economist.com

EDGAR MET Rita on LinkedIn. He worked for a Canadian software company, she was from Singapore and was with a large consultancy. They were just friends, but they chatted online all the time. One day Rita offered to teach him how to trade crypto. With her help, he made good money. So he raised his stake. However, after Edgar tried to cash out, it became clear that the crypto-trading site was a fake and that he had lost $78,000. Rita, it turned out, was a trafficked Filipina held prisoner in a compound in Myanmar.

In their different ways, Edgar and Rita were both victims of “pig-butchering”, the most lucrative scam in a global industry that steals over $500bn a year from victims all around the world. In “Scam Inc”, our eight-part podcast, The Economist investigates the crime, the criminals and the untold suffering they cause. “Scam Inc” is about the most significant change in transnational organised crime in decades.

Pig-butchering, or sha zhu pan, is Chinese criminal slang. First the scammers build a sty, with fake social-media profiles. Then they pick the pig, by identifying a target; raise the pig, by spending weeks or months building trust; cut the pig, by tempting them to invest; and butcher the pig by squeezing “every last drop of juice” from them, their family and friends.

The industry is growing fast. In Singapore scams have become the most common felony. The UN says that in 2023 the industry employed just under 250,000 people in Cambodia and Myanmar; another estimate puts the number of workers worldwide at 1.5m. In “Scam Inc” we report how a man in Minnesota lost $9.2m and how a bank in rural Kansas collapsed when its chief executive embezzled $47m to invest in crypto, under the tutelage of a fake online woman, called Bella. A part-time pastor, he also stole from his church.

Online scamming compares in size and scope to the illegal drug industry. Except that in many ways it is worse. One reason is that everyone becomes a potential target simply by going about their lives. Among the victims we identify are a neuroscience PhD and even relatives of FBI investigators whose job is to shut scams down. Operating manuals give people like Rita step-by-step instructions on how to manipulate their targets by preying on their emotions. It is a mistake to think romance is the only hook. Scammers target all human frailties: fear, loneliness, greed, grief and boredom.

• Online scams may already be as big a scourge as illegal drugs
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