How Crypto Scam Compounds Use Romance to Make Billions

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2:46Hey, this is Brian. We're taking a break from our round table this week, but we didn't want to leave you empty-handed. So we're sharing one of our favorite stories that we featured on the show, an investigation into a whistleblower trapped in a scam compound in Laos. I sat down with Wired's Andy Greenberg earlier this year to learn about it, and trust me when I tell you that the twists and turns of this story will make your head spin. We hope you enjoy it.

3:11I was, you know, having a normal Saturday on the roof with my kids. They were like playing in a kiddie pool. Last summer, my colleague Andy Greenberg was enjoying an idyllic late afternoon in New York. There had just been like a rainstorm and there was a rainbow. It was a very beautiful evening. And I, you know, in typical, terrible 21st century parenting style, was ignoring my kids and looking at my phone and scrolling through messages. In the middle of mindlessly scrolling between apps. I've got this email. I found this email from someone with a pseudonym who was messaging me from the encrypted email service ProtonMail.

3:46The email is from an unnamed source who claimed to be a computer engineer in Laos. A computer engineer trapped in a compound in the region of Laos who wanted to be a source, who wanted to be a whistleblower inside this crypto scam compound. As a cybersecurity reporter, crypto scams are Andy's bread and butter. That's what he's constantly tracking down. Trends in hacking and cybercrime. But crypto scam compounds are a beast of their own. These are places where scam operations happen at an industrial scale. And crypto scams have become the most profitable form of cybercrime in the world, pulling in tens of billions of dollars each year.

4:23Andy didn't know if this anonymous source was legit, but he followed up and told the source to message him through Signal. Later that evening, Andy received a flurry of messages. They shared really detailed documents right off the bat, like an actual written report, a summary of everything they'd experienced and everything about the way that this scam compound worked, including this very, very detailed flowchart that included some elements that I had never heard of before. These documents describe step by step the methods that this crypto compound uses to lure victims into their scams. From creating fake Facebook and Instagram profiles to using hired models and AI deepfake tools, all of it to create the illusion of a romantic prospect, something they call pig butchering.

5:08The idea of pig butchering is that these are crypto romance investments. scams. The operation starts with the scammer using social media profiles to convincingly take the identity of, say, a wealthy woman. A wealthy woman getting in touch, usually with a lonely, very often older man, and enticing them with some sort of intimate relationship. Trust is built through these video calls and constant back and forth messages. The pig butchering part of this is that the pig is fattened up with this emotional connection, Like somebody builds a real relationship with the victim until there's a lot of trust and intimacy.

5:48Eventually, the scammer gives some financial advice to their mark. And, you know, this wealthy woman says, you know, by the way, like I can help you become wealthy too. It seems like you're having some financial problems and I can just refer you to the same crypto trading platform that I use. And you can easily double your money. It's a very safe bet. I'll walk you through it. In fact, like, I would be kind of disappointed in you if you didn't try it. And that process is incredibly effective, it turns out. And only after weeks or months of that fattening up romantic process is the pig butchered.

6:24If you're wondering how someone could fall for that, you should know that the methods these scammers use take everything into account. Through documents shared by his news source, Andy learned that they use deepfakes to interact with their victims through video calls and AI chatbots to finesse their messages. They also make sure to match the scammers' ethnicity with that of their target to avoid any language or cultural barriers. But the thing is, these operations don't just make victims out of their targets. Scam compounds lure workers, meaning the scammers behind the fake Facebook and Instagram accounts, from Asian and African countries with legitimate job offers.

6:55Once they arrive at the sites, their passports are taken and they're essentially trapped and forced to become scammers. A human trafficking operation that essentially enslaves people, tricks them into coming to this kind of compound, turns them into forced laborers, traps them there, and forces them to scam people for sometimes 15, 16 hour shifts. On one side, it's taking people's entire life savings. Very often, hundreds of thousands or even over a million dollars from victims in a single scam. But then on the other side, there are hundreds of thousands of enslaved people whose lives have been completely ruined as they're trapped in these compounds.

7:32The engineer who reached out to Andy is one of these workers trapped in Laos, in a region bordering Myanmar and Thailand, where illicit operations are the norm. The Golden Triangle, I've always heard about it as this kind of like vague region at the intersection of the borders of Laos and Myanmar and Thailand. It has been carved out as this special economic zone that is kind of almost in an official sense, not controlled by Laos, but instead controlled by Chinese business interests. It is essentially run by Chinese, both business people and very often Chinese organized criminal syndicates. This very small area, just like half the size of Washington, D.C.

8:12or something, it is now a hub for all sorts of transnational crime. And crypto scam compounds may in fact be the biggest and most lucrative form of those. And now it's seen the engineer who contacted Andy was willing to be a whistleblower for one of these compounds. This was somebody who had been trapped like this and wanted to expose everything he could about the operation. Andy's trying to figure out if this guy is legit when he calls him out of the blue. Hello. Hello. Hello. Fine. How are you? Good. Good. Thank you for being willing to talk. I picked up the phone and I'm talking to this young, very polite man with an Indian accent.

8:54What is your name or what can I call you? You can call me from any name, brother. No matter. Oh, but you tell me, just so I know how to talk to you and what name to call you. You can make one up if you like, of course. You can call me Red Bull, okay? Oh, Red Bull? Red Bull? Yeah, yes. Okay, okay. And I later found out that he was looking at an empty can of Red Bull Energy drink on the table in front of him when he said that. he was so motivated as a source, so driven, that I was like kind of almost, you know, I was a little put off. I was wary of this person. And I quickly kind of actually hung up and then called him back on a video call because I wanted to see who I was talking to.

9:46And he picked up with no hesitation and showed me his face on the video call, showed me around the hotel room. He had actually managed to book a hotel room. And I asked him to show me out the window, to walk outside the hotel. It was nighttime, my time, but it was daytime there. And he showed me the front of the hotel, which I could see that it was a Chinese language sign, that there were palm trees and that it looked like a kind of poor tropical area where everything was in Chinese. And like, that certainly sounded like the golden triangle to me. So, you know, I started to get what felt confirmation very quickly that he was who he said and that he really was in a scam compound and that he was in the golden triangle.

10:32I think it's interesting too. I think when you hear about people and about people enslaved in these compounds, you don't really necessarily think that they have that amount of mobility, the ability to go rent out a hotel room, walk around on the street, take video, but it's a little bit of a different setup in terms of what's keeping them there. Is that fair to say? You know, I was also surprised. Like, I had read reports of these scam slavery compounds where people are held in shackles and beaten every day and electrocuted in some cases. And, you know, they're held almost like in the jungle in remote places.

11:07And the Golden Triangle compounds are not like that, in part because the Golden Triangle itself is almost like a mega compound. The victims of these human trafficking operations, even if they walk around outside the building where they work or even the dormitory where they live, their passport has been taken away. The police have very often been paid off by the compound mafia. They can't really leave regardless. So they have a surprising freedom of movement because the whole place is essentially like a closed circuit. A closed circuit where, as the source, Red Bull, described to Andy, they had a strict work schedule and punitive measures.

11:44They were actually paid, in theory, a salary of like$500 a month or so in Chinese yuan. But then that money was taken from them almost entirely through fines for every tiny violation that their bosses could think of. They had access to a cafeteria where they were fed, but that food was withheld if they so much as showed up late to work or late to lights out in the dormitory. So there was this illusion of them being there voluntarily, being paid a salary. They were even, in theory, paid a commission on any scams they pulled off. But Red Bull was entirely broke. He had been scammed into absolute poverty, had no money.

12:24So it was a kind of Orwellian thing where the bosses would, you know, give people these inspirational speeches as if they were like part of some corporate sales force, like part of a car dealership or something. And in fact, they were absolutely forced laborers with no choice about what they were doing and who faced really brutal consequences if they ever broke the rules or tried to escape. It had been less than 24 hours since Red Bull had first made contact, but the details were quickly mounting up. He told Andy that they should involve law enforcement and that he was willing to work with an FBI handler.

12:58He specifically wanted to inform them about an upcoming in-person cash transaction that was happening on U.S. soil and was related to one of the compound scams. They were going to do an in-person pickup of cash with a courier. So Red Bull wanted me to arrange a sting operation to catch this courier and, you know, question this guy. And he thought that that would be like a big win against the scam operation. That's when Andy decided to reach out to Aaron West, a former California prosecutor who now runs an anti-scam organization. Aaron thought, you know, there was no time to do a sting. She also said that any courier is super far down the hierarchy of a scam operation and it would not be a good idea.

13:40Also, she pointed out that that would call attention to the fact that there was a leak in the compound and could put Red Bull's life at risk. But then I asked her, you know, what do you think about putting him in touch with an FBI agent, somebody to be his handler? Can you recommend somebody? And to my surprise, she suggested that I not do that either. She thought that the story that I could produce with Red Bull as a source would be more important than anything he could give law enforcement. The best case scenario in years, what he provided might lead to the arrest of somebody low down in the org chart of a scam compound or possibly just charges in absentia for somebody who could not possibly be arrested or extradited from Laos, from the Golden Triangle.

14:25As she put it, the cavalry is not coming. Nobody from Interpol or the FBI is going to march into this scam compound in the Golden Triangle and start arresting people. When Red Bull suggested that you organize a sting, which Andy, you are an incredibly gifted reporter. I believe that's not in your skill set necessarily. Absolutely not. But it was, I think, an indicator of something that we ended up talking about a lot throughout this reporting process, which is that Red Bull was not just willing, but at times very eager to take big chances. Yeah, Red Bull was just remarkably risk tolerance, like had so many dangerous ideas about what he wanted to do.

15:05He wanted to wear a hidden camera or hidden microphone, a button camera or some sort of watch with a recording device in it. He wanted to install spyware on his boss's computer. He wanted to set up screen recording software on his work PC so that I could see what he was doing all day long. and you know I consulted with you about all these things and then many you know other experts and everybody told me you know one by one like these are not good ideas like this will get Red Bull killed and I took that very seriously and we didn't do any of that I talked him out of all of those ideas and what we ultimately settled on was you know a much simpler system that I still think actually turned out to be pretty effective which was just that he installed a disguised version of Signal on his work PC.

15:55A disguised version of Signal. Basically, Red Bull installed the app on his work computer with a different icon, making it look like it was a shortcut to his hard drive. And then we would talk with disappearing messages set to like a very low time period so that the messages, there was not much of a log if we were ever caught. Andy and Red Bull also took up aliases. He would pretend that he was talking to his uncle. He would call me uncle from time to time, just in case like somebody spotted what he was doing. Some of those aliases were a little more embarrassing than others. Eventually, we kind of upgraded our cover story to me pretending to be his secret girlfriend.

16:31And we used a lot of heart emojis, but that was a little too cringy, and we just couldn't keep it up. But the golden rule that stuck was how Andy and Red Bull would say hi to each other. We created a protocol where, you know, when we started the conversation, the first person would say Red, the second person would say Bull, to make sure that his computer had not been seized. As their communication got into a rhythm, Red Bull filled in a very detailed map of the inner workings of the scam compound operation. He sent me photos of a whiteboard that showed a leaderboard of who had scammed the most that month.

17:04He sent me a spreadsheet that turned out to be a floor plan of the whole dormitory and all the different workers there. He sent me a picture of this big Chinese ceremonial drum that was played for scams of$100 ,000 or more. And then like once in a while, he would then tell me to record my screen and turn on video on those calls and then keep pretending to talk to his uncle as he walked around and videotaped. And I recorded, you know, outside the compound, into the lobby of the office, sometimes into the cafeteria, and once into the actual work floor, the office itself, where I could see, you know, the whole layout of the office and even colored flags on different teams' desks to connote whether they had met their scam quota of revenue that month.

17:51As the weeks passed by, the wall started to close in on Red Bull. His team leader started asking questions about why he wasn't generating enough new so-called clients, and then he threatened him with a beating. At this point, Andy consulted with me and the other editors at Wired. We decided that the safest thing was to stop the reporting process with Red Bull, at least until we knew he was safe. I told Red Bull, like, let's stop. We gotta stop. You gave me enough. Thank you. Let's just wait, and we'll speak again. when you are free and you're home, then we'll talk again. But when I said this to him, like that we're done with our reporting process, he immediately in that conversation said, well, then I need to get out of here now.

18:32I'm going to find a way to escape.

18:45For the full story of what happened to Red Bull and the crypto scam compound he was escaping from, you can head to Wired.com. We promise it's worth your time. Thank you for listening.

18:59This episode was produced by Adriana Tapia and Tyler Hill. It was edited by Kate Osborne. Amar Lal at Macrosound mixed this episode. Matt Giles and Daniel Roman fact-checked this episode. Mark Leda was our SF studio engineer. Pran Bandy was our NY studio engineer. Kate Osborne is our executive producer. and Katie Drummond is Wired's Global Editorial Director.

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