Chinese criminal networks have been zeroing in on older Americans with cunning scams, according to lawmakers and experts. Both the House and Senate recently showed rare unity by holding a joint hearing to tackle this growing issue and protect American retirement savings from China’s aggressive maneuvers. It’s becoming increasingly clear that these scams not only threaten individuals but also have broader implications for U.S. national security.
During the hearing, Sen. Rick Scott (R-Fla.) didn’t mince words when he warned about the risks of having retirement investments tied to the Chinese Communist Party (CCP). He emphasized that such investments could be lost overnight due to the volatile nature of these foreign entities. This concern is magnified by ongoing violations of the Holding Foreign Companies Accountable Act, which was enacted during President Trump’s tenure.
Despite the law’s mandate, major Chinese companies like Alibaba, Baidu, and Yum China continue trading on U.S. exchanges without adhering to U.S. auditing standards. Rep. John Moolenaar (R-Mich.) voiced his worries about the CCP’s deliberate infiltration of American markets, which he believes is much more than a mere investment risk. He cited the collapse of stock prices in China’s private education sector as a wake-up call for U.S. investors.
Sen. Kirsten Gillibrand (D-N.Y.) brought attention to the rise of sophisticated scams, often referred to as “pig butchering,” targeting older Americans. These scams involve luring victims into what seems like legitimate investment opportunities, only for the scammer to vanish with their money. The FBI reported that Americans aged 60 and over lost over $3.4 billion to such scams in 2023 alone.
Many scammers pretend to be family members or friends in urgent need or use fake identities to build romantic relationships with their targets. Rep. Raja Krishnamoorthi (D-Ill.) shared alarming examples of Chinese gangs in Southeast Asia pulling off cyber scams generating billions annually. He stressed that this is not just a financial issue but also a national security and human rights concern.
Brady Finta, a former FBI agent, testified on the challenges of tracking these criminal networks. He pointed out the lack of international cooperation and resources that hampers effective prosecution. Finta noted that only a small fraction of elder fraud victims report these crimes, yet the volume of complaints remains overwhelming.
Entrepreneur Kevin O’Leary also testified, highlighting the lack of reciprocity in economic relations between the U.S. and China. He criticized the CCP for not adhering to World Trade Organization rules and raised concerns over “golden shares” that give the CCP undue influence in companies. O’Leary specifically called out TikTok, labeling it as “weapons-grade spyware.”
In January, O’Leary made headlines by offering $20 billion in cash to buy TikTok, underlining the app’s contentious role in U.S. national security. The future of TikTok remains uncertain, with President Trump extending a deadline for its parent company, ByteDance, to divest. Trump has hinted at using tariffs as leverage in negotiations with China over TikTok.
The hearing also scrutinized Wall Street’s role in enabling China’s financial strategies against the U.S. Chris Iacovella, CEO of the American Securities Association, criticized Wall Street for marketing Chinese companies to American investors. He pointed out that the profits from these offerings often go back to China, leaving U.S. investors and national security at risk.
Iacovella highlighted a loophole allowing Chinese companies to be included in passive index funds, which further embeds them into U.S. financial systems. This practice underscores the complicated entanglement between American finance and Chinese interests. The hearings made it clear that addressing these issues requires more than just regulatory tweaks; it demands a comprehensive reevaluation of U.S.-China financial relations.
As lawmakers and experts continue to grapple with these challenges, the focus remains on safeguarding American interests from foreign exploitation. The hearing served as a platform for uniting divergent political voices in the face of a common threat. While solutions may not be immediate, the discussions sparked by the hearing are a step toward greater awareness and action.
