DES MOINES — U.S. Representative Zach Nunn (IA-03) today introduced bipartisan legislation to help crack down on financial scams, particularly “pig butchering” scams, against retirees. The Empowering Law Enforcement to Combat Financial Fraud Act, which is co-led by U.S. Representatives Josh Gottheimer (NJ-05) and Scott Fitzgerald (WI-05), will support law enforcement investigations into scams against retirees.
“Scammers prey on Iowa retirees and steal their hard-earned money. Just last year, the Iowa Attorney General’s office received more than 13,000 financial fraud reports resulting in approximately $42.6 million in financial losses,” said Rep. Nunn. “Iowa retirees shouldn’t have to worry about fraudsters. And if they are scammed, law enforcement should have the tools needed to bring their case to justice.”
Bad actors are leveraging technology at an alarming pace to orchestrate new scams, inflicting harm on a growing number of vulnerable and elderly Americans. Alarmingly, older adults are bearing the brunt of these scams, suffering significantly higher financial losses. In 2021, the median loss for individuals over 70 was a staggering $9,000, compared to $2,400 across all age groups.
“Fraudsters are using every trick in the book — social media, email, and phone — to swindle Americans out of billions of dollars every year. We need Twenty-First century tools to crack down on the criminals behind these scams,” said Rep. Gottheimer. “My new bipartisan bill, the Empowering Law Enforcement to Combat Financial Fraud Act, which I’m co-leading with Congressman Zach Nunn, will ensure that law enforcement can access cutting-edge technologies to stop online scams and keep our communities safe.”
A common scam is known as “pig butchering.” A “pig butchering” scam is a type of financial fraud in which scammers target individuals, commonly retirees, to convince them to invest money in a fake opportunity. The term “pig butchering” refers to the process of “fattening up” a victim with false promises before “butchering” them by stealing their invested funds. In 2022, these scams have resulted in reported losses of more than $1 billion. It has gotten so bad that the American Association of Retired Persons (AARP) has published an explicit warning telling Americans over 50 to watch out for criminals trying to trick them out of their hard-earned savings.
“Financial fraud crimes increasingly involve sophisticated technology to scam Americans out of their hard-earned dollars,” said Rep. Fitzgerald. “I am proud to co-lead the Empowering Law Enforcement to Combat Financial Fraud Act which will give state and local law enforcement the resources they need to utilize blockchain to track criminals who attempt to defraud Wisconsin seniors and families.”
Law enforcement and national security agencies have a crucial advantage against these criminals: blockchain technology’s permanence and transparency. Officers can utilize blockchain technology to stop these criminals in their tracks. In November, the U.S. Department of Justice, using blockchain, froze approximately $225 million linked to an international human trafficking syndicate in Southeast Asia responsible for “pig butchering” scams. Additionally, 3,500 cybercriminals associated with online scamming were arrested by authorities during a South a South Korea-led Interpol operation in late 2023. The authorities also sized $300 million in stolen funds.
Unfortunately, state and local officers are overwhelmed with these crimes that often do not reach the threshold to warrant federal intervention. While federal agencies are trained in blockchain tracing skills, many states have limited staff with the ability to help these victims. This leads to many crimes going unsolved.
The bipartisan Empowering Law Enforcement to Combat Financial Fraud Act will allow state and local law enforcement to use eligible federal grant funding to investigate financial fraud and “pig butchering” scams against retirees. It will also permit federal law enforcement to assist state and local law enforcement with tracing tools for blockchain technology.
The bipartisan Empowering Law Enforcement to Combat Financial Fraud Act is supported by AARP, the Financial Technology Association, the REACT Task Force, the Digital Chamber, the Iowa State Police Association, and the National State Police Association.
Text of the bill can be found here.
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