Iowan says he was robbed of $232,000 in cryptocurrency-romance scam

The alleged theft occurred through an increasingly common scheme known as a “pig butchering.” In this sort of scam, victims are befriended by online perpetrators, then gradually “fattened” for financial slaughter. The victims are tricked into making investments though a website that mimics a legitimate cryptocurrency exchange.

Such scams are alleged to be responsible for more than $2 billion in losses incurred during 2022 alone.

In a newly filed federal lawsuit, Brian Hoop of Fort Dodge alleges that in September 2022, he received a text message on his cell phone from an unfamiliar phone number. The sender of the text introduced herself as “Emma” and indicated the text was intended for someone else.

Over the next six months, Hoop and “Emma” continued to text daily and eventually exchanged intimate messages and photos, with Hoop treating her as his girlfriend. Three months into their virtual relationship, in December 2022, “Emma” told Hoop she created substantial income for herself through carefully timed trades in cryptocurrencies and volunteered to assist Hoop in executing his own trades on what appeared to be a legitimate cryptocurrency exchange called Energise Trade.

Over the next several weeks, Hoop liquidated his retirement and savings accounts, borrowed money from a bank and from his mother, and ultimately delivered $232,793 to Energise Trade, believing his investment had resulted in $1.1 million in returns.

When he attempted to access those funds, he was asked to pay an additional $100,000 as payment of taxes. After he refused, “Emma” attempted to extort money from Hoop by threatening to expose his intimate conversations and photographs to others, and by threatening his safety and that of his family. The lawsuit alleges “Emma” specifically claimed to have hired agents who would ambush him, torture him and harvest his organs to be sold on the black market.

The lawsuit accuses the individual known only as “Emma” and 20 “John Does,” all believed to reside in China, with conversion, racketeering, conspiracy, unauthorized disclosure of intimate images, and negligent infliction of emotional distress. Also named as a defendant is a Delaware corporation named MEXC Global, which allegedly controls the accounts into which Hoop’s money was deposited.

The defendants’ actions, the lawsuit claims, are “not isolated events and are part of a widespread scheme to defraud other unsuspecting victims for the same or similar purposes and to achieve the same or similar results.”

The lawsuit seeks actual damages of at least $232,793; trebled damages, as allowed under federal law, of $698,378; statutory damages, as allowed under state law, of $10,000; punitive damages of at least $931,171; plus attorneys’ fees.

The defendants have yet to file a response to the lawsuit.

In March, the Federal Bureau of Investigation warned consumers of a huge spike in pig-butchering scams that are based on cryptocurrency exchanges. The bureau said the perpetrators were using fictitious identities to develop relationships with victims, often targeting people through dating apps, social media platforms, professional networking sites or encrypted messaging apps. Newer iterations of the scheme include so-called “liquidity mining” and “play-to-earn” games, according to the FBI.

In February, the Federal Trade Commission said that in 2022, nearly 70,000 people had reported being victimized in various romance scams, with their collective losses totaling $1.3 billion.