Brandon Essig and Mary Parrish McCracken Publish Law360 Article on Role of Financial Institutions in Fighting Pig Butchering Scams
September 26, 2024
In an article for Law360, Lightfoot partner Brandon K. Essig and associate Mary Parrish McCracken wrote about the role financial institutions can play in curbing the growing problem of so-called pig-butchering scams.
In their piece titled “'Pig Butchering': The Scam That Exploits Crypto Confusion,” Essig and McCracken discussed the sophisticated criminal activity behind the schemes, which trick unsuspecting and often vulnerable individuals (so-called “pigs”) into draining their savings to invest in cryptocurrency through fake trading exchanges. Victims, referred to as “pigs,” ultimately never recover their invested funds from scammers.
It’s a $75 billion problem that ruins lives and decimates victims’ savings. While this is a priority for law enforcement, as Essig and McCracken note in their article, the “response is neither unified nor full-throated.” However, the U.S. Commodity Futures Trading Commission and the U.S. Department of Justice cryptocurrency enforcement team have convened a new working group to coordinate their efforts in stamping out these schemes at their root.
In addition, the Financial Crimes Enforcement Network has also called on financial institutions to put in place measures to recognize the behavioral, financial and technical red flags that could show a customer has fallen prey to cybercriminals. For example, customers who liquidate their savings accounts before maturation or take out additional mortgages and lines of credit on their homes to purchase virtual currency may exhibit financial activity suggesting they are becoming or have already become a "pig."
“Banks can also view logs showing technical activity, including access to customer accounts by unique IP addresses, device IDs or new locations, to monitor suspicious activity akin to pig butchering,” write Essig and McCracken.
They also note that financial institutions are becoming the vital front-line approach to effectively tracking the flow of criminal proceeds and can even prevent scammers from accessing those stolen funds.
“Indeed, scammers may not want to fatten pigs if there is nothing to eat,” they write.
The full article has all the insights shared by Essig and McCracken.
A veteran litigator and former assistant U.S. attorney, Essig maintains a robust civil, white-collar criminal defense and investigations practice. He has tried dozens of high-profile jury cases, and his courtroom experience includes civil and criminal trials in state and federal courts and multiple appellate arguments. Essig also handles a diverse docket of civil cases for the firm’s clients in state and federal courts and arbitration forums.
McCracken represents global, well-known companies in high-stakes personal injury, product liability, medical malpractice and white-collar criminal defense cases. She has substantial experience advocating for executives and stakeholders through all phases of federal or state agency investigations, including high-profile U.S. Department of Justice criminal probes.
