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- It is notoriously difficult to reclaim cryptocurrencies from scammers.
- But Santa Clara prosecutor Erin West has successfully retrieved over $2.5 million lost in so-called pig-butchering scams.
- Now, she teaches other law enforcement agencies how to do the same.
Erin West is the unlikely face of the battle against crypto scammers. Soft spoken and quick to smile, she has ironed out a 25-year career as prosecutor in Santa Clara, a city about 40 miles outside of San Francisco.
While a veteran at fighting local crime across California, international criminals had little to fear from her up until a year ago.
In July, her office did something almost unheard of among law enforcement agencies at any level — it successfully clawed back 318,000 stolen Tether USD, a cryptocurrency pegged to the value of the US dollar.
She describes her efforts as akin to ‘throwing eggs at skyscrapers.’
The case emboldened West and her team to ramp up the fight against criminal syndicates that prey on vulnerable victims. In the year since, they have used it as a template to retrieve over $2.5 million stolen from 17 victims — and the list is growing.
“I talk to victims all day, every day — it’s a firehose of people,” West told DL News. “That speaks to not only the massive scale of this but also, unfortunately, the inability of law enforcement to handle the situation.”
West has become a firebrand promoter of local law enforcement agencies’ ability to fight crypto crime. Well known in crypto spheres, she appears at conferences and is a fixture on LinkedIn — where she spreads the gospel of her three-pronged strategy to “educate, seize, disrupt.”
The education part refers to her new Crypto Coalition, a group of over 900 local crime fighters across the globe. It also means battling the stigma of falling victim to scams.
Both the industry and regulators must do more to stop crypto scams, a crime category the FBI has estimated cost victims over $2.5 billion in 2022, West said.
Without that help, she describes her efforts as akin to “throwing eggs at skyscrapers.”
Pig-butchering scams
The Santa Clara prosecutor focuses on so-called pig-butchering scams. These are long cons where fraudsters fatten up victims’ losses before taking them to slaughter.
This is often done through what she calls heartbreaking manipulation, where the criminals trick victims into investing in fake crypto investment platforms.
“I’ve had grown men crying on the phone to me,” West said.
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She first heard about pig-butchering in 2022 from a member of REACT, an alliance of local, state, and federal law enforcement officials in the Bay Area. West joined the tech-focused task force eight years ago.
The officer said his team struggled with a wave of these scams sweeping California, saying their international nature and the complexity of crypto made them almost impossible to pursue.
West was more optimistic — and for good reason.
In 2018, her team pursued and arrested a group of sim swappers, a type of takeover scam, and seized cryptocurrencies in their possession.
Armed with the same tools, she got in contact with a victim referred to only as ASR, whose case would make up the pilot case. He was a mid-30s single man who had made “some decent money” as a software engineer in Silicon Valley.
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ASR had met an unknown suspect on a dating website and been tricked to invest over $318,000 worth of USDT into a DeFi liquidity pool that promised daily yields of between 5% and 10%, according to a court filing.
It was only when he tried to withdraw the money that ASR realised he had been conned.
He reported the theft to government agencies including the FBI and the Federal Trade Commission, but hadn’t heard anything back. Prior to contacting the REACT team, he had tracked his funds to accounts held at Binance.
The crypto exchange agreed to freeze the funds, but required local law enforcement to step in and make a formal request to seize them.
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That’s where West’s team stepped in. A detective from the police in Gilroy, a city south of San Jose, issued a search warrant to get the money.
“There’s a lot of victim-shaming in these cases, ‘Oh, I would never fall for that,’ or, ‘These guys are idiots.’”
While West said she was not “very optimistic about how helpful Binance would be,” the exchange sent the money, which was put into a government wallet. Later, a judge released $170,000 back to ASR.
The case provided a template for West’s and other teams.
Fighting the stigma
The problem is that many victims reach out too late for police to act.
“It’s a speed game,” West said. “The whole concept is getting victims in front of us as quickly as they can. The sooner they report to us, the more likely we are to be able to get their money back.”
The problem is that many victims hold back, which West says probably stems from the stigma associated with romance scams.
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“There’s a lot of victim-shaming in these cases, ‘Oh, I would never fall for that,’ or, ‘These guys are idiots,’” West said
She emphasised that anyone could fall victim — all it takes is someone who feels lonely.
West has spoken with judges, psychologists, and tech workers — educated professionals who fear for their reputations.
She quoted one victim who worked in finance: “‘I can’t be public with this, because no one will put their money with me — this is too embarrassing,’” West said.
Educate, seize, disrupt
West has recovered money for about a quarter of the cases she’s handled and is now educating other local law enforcement agents to copy her approach.
“It’s got to be bigger than Erin West,” she said.
She urged lawmakers to do more.
“Cryptocurrency is not going away — we all have an interest in creating a safer environment and having platforms for people to put their money in that are safe and regulated,” she said.
‘There’s only one group that’s winning, and that’s an international organised crime syndicate.’
And the problem spans beyond the US. Many criminal networks are run by Chinese nationals operating in Cambodia, Laos, and Myanmar, according to the Global Anti-Scam Organization.
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These international gangs operate out of compounds in those countries, where trafficking victims are forced to scam victims across the world in an “outrageous form of slavery” and are “guarded with people with AK-47s,” West said.
“We’ve got to disrupt their infrastructure and make this stop,” West said.
Exchanges like Binance have “got to do better about the movement of money” on their platforms and prevent criminals from cashing out, West said. Dating apps, too, “could do better to get these people off their platforms.”
A Binance spokesperson told DL News:
“We work hard to keep bad actors off our platform. Despite our best efforts, like most companies, we can’t always preemptively stop every bad actor. However, when we learn of bad behaviour, we intervene and take appropriate action, including freezing funds and working with law enforcement to return funds to their rightful owner.”
And where it seems West would agree, the Binance spokesperson added: “Information and education are the best defence against scams and frauds.”
If others fail to act, West said, “there’s only one group that’s winning, and that’s an international organised crime syndicate. The whole rest of the world is losing.”