Google slaps Chinese developers with lawsuit in New York for conducting ‘pig-butchering’ scams via its Play Store

Google accused Yunfeng Sun in Shenzhen and Hongnam Cheung in Hong Kong of defrauding about 100,000 users through fake cryptocurrency investment apps
The tech giant said the two individuals uploaded 87 bogus apps on the Google Play Store to target users in the US and Canada

Google

Xinmei Shen

Published: 10:30pm, 5 Apr 2024

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US technology giant Google has slapped two Chinese developers with a lawsuit in New York federal court, accusing them of defrauding about 100,000 people through fake cryptocurrency investment apps on the company’s Play Store.

According to the Google lawsuit that was filed on Thursday, Yunfeng Sun in Shenzhen and Hongnam Cheung in Hong Kong ran what is known as a “pig-butchering” scam since 2019 that involved uploading 87 bogus apps – purported to be cryptocurrency exchanges and other investment platforms – on Play Store to ensnare unwitting users in the US and Canada.

The fraudsters’ scheme also involved initially developing a friendship or romantic relationship with the victims, and then persuading them to make investments through the apps they operate, the lawsuit said.

The fraudulent apps ran by the two Chinese developers “affected consumers across the globe” and resulted in “substantial financial losses” to Google users, the US tech giant said in its lawsuit.

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While Google had made efforts to remove those apps, the company said the two defendants managed to create more apps using “new aliases and infrastructure”, and by making “repeated material misrepresentations” regarding their identity and activities.

Google’s lawsuit shows the continued rise of pig-butchering scams around the world, which have duped tens of thousands of victims into making fraudulent investments online.

After victims make several cryptocurrency investments through fake sites, they discover that any request to make a withdrawal or cash out their investment is denied, according to a recent FBI warning in the US. The scammers even request additional investments, taxes or fees for the victims to obtain their money. Once the victims’ funds are exhausted, the scammer cuts off contact and vanishes with the money.

In Asia, these fraudsters have became more prevalent since the Covid-19 pandemic. A large number of scammer from mainland China, for example, operate out of compounds in Southeast Asia and try to swindle people worldwide with fake investment schemes.

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Google claimed in its lawsuit that the two Chinese app developers would send “wayward” text messages to victims as a way to “strike up a conversation”. After exchanging initial messages with the victims, the defendants “shifted the conversations to other messaging platforms such as WhatsApp”.

They would also publish videos online that promoted the fraudulent investment apps, according to the lawsuit. After victims deposited money into the apps that purported to offer high returns, these bogus platforms would prevent them from withdrawing money through various schemes.

Sun and Cheung’s apps, including one named TionRT that passed itself off as a cryptocurrency exchange, caused financial losses that ranged from US$100 to tens of thousands of dollars per individual victim, Google said.

Google also alleged that it “suffered economic damages” of more than US$75,000 in investigating their scheme, according to the lawsuit.

Beijing has recently ramped up its crackdown on pig-butchering operations in Asia. In 2023, Myanmar authorities handed more than 44,000 suspected online scammers to their Chinese counterparts in a joint law-enforcement action, China’s state broadcaster CCTV said in a report in January.

Another 807 suspects were arrested in Myanmar last month, including 455 Burmese nationals and 354 Chinese nationals, the state-run Xinhua news agency reported earlier this month.