Hello and welcome to another episode of The Know Your

Compliance podcast. I am excited to be having another

conversation. This is our first return guest, and I've brought

Mr. Chris Thompson back this time in his official capacity as

a senior investigator with the BC Securities Commission. So

Chris, welcome back.

Thank you. Good to be good to be back at my

kitchen table again, back at your kitchen table, talking

about all sorts of geeky compliance topics. I love it.

I'm also one of Greg's nerdy friends. It was like, I have all

my own gear. Let's use it. Okay.

And my editor loves it, really. Love Oh, awesome.

All right. I was being sarcastic. Oh, okay.

Like, really, I can't stand it.

No, I So today's topic is going to be pig

butcher, and we're going to, we'll delve into that in a

second. But let's, we kind of only touched last time on your

background. So let's, let's give people another couple of words

just to better understand who you are and why you're able to

speak to this topic. I think.

Yeah. So I got the thumbs up from work to talk

about this, because this is something we deal with, like all

day, every day, kind of thing. So I worked for the BC

Securities Commission. I've worked there since May of 2016

before that, I was a lawyer for a while. I did a few years of

tax law, which was pretty interesting. I did four months

of divorce law, which was the worst four months of my entire

life. And then long, long time ago, is also, also a financial

advisor. And one of the reasons I got into financial crime,

actually, was that one of our clients at the time in the in

the advisor space was, was someone who had been victimized

of about $120,000

okay?

And it was thinking, You know what, if

you're like, if you get mugged, or you get your wallet stolen,

like, as long you know, the bruises will heal and you can

kind of go about your life, but if you but if you get your

retirement funds stolen, you're hooked like that. Is a life

changing experience, a massive problem, sure, yeah. And so that

sort of got me interested in financial crime. And then I did,

I did an informational interview with someone that I met through

one of my mom's neighbors. My mom's neighbor worked in

financial crime. She put me in touch with someone who's an

investigator at the commission, okay? And it was, it was really

interesting. She said, like, look, we want people that are

interested in the industry. We want people that are that are

interested in and passionate about this type of thing, but

you just don't have the experience we need, either

accountants or lawyers. I was like, Well, okay, fair enough.

Thanks for your time. Went back to law school when I was 30, got

out worked in private practice for a while, realized it was

terrible. And, long story short, I went back to the I went to the

commission. Interesting opened up. So, yeah, so you kind of, I

didn't, I don't think I knew this, that you actually went

back to law school somewhat to possibly end up in in this kind

of a role, or at least with this in the back of your mind, as a

possibility that would exist as a result of that. Yeah. I mean,

I never, I didn't directly think, like, I'll take my law

degree to go to the commission, yeah, but my, my boss, at the

time, paid for me to go to these this, like, workplace

suitability consulting thing. Okay, so I did a bunch of tests.

They did this big report on me that said I should either be a

financial analyst, a university professor or a lawyer. And so,

financial analyst, I think it's all just voodoo. They just make

stuff up and throw against the wall. Quite no offense to

financial analysts out there. They've all turned off the show.

Now, talk to a university professor who's like, Don't

bother the competitions too much, and it's not really that

much fun. And then so law school it was. So I got into UBC law

and just kind of ran with it. That's fun. Yeah. So BC

Securities Commission,

maybe give us like a two second, 22nd whatever, what does? What

do they do? Like, I know, protecting the public is first

and foremost, but what does that look like? Give us a quick

version of that, and then we'll delve into pig veteran, sure. So

in general, we regulate the investment market in BC and in

Canada, investments are provincially regulated, so all

of the provinces have their own securities regulator. So there's

a few different aspects to what we do. There's the there's parts

of the BC Securities Commission that deal with companies raising

money, and not that they've done anything illegal. They're just

trying to get they're trying to raise funds via equity or debt

or whatever. We take people's prospectuses. We review the

prospectuses. We we don't draft the laws. That's parliament, but

we basically enforce them, and that's the enforcement. So

that's me. So the ninth floor, we're all but we're I call it

the Goon Squad, even though none of us look like goons, we're all

lawyers and accountants. You don't get a badge, though,

right? Yeah, some of us have badges, yeah, yeah. Some of us

are special provincial constables. We don't get guns,

so everyone asks like, No. And so enforcement, where I work is

generally a reactive division, because what happens is

complaints come into the commission, and if they're

enforcement related, they'll come down to enforcement, and

then we investigate them. Generally. How it works, I work

in the detection assessment and disruption team, so we do more

proactive steps. There's been a couple cases where we've either

found stuff online or kind of been contacted by friends, like,

I've had a couple friends of mine say, like, hey, is this a

scam? Right? Yes, if you have to ask me, I've never, I have not

yet in the eight and a half years I've been working with.

Commission, I have not found a case where someone has asked me,

Is this a scam? And the answer was no, that's awesome.

There's actually two. But one, I have a also 100% track record of

people asking me about stocks, and those stocks going to

effectively zero. Okay, so if you're asking me about stuff,

yeah, yeah, unless it's like, Chris, should I invest in index

funds. Yeah, that's probably a good plan.

I was gonna say, I Dare I ask, like, money in a

Vanguard fund.

I think I think you'll be okay, yeah, so do i

That's

all right, all right. So that's really cool. And then

so protecting the public kind of dealing with that incoming

information.

And then, I guess top turning to today's topic, where does pig

I was gonna make a bacon joke, which beat me to

it. There you go. Well, it's interesting. A lot of people

butchering fit into all of that? And let's, let's maybe start

haven't heard the term. I did a podcast on it a while ago for

with a definition, because it sounds really cool. I really

like bacon and pork chops, all right.

the International Association of financial crimes investigators,

and I told my wife, Anna, that I was going to do podcast on pig

butchering. She's like, What? Like, what do you mean? What? We

have lived together for over a decade. This is all what I do

all day, every day, and she didn't know what it was. It's

essentially luring investors into investing in fraudulent

schemes via online relationships. Okay, that's,

that's sort of kind of my definition of it, where it comes

from, where the actual term pig butchering comes from. It's a

Chinese phrase shazu pan, which literally translates to

something like killing pig plate. I didn't make up the

term. We didn't make up the term, but what it is, is the

process of, sort of fattening up a pig for slaughter. And we get

into it a little bit in more detail later. But really, you're

you get an initial investment from from a victim, through

whatever means, and then that, that initial investment looks

like it's growing. And then you, you can pay a little bit of

money out back to the investor to give them the idea that, hey,

this is a legit investment. There's real money there. And

then that induces the investor to put in more and more money,

which is sort of fatting The pig bit. And then when the when the

whole thing collapses, or they think they're not going to get

any more money from the person, that's the sort of slaughter

part, right? And so there that's, that's where the term

pig butchering comes from.

So there's often a layer of, like, a bit of a

pyramid scheme worked into there, potentially, like, if

there's some money going back to the investor, it's helpful to

have other money coming in. And,

yeah, yeah, I guess you could say that, yeah,

yeah, yeah.

Okay. So, So, generally speaking, fraud that

is over a long period of time that's kind of slowly growing

the amount and then getting to some sort of denouement, for

lack of a better word, where there's going to be a massive

amount of money taken at the end, kind of thing, or along the

way something. It's always along the way. The types of cases we

see are, for some reason, it's all it's 250 us. It's usually

the initial investment we see, okay, tons of those. And because

most people like, Oh, 250 bucks, even if this is a scam, I'm only

out 250 bucks. Pretty small, whatever, yeah.

$250 on some random investment platform, and

then it'll grow to 10,000 and they'll be like, Oh, this is,

this is awesome. Can I put some more money? And then they'll

put, oh, yeah, you can. You can go to tier two of whatever

investment program, if you invest, if you have $25,000

invested, so they'll send another 15 grand, right? And

then over time, they'll send, you know, a tramp, bank

transfers or crypto transfers of 1020, $50,000 until they've

invested however much money. I mean, we've seen anything up to,

I think my record is about 2.1 million. Whoa. Uh, yeah, that

was a that was a big one. And then when you try and get your

money out, that's when the fees start. It's like, okay, well,

you know, Mr. Dent, we were happy to process your withdrawal

of $100,000 but what you have to do this is, as you know, in

Canada, you have to pay tax, taxes 43.7% so you have to pay

us 43.7% of the of the gains before you can withdraw your

money, and then that's where the sort of Slaughtery bit part

starts, because someone's like, well, what? That's not how it

works. Well, no, I'm sorry. Like, that's the law. You have

to pay tax. You can't just not play tax. Mr. Dent. And then so

they get the tax, and there's another fee, and then there's a

wire transfer fee, and then the wire transfer gets stuck, and so

there's this unending series of fees, just as so the scammers

can get as much money via money out of you as they can. And then

at some point, the person's like, f this. This is a scam.

And then the scammers are like, okay, and then they stop

contact. But then the recovery room scammers start so what

happens is this, the initial scammers take your information.

Oh, Greg dent invested $280,000 Is on such and such dates, and

they'll send it to a different group of scammers who will call

you up and say, Mr. Dent, my name is Chris Thompson. I'm with

the blockchain association of of of North Kentucky, I don't know,

whatever. Yeah, sure, yeah. Or the UK. Now they'll make it

legitimate, though. I'm with the blockchain association of UK,

and he'll call you from a UK number which is, of course,

spoofed. Yeah, we've recently arrested the people at scam coin

Comm, and I understand you invested $280,000 so we rated a

call center. We've seized a bunch of Bitcoin, and we like to

get your money back. And the investors are like, Oh my god,

really. Well, this is amazing. Yeah. So what did he did? To do?

I need you to set up, set up a wallet at the such and such a

crypto company, and just send a link payment of 2.7% of the

value recovered. And then that'll confirm your account,

and then we'll send the money over, wow. And then, so then

there's darkies and what? Yeah. And it just keeps on going. That

is dark so

now you've, you've just given us a couple of

examples that we're mostly focused on crypto, yeah. And I

think, generally speaking, in my kind of loose knowledge, crypto

is a fairly frequent version of that. But this doesn't have to

be crypto, correct?

Yeah, yeah. We see a lot of bank transfers as

well. Okay, there's a kind of one or many money laundering

networks, I mean, or there's many money laundering networks

around the world, but we've seen kind of the same bank accounts

show up time and again in a number of in a number of these

cases. And so that's a term called Money mule. So a money

mule is someone who either intentionally or unintentionally

lets their bank account be used by nefarious parties. And so, I

mean, we've, we've done a few meal visits, there have been

press releases, and we've done news about this. So I can, I can

talk about it where we have a number of cases people invest in

scam coming.com it's, I mean, that's not an actual site. I

mean it, well, it is, but there's nothing there I looked

so I just say, we can continue to use that, whoever, whatever,

random owner of that can, I don't know. I'll buy it off you

if you have but so whoever's invested in scamcoin.com

sometimes they'll say, Yeah, send a wire transfer to such and

such a person, and it's like some company in Richmond or a

guy in Burnaby or whatever, right? And so we see those bank

transfers, and then we throw on a list, and we're like, you know

what? We're gonna go see this person. We'll talk to this

person, because they're a real human, yeah, in the Vancouver

area, yeah. And so we talked to a bunch of them, and now the

problem is, at least for Securities Act purposes, we

can't prosecute them for anything, because our provisions

require at least some level of knowledge of what's going on.

And in some cases, they just had no idea. Like there was, I

talked to one person who received like, $2,000 or

something like that. And she was like, Yeah, I make wigs, and I

sold a wig, and that was the payment. Like, Well, okay, and

it was just sort of this confluence of factors that

somehow a scammer needed a wig and directed the payment from

the victim to, like, the wig maker. And now the scammer has.

So somewhere around here, there's someone that's quasi

related to a scammer with a $2,000 wig.

Oh, weird. So like, the the actual commercial

transaction there, I don't know if that's the right market value

for a wig, but let's assume a wig is worth $2,000

that person literally did nothing wrong.

They just were selling their wares. Yeah? And now I don't

know if, I mean, I could say, like, yeah, maybe she should

check ID. But I don't know how many of us have sold something

on Craigslist and, like, No, dude, if you show up with the

amount of money, matches the ad and whatever, here's the widget.

Yeah, I just never, I just sold some tires off of Facebook

marketplace. Like, I took 300 bucks that. Like, I don't care,

I don't know. Yeah, right. Like, dusting cocaine off the head

bills as you give them to me, I'm kind of okay with it. Yeah?

So there's some of those situations where these people

are just completely unwitting mules, right? Then there's the

spectrum of sort of people in the middle where it's like, oh

yeah, I gave my passport to my buddy, and I guess I've never

seen this bank account, yeah?

Well, and I mean, if I like, if I can tie this back

to an episode, a previous episode of our show, there's

probably an element of human trafficking, where there's

people who are victims, whose accounts are being used for

money mulling purposes as well. Would be a, yeah, that's another

one the there's victims of the of the scams, and the scam

doesn't say, Okay, well, if you want to start making your money

back, oh, you can help us with with some of our money

transfers. And so victims of scams will allow their bank

accounts to be used to send money to and from another.

People get some of their money back, maybe, but, yeah, they'll

get, you know, 5% of each cut or something. And so, like the

banks are sort of aware to this, in that, you know, they have

their their fraud detection systems. And if there's large

amounts of wire transfers coming in and out, especially to and

from strange jurisdictions, I mean it, I have to keep in mind

that I only see like to me, it just seems obvious. But again,

the problem is I don't see everyone else's bank account. I

just see the bank accounts of people who are already. Dealing

with this mighty mule stuff. So I don't know how many bank

accounts are are out there that look like that for people that

aren't laundering money. So to me, it seems obvious. It's like,

Well, duh, there's these wire transfers, you know, in from

someone in, in, you know, the interior, and 30 seconds later

it goes out to shake pay, right, or binance or like, some Hong

Kong company, I'm like, what looks super sketchy like the

first time? Okay, maybe. But then when there's like, 10 in a

row, and you've got some 75 year old farmer who has $130,000 of

wire transfers going through his account in a month, like someone

should take a look at that. That seems like a Yeah. That seems

like transaction monitoring should have picked up on that as

a weird thing. I to me anyhow, isn't that Yeah. And, I mean, to

be fair to the banks, like, they'll, they'll fill out their

STRS, they'll send it off the fin track, sure. Yeah. And, and,

I mean, unless the bank wants to pump the client, which some of

them do, oh yeah, I've seen a number of cases where the banks

are led by, like, we're closing your account, like, sign our

dude, totally.

So that's that's interesting, and that's where we start to get

an intersection between what our company generally works in, in

that AML space, and pick what string. And that's kind of why I

wanted to have this conversation. Yeah, as a if I'm

a frontline real estate agent, if I'm a frontline mortgage

broker, for that matter, if I'm a compliance officer at any of

these things, where am I going to see that? What's that going

to look like? What should I be kind of thinking about, and,

yeah, trying to,

yeah, there's, I think, two things you want to

look at, transactions that are out of character based on the

banking history, and transactions that are out of

character based on the person, okay, so a lot of what we see on

these investments, I mean, I see them just from the pig

butchering context. So you know someone, and it's not usually

like you used to think it's a lot of old people getting

scammed out of stuff, yeah, because they're the one, they're

the only ones, ones that will actually answer a phone. But

it's not necessarily the case, like it's all ages, all races,

like everyone. It's a fairly wide spectrum.

Well, the crypto thing probably opened up a whole

new demographic of potential victims,

100% because old people don't understand crypto,

and they don't care. They're like, I'm not sending you

tether. I don't know what that is. What good? That's a good

answer. You don't understand it. Don't send 100,000 Yeah.

But if you, if you have, like, we had one case where I was

dealing with a money laundering network, and there was a guy who

was in his, like, mid 70s, and his eye like he looked like a

farmer, and there's $400 million of tether of usdt going through

his his crypto account in like two months. 400 million, yeah,

like hundreds of millions of dollars of usdt.

So for sorry for those of you listening. So tether usdt is

basically, it's called a stable coin where a company called

tether has said, okay, one US dollar, tether is worth the US

dollar. So they have a US dollar somewhere, and you're basically

just trading US dollars in a blockchain. Like, that's the

theory. So $400 million went through this guy's account, and

it's like, Okay, that should be kind of like a 76 year old. I

mean, maybe I'm stereotyping, but I don't know any 76 year old

guys that are going to have that kind of money running through

Well, I would say I can name a few of them, but I

their account.

can name almost all of the ones who would have financial

capacity to do that legally.

So yeah, that's true. And you're not going to

live in like some backwater Street in Cyprus or something,

right?

Like, these are names we know, yes, my point, yeah.

You know, they put the address on there. You

can look it up on Google Earth, and if it's like some dingy

second floor apartment, you're like, that's not, this doesn't

make sense. Yeah.

You can also look at it from the electronic perspective, like, we

have one case where I had a couple of accounts. I got some

crypto accounts out of some some residents of China, and there's

a bunch of crypto being laundered through them. So I

emailed the account owners, and they got back to me and he said,

like, Oh, I haven't I sold that account three years ago. Oh.

Like, what? Oh, yeah, no, China banned crypto, so someone in a

telegram group offered me some money for the account, and I

sold it. Oh, but dude, like, It's your name, like, It's your

name and address on the thing and, like, what? Like, okay,

whatever. But so, I mean, there's, like, there's some

knowledge there, or at least some some reckless disregard for

how life actually works.

Oh my gosh. So personal responsibility aside

and lack of personal automobiles, I'm still stuck.

And this is, this is always where our audience struggles, is

that's cool, and these are really fun, but I don't ever see

as a real estate agent, as a mortgage broker, I don't have

that financial that access to those accounts, right? And so I

think the the second thing you said, there, there's behaviors,

there's answers. That's where I think maybe we could, we could

help our audience a little bit more.

Yeah, so we've seen a few mortgage brokers

involved, not as much in pig butchering, but in some of these

investment frauds. And I can, I can sort of tie it in, because

it's. Underlying concepts, like a lot of not a lot. Some of the

cases that I've dealt with have had mortgage brokers involved

for a person to get a second mortgage on their place because

they want to invest in something. And if it comes to

me, it's probably a fraud, because it's falling apart. I

mean, in some of the cases, it's not, but let's assume it is.

If it's a pig butchering or online scam type fraud. A lot of

these investors are going to be coached on exactly what to say.

So they'll take out a second mortgage, and the people are

going to say, Okay, well, like, you know, what are you going to

use the money for? Right? And then that's where the scammers

will coach them. And they'll say, I would like to do X.

They're not going to say, I want to invest in an online

investment platform that I heard about two weeks ago from this

extremely attractive woman that DM me out of nowhere on

Instagram,

they'll say, I would like to buy some bitcoin to hold it in cold

storage. Okay, that'll be their story. And I'm like, Okay, well,

I guess that's sure if you want to invest in Bitcoin, that's how

it's gonna work. I mean, up until it on the blockchain, it's

for a time it's almost indistinguishable. That story is

almost indistinguishable from investing in a scan, just

because of the way the tracing looks.

And that's what they'll tell that's what they'll tell the

crypto companies too, because the the mortgage broker will

help them get a loan or get a second mortgage and get $100,000

right? That $100,000 gonna be a wire transfer to probably a

Canadian institution, a registered Canadian crypto

institution, like index. Shake pay, binance was in Canada for a

while, but they left. I'm trying to think of who else.

Shake pay is the only name. I actually, yeah,

shake pay index, there's another wealth simple,

oh, yeah, crypto and wealth simple, yeah, I think there's

about six exchanges that are registered in Canada, okay, and

they're, I mean, if they're registered in Canada, we know

who they are, they'll answer to us. We've got good working

relationships with all of them. They'll help us out if victims

contact them or contact us. And so I have no problems with any

of those, with any of the registered exchanges.

And so the mortgage brokers and sort of the front line staff

have to keep an eye out for this type of thing where someone's

taking a giant wire transfer and sending it to a crypto

institution, and if, if it's out of character for them, or if

it's out of character for the account, like if this person's

been investing in, you know, if they have a net worth of $5

million and they've been investing in Fly By Night

startups for the last 15 years, maybe not. Yeah, that's their

you want to buy 100,000 Dogecoin or whatever Trump tokens is

coming out. Like, I don't know what kind of crypto stuff fill

your boots, right? Yeah, but if you're a 76 year old grandmother

who has one GIC of $100,000 and you want to cash it out and send

a wire transfer 50 grand to somewhere that

that should flag something,

yeah, yeah, yeah. Well, and

so the mortgage broker, one you just gave us is

actually super helpful in that I can quite see somebody

approaching a mortgage broker to secure that second mortgage, not

having a particularly rational reason for doing so that's

interesting.

Yeah, that's a great example. And I mean, it's

even got to the point where there's sort of this evolution

of an arms race between the compliance people and the

scammers, because the compliance people will ask more and more

questions like, What do you plan on doing with this money for the

crypto exchange, for the crypto accounts, you have to fill out

this questionnaire when you open an account, like, what's your

intent with this money? How are you going to fund it? Is anyone

helping you fill out this form, right? And the scammers will be

on the phone with them, like, what they asked me. This is

anyone helping me? Oh, no. Okay, tell them no. Otherwise this

isn't going to work. Yeah. Okay. Then they say no, and then they

they have to lie through, through a lot of the form,

because the scammers know that if they tell the truth on any

part of it, their account is going to get rejected.

It's going to raise red flag, yeah.

And then we get a lot of complaints where it

said, you know, I sent a bunch of money to index, and the

scammers was on the they were on the they were on the phone with

me, and they told me to lie on all these things, and now my

money's gone like, Well, yeah. And the other thing I wanted to

mention, too, a lot of the times, victims won't know the

legal difference between a Canadian platform, like a

Canadian investment or crypto platform, and like the scam

coin.com because we get a lot of complaints where it's like, Hey,

I invested in in shake pay, right? Like, well, no, you sent

crypto to shake pay, and then your shake pay account forwarded

the crypto to the scammers. But the way the scammers set it up

is they're like, Okay, well, no, they may have pretended to be

with shake pay, or they may have have pretended that shake pay

was related to them or something. And so that's one of

the ways that the scammers get the victims trust, is they send

your money is actually going to a trusted, regulated Canadian

institution. Okay, so people trust shake pay. Yes, it's, you

know, and end acts are, well, simple, because they're

legitimate companies. They're registered. You can see they're

registered. And then the the victims have it in their mind

that their money went to shake pay, and that that's where the

trouble was, but it didn't. The money went to shake pay. And a

lot of the times, the scammers will use some remote desktop

software like any desk. And there's others, I just don't

know which one, any of them, off the top of my head, the money

will go shake pay. The scammers will will log on to the person's

shakepay account. Oh, and just say.

The money there, yeah, so the people don't know where they've

sent them.

Oh, there's been a few cases where I've had to basically walk

the victims through, okay, you have to contact, shake, pay, get

them to send them your send you their transaction history, send

that to me, and then I can trace your crypto and figure out where

it went.

Right, right. Fascinating. As a, as a, yeah?

Okay, no, that's fascinating. So I guess there's if, from a

serving our audience point of view, I think just just

generally asking questions and knowing your client and

understanding what doesn't doesn't make sense for your

client. And I mean, I hate to always come back to that,

because so many, so much of what we do in Financial Crimes really

is just like thinking about it, right? Like, if you're a

compliance officer, just thinking through the transaction

is, I don't know, some massive percent, and I could make up a

number of 95 but some massive percent of it is actually just

solved by thinking through and putting yourself in the person's

shoes. And does this make sense?

The other problem that you're going to run

into when you're talking to people who are victims, they're

not going to believe you, right? If they're at the point where

they're sending money to this online scam, they think it's

real, particularly large amounts, especially large

amounts of money, like especially when you've already

sent a large amount of money, because then you're essentially

having to admit that you've sent 75% of your net worth to

scammers in Cambodia or Laos or Myanmar, or wherever the case

is, right? And, I mean, that's the hardest part of my job, is

talking to people who don't realize it's a scam yet, like,

I've got one file right now where the son wrote in and say,

Hey, like, my dad sent a half million dollars to this scam. I

mean, they're, they're well off. This isn't, I don't think it's

life changing amounts of money, but it's a big chunk. It's, it's

like 2g wagons, amount of money.

And and I've been trying to talk to the dead. The only way I got

the dead to answer the phone is by spoofing the caller ID of the

scammer. Wow. So the son sent me. He's like, Yeah, this is the

scammers name. This is, this is Professor Shane, okay, whatever.

This is his phone number. And so I downloaded a tool onto my

phone, and the first one didn't work, and my money went to, God

knows, like, it's, it's sort of this gray area, of course. And

so I got one that did work, and then I punched the numbers in,

and he actually, he's like, Oh, hang on, hang on, hang on. Like,

he actually answer the phone since then, like, I told him

I'm, like, this is a scam. Or, how do you know it's a scam?

Like, dude, I do this all day, every day, literally. What i i

have another complaint about the thing you're investing in, the

guys, like, I can't get my money out. That to me, that's proof.

Well, that's not absolute proof. Like, it, it's, it's really

hard, yeah. And then I left him a bunch of messages, and then,

and one of the we have a kind of a handbook of dealing with

victims, okay? And one of it actually says, like, shake it up

a bit like, yell at the person. Swear at them. Like it might

snap them out of their snap them out of their, their stupor. And

so I, like, I left them a swear at them.

I was gonna say, Wait, as a government swear

people, this is amazing, and it's in the handbook.

It's I didn't I didn't swear it, I didn't yell

it. It was definitely like, hey man, like, I'm not gonna call

you again about this, because I've spent enough time, I spent

my own time and money trying to actually get you the answer the

phone. I want you to think long and hard about what you're gonna

say when you realize this is a scam and you have to admit to

your family that they were right and that how an RCMP officer

came to your door and told you it was a scam, how the bank

officials told you it was a scam, and how the BC Securities

Commission employee spent a ton of time in his own money to

spoof a caller ID of your scammer to get you to answer the

phone and you didn't, yeah, and so like, maybe That's gonna

switch something in his brain to, like, it's really hard.

So yeah, no, I've seen this. I've had somebody who

tried to convince me to invest in a crypto scam.

I know that case, that is one of my favorite

cases, for a number of reasons, but yeah,

and so we had, we had talked about that one, but yeah,

and he was absolutely, absolutely convinced. And I just

the numbers to me, just didn't make sense. There's a return,

and I think that's the

3% a week,

yeah, like, and I think that's the like as a look.

I think we've done a bit of where compliance nerds and

compliance officers and frontline staff can help. If

we're gonna have this episode out in the wild, I think we

could probably do a bit of public service as well on it,

which is to me, if it sounds too good to be true, uh huh, it

probably is. And just because you see on a screen or on an

email or a piece of paper that you're made so much money

doesn't mean you actually have Yeah, and I think, like, those

two things alone are probably, I don't know, is there more to

from a public service point of view, would be other things that

we'd want to make sure we Yeah,

I just wanted to mention something about the

screen, because that was a point I wanted to bring up. That's

what happens all the time. These websites, they're just hooked up

to a database that the scammers can manipulate, right? And they

just make whatever.

Terms they want. Also, for those of you that don't know, huge

really, in detail how they, excuse me, how the internet

works. What happens when you go to your banking web page, you

send your credentials to the bank, and then the bank sends a

bunch of data to your computer, and your computer that data

stores is stored sort of in RAM, and then that data gets

displayed on your computer, on your computer. On your computer

through a web browser, you can edit that data. So what the

scammers do when they go onto your computer, like any desk or

anything like that, they'll get you to log into online banking,

and then they'll do a bit of like, Hey, look at this other

thing while they monkey with the data, and they can edit what

your online banking is showing, or what your crypto account is

showing. Wow. And so I had a case where a lady told me she's

like, Yeah, I have $275,000 in my I think it was crypto.com or

something like that account. And what had happened was the

scammers had actually edited the HTML data on her computer to

show that balance. Oh, wow. And you had to, like, you would

refresh it, it would still stay there. You had to hard refresh,

like, Control f5 Yeah, to actually get the balance to

update to zero, and it was insane, like, the scammers are

just so good at manipulating data here and there, so You even

can't even really trust stuff you see on your own screen

sometimes.

Well, I mean, arguably, the mistake was made

earlier where they somebody let them have access to the computer

in the first place, which, from a, like, a security point of

view. I that, yeah, that would all like, I, you know, remote

desktop stuff is actually pretty, creates a pretty big

security vulnerability. Oh, sure, absolutely, yeah. And I

think that would be the other potentially. That's an

interesting, yeah, other public point of protection, I suppose,

sorry, I veered us off. We wanted to get back to

something.

Oh yeah, just, just kind of give it, well, no, it's,

it's, it's very topical. It's where, like, how are people

what? What can people do to protect themselves against pig

butchering, yeah, and then, and then, further to that, like,

what are the indicators that we should kind of, so I think we,

yeah, as you said, it's, if it's too good to

be true, it probably is. Yeah, right. And that's, that's the

key, really the key message. You can check if companies are

registered, that's a really good indicator. Like, if they're

registered in Canada, it means they, you know, they've, they've

sent us a bunch of documentation. We've, we've

reviewed all the documentation. There's people that will answer

our questions. They have certain capital levels, like, they're,

they're legit companies, right? Yeah. I mean, sometimes people

spoof those companies, but you know, you go to crypto.ca Well,

that's not crypto.com right? And maybe they forgot to register

crypto.net I don't know. So,

since we're doing the public service part of things,

investing in private companies, you mentioned that that's part

of your your job, your business, part of what BC securities does,

right? If somebody's going to be thinking about doing a private,

sort of private investment into some sort of a private company,

is there a way to check on on the legitimacy of that with you

guys? Or what's the, what's the

sort of, I mean, private companies, they're not

publicly reported companies. Anyone can start a company,

anyone can be directors on a company. You know, for better or

for worse, you can the best thing I can recommend is check

on our website to see or on in the internet, really, to see if

they've ever, if anyone in that company has ever been

sanctioned. Okay, we've had a few cases where we've had

people, we have victims, invest with people that had you googled

them, you would have found out some very sketchy things about

them, right? Okay, or done like a Cannely search. I mean, that's

a little bit that's a little bit more in the weeds, but if you're

investing 600 grand in something like you might want to get a

lawyer involved to do bit more in depth research. And there was

one canlead result where the guy, a judge, said, of this guy,

something like this man, is extremely adept in the world of

half truths and of obscuring answers, or something like that.

And so, like, I wouldn't have invested my 600 grand in that.

There's, there's a version of that can be said for

much of the venture room It's

usually not in a written court decision.

Well, that's fair, yeah. So that's, yeah, yeah.

One of the other things I wanted to mention too,

I think, in defense of pig butchering, I think a lot of the

people who fall victim to these scams are going to be vulnerable

for other reasons in their life, like they're going through

divorce, they've lost their job, they've they're kind of in a bad

place, and that seems to be common in a lot of the a lot of

the things we've seen, and I think a lot of the things that

make people vulnerable to bad relationships probably make them

vulnerable to pig butchering as well. So I think overall mental

health, like, I try and never judge their victims, because I'm

not in their shoes, right? Like, if, if their parents just died,

like, I don't know, maybe I'd fall victim to, you know, it's

like, if you think about it like this, a lot of these people have

been chatting online with some someone for months, yes, and if

you actually think, like, Okay, if I've been having this online,

Relationship with someone for weeks and weeks and weeks and

weeks, and they're, you know, they're funny and they're smart

and they're attractive and they actually care about me, I'd be

hard pressed to say I wouldn't at least be confident in that

person. I mean, I've got a good enough social circle, I've got

friends, I've got, you know, I'm healthy, I've got a decent job,

like, I wouldn't be more vulnerable to that type of

thing, whereas other people would. So I think maintaining

your friends and family's mental health and your own is probably

a good defense against this type of thing.

That's super helpful, and something I just pulled out

of that that I think applies to anybody who's frontline. And

this is, this is realtor. This is actually where a realtor

might see. This is if you've got a client who approaches you,

who's going through all sorts of other things in their life,

yeah, and they're about to divest themselves of what might

be their largest asset for what may not make sense? Yeah, that

would be an interesting indicator.

That is a massive red flag, right? Like,

yeah.

And it's not unusual for somebody who's going through

a divorce to need to sell their home. That part might make

sense, yeah. But if they're going through a divorce, selling

their home, and they don't have a good answer as to where

they're going to live with their kids, that should probably raise

some red flags. Yep. And so I think there's the that's a super

insightful piece. I'm glad you mentioned it, because I think

that's where frontline staff, again, might see some sort of an

indicator in their in their day to day interactions with with

their clients, yeah.

And if you know the person, it might make a

little bit easier to get a context. Like, I think

investment advisors are the best frontline defense against a lot

of the stuff, because you know your client. I mean, not it's in

theory, but I liken it to, like, my mom's financial advisor knows

a ton about her. She knows about me. I mean, full disclosure. I

worked for her for a while, so the relationship's a bit

different, but a lot of financial advisors should least

know. Like, do you have a kid? Are you married? Like, how are

things going? And if someone comes in and says, Okay, I'm

going to, yeah, my boyfriend needs help, a bit of help, so I

need 10 grand. Oh, interesting. Okay, well, tell me about your

boyfriend. What does he look like? Well, you know, here's all

the pictures of him. Oh, when did you meet him? Well, we

haven't met yet. There we go. There's a huge you know, he's,

he's on tour in Afghanistan. It's a bit of a dated example,

but whatever he's, he works on the oil industry. Yeah, like,

there's a lot of scenarios that come up and and where these

scammers can create these plausible sort of worlds, where

this person is overseas and they need money, and that all those

types of things. So those that's where a frontline worker who

knows a little bit about the person can say, like, well, this

is out of character, right for that person.

Or this doesn't match what else I know. This doesn't

match what else I'm telling I'm being told by this person. And

or,

yeah, yeah,

if I were in those shoes that would, that would

cause me to be of concern. Yeah, yeah. Interesting.

Or, like, hey, we had one case. It was us, I

think was a 76 year old guy that started talking about his

girlfriend, oh, yeah, from Instagram. And the girlfriend

from Instagram was like, a Nike model that someone had just

repurposed the picture of you. Like, yeah, it's good friend.

No, yeah, that's not your girlfriend, dude. That's someone

who's getting money from

you, yeah?

And sometimes they don't care. They're like,

so what? I get a ton of fun out of it. She's only got 10 grand

of my money. I got lots of money. I'm like,

Well, you can spend your money how you want, I

suppose,

funding North Korea. Like, I don't know what.

Maybe I don't know where the money

well, there's a scary thought,

yeah. I mean, some of it might go there, but

most of it like that's the other part that I wanted to mention,

too. Is what we're fighting here is not the the, you know, hacker

in someone's basement, or like the guy in rural Nigeria with a

cell phone, that sort of the stereotype from a while ago.

There are compounds, there are industries and organizations and

corporate machines behind this. There's, there's about a half a

million people in Southeast Asia in this industry. Wow, it is run

like giant organizations. They've got HR departments,

they've got it, they've got manuals, they've got scripts,

they've got, you know, ladders of escalation, like, there's a

group of people that have 50 Facebook accounts on their

screen at one time that are chatting to a number of people.

They'll take no they'll take notes, and someone else will

shift off and be able to talk to the victim as if they were the

same person, because they've got the notes from the previous

person. Wow. And then when the when the hook comes in and they

get passed to a second set of people who are good at, you

know, they're the closers, right? They're the ones that get

the money. There's dedicated groups of money launderers, like

it's, it's insane just how organized and and effective this

industry has become, and how much time and energy is spent

protecting it and maintaining it. So, like, this is what

people are up against. Like, this is a well oiled machine.

This is a full on company, just a gazillion of

them. Yeah, that's crazy.

A lot of it is oC Some of it's related to

government, government corruption, okay? Like, in

Myanmar, like, what's anyone going to do to Myanmar? Well,

clearly, I mean, China's tried, I think they sent the army into

one or something, but, but, yeah, like, it's, it's, I think

investor, education and and defense is, is probably our most

effective, our most effective weapon, unless we're going to,

like. I sent Jason Statham into a compounded meme, how to do his

thing like

but I think they've already made that movie at this point.

I watched on an airplane. Yeah, it's awesome and terrible at the

same time. If you want to watch Jason Statham murder scammers

for 92 minutes, watch the beekeeper, it's great. If you

like an intelligent, coherent plot, maybe not.

No, this has been helpful. I really, is there

anything we've we haven't touched on that you thought was

important, that our audience really needs to know before we

kind of wrap things up here?

Yeah. I mean, we've gone through a lot of it.

There's we've got the BCSC website crypto scams.ca. Is

actually a pretty cool website they've done to sort of spot the

signs of a crypto scam. Okay, investright.org? Is our investor

education site. You can go there. You can learn more about

it. If you have doubts, like, call us, right we I can hire one

of my co workers. Can go through and say, like, look, this looks

like a scam because of a, b and c, and just remember, almost

anything you can see on the internet is fake. We've had

cases where scam crypto recovery companies, they also make those

as a scam. Yeah, they'll just take your money and do nothing.

But they have had 300 positive trust pilot reviews. Wow, it's

all just, they just generate fake positive reviews. So it's

Remember, it's so hard to separate the signal from the

noise. Yeah, and a lot of these scams, but yeah, registration is

a key one. Too good to be true is probably the best bet, right?

It's too good to be true. It probably is

and and you can always call and get a get a

professional opinion if you're having doubts. But if you're

having doubts, you probably should reconsider before you get

too far down this path.

That's that's probably the best piece of

advice.

Well, Chris, thank you again for so much, for

sharing your knowledge, for taking the time for you always

bring like really cool, interesting perspectives, and I

have so much fun chatting with you. So thank you again for

coming on the show and really appreciate your input today.

No problem more than welcome.

All right.