Washington, D.C. – Cunwen Zhu, a California resident, has been slapped with a hefty penalty and permanent trading ban after being found liable for a sophisticated “pig butchering” or romance fraud scheme. The U.S. District Court for the Central District of California issued a default judgment on December 7, finding Zhu and his company, Justby International Auctions, responsible for defrauding customers out of over $1.3 million.
According to the Commodity Futures Trading Commission (CFTC), Zhu and Justby acted as “money mules” within a larger fraud network, cultivating relationships with victims and then convincing them to invest in digital asset and forex trading. From April 2021 to March 2022, they misappropriated approximately $1,352,843 from around 29 customers. The funds were not used for legitimate trading, but instead diverted for personal use and transferred to accounts controlled by other members of the criminal enterprise. Customers were provided with fabricated trade records to maintain the illusion of active investment.
This case marks the CFTC’s first judgment specifically targeting fraud related to “pig butchering” or romance scams. The court order permanently bans Zhu and Justby from trading on any CFTC-regulated markets and from registering with the agency. Zhu is also required to pay a $4,000,000 civil monetary penalty and $1,352,843 in restitution to the victims.
In addition to the CFTC’s civil enforcement action, Zhu faces criminal charges. On April 19, he was charged with one count of wire fraud in the Middle District of Florida (United States of America v. Cunwen Zhu, Case No. 3:23-cr-66-BDJMCR) for similar conduct.
The CFTC reminds potential investors that recovering funds obtained through fraud is not guaranteed, as wrongdoers may lack sufficient assets. The agency remains committed to protecting customers and holding perpetrators accountable.
Source: CFTC.gov
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