than have individual groups build programs, we are focusing on programs with proven outcomes — and we also aim to foster a more truly inclusive culture. You can read more about this on our Together at Amazon page on A to Z.
This approach — where we move away from programs that were separate from our existing processes, and instead integrating our work into existing processes so they become durable — is the evolution to “built in” and “born inclusive,” instead of “bolted on.” As part of this evolution, we’ve been winding down outdated programs and materials, and we’re aiming to complete that by the end of 2024. We also know there will always be individuals or teams who continue to do well-intentioned things that don’t align with our company-wide approach, and we might not always see those right away. But we’ll keep at it.
We’ll continue to share ongoing updates, and appreciate your hard work in driving this progress. We believe this is important work, so we’ll keep investing in programs that help us reflect those audiences, help employees grow, thrive, and connect, and we remain dedicated to delivering inclusive experiences for customers, employees, and communities around the world.
New Tesla Model 3 vehicles on a truck at a logistics drop zone in Seattle, Washington, on Aug. 22, 2024.
M. Scott Brauer | Bloomberg | Getty Images
Tesla is voluntarily recalling about 239,000 of its electric vehicles in the U.S. to fix an issue that can cause its rearview cameras to fail, the company disclosed in filings posted Friday to the National Highway Traffic Safety Administration’s website.
“A rearview camera that does not display an image reduces the driver’s rear view, increasing the risk of a crash,” Tesla wrote in a letter to the regulator. The recall applies to Tesla’s 2024-2025 Model 3 and Model S sedans, and to its 2023-2025 Model X and Model Y SUVs.
The company also said in the acknowledgement letter that it has already “released an over-the-air (OTA) software update, free of charge” that can fix some of the vehicles’ camera issues.
In 2024, Tesla issued 16 recalls in the U.S. that applied to 5.14 million of its EVs, according to NHTSA data. The recall remedies included a mix of over-the-air software updates and parts replacements. More than 40% of last year’s recalls pertained to issues with the newest vehicle in the company’s lineup, the Cybertruck, an angular steel pickup that Tesla began delivering to customers in late 2023.
Regarding the latest recall, the company said it had received 887 warranty claims and dozens of field reports but told the NHTSA that it was not aware of any injurious, fatal or other collisions resulting from the rearview camera failures.
Other customers with vehicles that “experienced a circuit board failure or stress that may lead to a circuit board failure,” which cause the backup camera failures, can have their vehicles’ computers replaced by Tesla, free of charge, the company said.
Tesla did not immediately respond to CNBC’s request for comment.
