A fraud ring has swindled HK$360 million (US$46 million) from men across Asia using deepfake technology to create convincing online personas—Hong Kong police revealed after arresting 27 suspects tied to the operation, proving the growing intersection of organized crime and cutting-edge technology.

The Pig-butchering Scheme

Operating from a 4,000-square-foot facility in Hung Hom, Hong Kong, the syndicate used advanced artificial intelligence (AI) tools to generate attractive female personas. Scammers reached out to victims on social media, gradually building emotional ties before introducing investment schemes in cryptocurrency.

“They got in touch with the victims on social media, and sent them photos generated by AI, shaping a character who had a very appealing appearance,” said Fang Chi-kin, Senior Superintendent of the New Territories South regional crime unit.

The scam escalated when victims requested video calls to verify the identity of these online personas. “This technology transformed the scammers’ appearances and voices into highly attractive females in terms of looks, attire, and speech, making the victims trust them unquestioningly,” explained Iu Wing-kan, Superintendent of the same unit. This method is known as “pig-butchering.”

Emotionally invested victims are then encouraged to “invest” in fake cryptocurrency platforms, showing fabricated profit records to maintain the illusion of success. Victims only will then realize they were being conned when attempts to withdraw funds from these platforms were blocked. The fraudsters, however, had already siphoned off millions by then.

The arrests include university graduates recruited for their technical skills to manage fake trading platforms and handle digital marketing for scams. Five of the 27 individuals arrested have suspected ties to the Sun Yee On triad, one of Hong Kong’s most notorious organized crime groups.

In the raid, authorities seized over 100 mobile phones, HK$200,000 (around $25,728) in cash, and luxury watches. The syndicate had also maintained detailed training documents to instruct members on how to manipulate their victims.

The New Frontier in Cyber Fraud

From identity theft to impersonating company executives, deep fake fraud is rising rapidly. In 2023 alone, there was a 3,000% increase in global fraud attempts, fueled by the growing availability of generative AI tools. A recent United Nations report also specified a rapid growth of cyber-enabled fraud in Southeast Asia, driven by the same technology.

The Hong Kong case is just one example of this spread. Law enforcement agencies, such as Europol, have been sounding the alarm, urging businesses and individuals to adopt AI-based fraud detection systems to combat this new threat. Reality Defender, a leader in fraud detection, reports that many institutions are now integrating AI tools specifically designed to detect deepfakes, though the speed at which these scams are evolving remains a significant challenge.

With this case as a cautionary example, authorities stress the importance of vigilance as these technologies evolve and become more accessible to criminals.