According to a press release on Thursday, the Commodity Futures Trading Commission (CFTC) has initiated an enforcement action against a Californian man and his company for operating a sophisticated romance scam that defrauded hundreds of investors out of more than $1 million.
The lawsuit, filed in the U.S. District Court for the Central District of California, claims that California businessman Cunwen Zhu defrauded at least 29 clients between April 2021 and March 2022 of more than $1.3 million designated for trading in digital assets, commodities, and forex through his company, Justby International Auctions.Zhu amassed the money for his own use, transferring the majority of it to bank accounts, digital wallets, and trading platforms for digital assets run by persons he allegedly employed in his alleged scam rather than investing it in cryptocurrency and forex exchanges.
In order to “fatten them up with falsehoods, before soliciting the customer to participate in a fraudulent financial opportunity,” Zhu’s accomplices allegedly developed romantic ties with his alleged victims.Since the pandemic, “Pig Butchering,” or the romantic con, has become more common as loneliness among people who are required to stay at home has risen.
“As people sought to escape the isolation of the pandemic and form a connection to others online, fraudsters saw a new venue to prey on and to take advantage of the public,” said CFTC Director of Enforcement Ian McGinley.
The CFTC has already issued warnings about romance-related cyberfraud involving digital assets.In order to prevent people from falling for scams, the CFTC recently released a number of client protection fraud alerts and articles.