The crypto-scam--and why you need to look out for your elders...

Greetings and salutations, and have you checked on your parents lately?

Today's blog will be short and sweet. While there is much to discuss in the world of spy games, the war in Ukraine, narcotics trafficking and the like, a very troubling trend keeps landing on the desk of this detective, and once again the victims are the 65-and-up category.

As in (if you are middle-aged, as am I) our parents.

Here it should be said that this is not the standard social-engineering fake-relative scam. That one does go on, but in a sense it is far more low-level. What I and others have been increasingly seeing are very well-played out grifts targeting recent retirees who just happen to have real savings and real business experience--and yes, this lies in crypto, and yes, it is quite easy to fall for.

The game goes roughly as follows: an "older type" is approached by what appears to be a legitimate company offering crypto currency, possibly promising huge gains in value or as a hedge a la buying gold, etc. In fact, there are endless supposed regions (including the avoidance of actual... banks) and these can be summed up, twisted, listed and generally made overwhelmingly convincing by smart grifter in the "trade."

And in a strange way (and I've heard this again and again) buying crypto seems... simpler. No need to watch the stock markets. No need to wonder if tomorrow that 401K tanks. If you buy into that (into the arguments, I mean), crypto currency can be made to seem ultra secure and far less susceptible to market trends.

Now skipping over whether or not you or I believe in the above, trust me, there are plenty who become convinced. Typically, the method is as follows:

• The victim may be approached by a cold call or cold mail. While this would seem to be a lost cause (cold-calling certainly is not easy), both are followed up with impressive case studies and bolstered by websites and customer recs. A flip-side is that (with a bit of investment and even viral engineering) websites may be made to appear in front of the right kind of victim's eyes. This is quite similar to the guitar-sale scam I noted in a recent post. I'm a guitar player, for example, and I often look for deals. Like magic bogus but quite convincing sites many pages deep have appeared on my social media feeds.
• That said, what is key is actual person-to-person contact. Either at the very beginning of the process--through a cold call--or through responses to contact forms on what are actually bogus websites or links in emails, the target will be contacted by a live and extremely well-versed crypto currency expert. Put simply, these are not primitive scams (a la the infamous Nigerian groups). The salesman who contacts the target will be nothing short wildly up-to-date but he (typically it's a male) will be erudite, and (at least in my experience) he will boast a British accent. This contact is in fact key to the scam. The older generation prefers person-to-person contact and... simplicity. (Hence why so many over-65s actually still prefer to visit banks, stand in line, deal with tellers, etc.
• What is also important here is that the person contacting the target is not doing things half-way. He often will have a bogus social media history (on sites such as Linkedin). A google search will likely reveal his name in various investments on sites that are often also well-developed. This fake history will quite easily fool the layman or laywoman eager to do something with his money. [Ed. note--there are the odd fraudulent investment scams or "rebounding con" scam in which a person who actually worked in a bank or in the financial sector will attempt to approach investors in crypto. Here Yours Truly can make the small boast of recently defeating two such... high risk investments in that the real history of two different individuals revealed convictions for fraud (here US court documents are your friend). Yet this is a different game, and in one case I suspect that yes, this was a fraudster attempting to actually go straight, but hey, we are here to find red flags, and red flags we do find).]

And fooled they will be. The reality is that 1) even legit crypto is still risky 2) even legit crypto is still controversial (at least as far as tax offices and banks go, and it may greatly complicate annual tax returns and 3) but while there is real, established crypto... and there are pyramid schemes and then plenty of schemes that are simply well-planned theft. Doubters should check out the history of "crypto-crash king" Do Kwon or that of the infamous or the likely long-ago murdered crypto-queen Ruja Ignatova (but hey, the FBI is still offering USD 5 mln for her arrest), both of which I have covered in depth in The Corners. 

The final reality, however, is that, in many cases, once that money is gone... it's gone.

Now yes, there is always hope. And yes, I and plenty of other investigators have worked on cases that in the end resulted in charges against proven scammers. But getting charges filed on the bona-fide scammer (which is plenty difficult, as finding, identifying and proving such a case is often a challenge that necessitates cooperation between various jurisdictions, various intel outfits, lawyers, etc.) is one thing. But getting the money back?

That is quite something else.

The truth is that courts do not get your money back. Courts may jail the criminal. Courts may hand down penalties and verdicts that demand repayment, but generally speaking... the buck stops there in that victims will need to likely turn to vindicator- and detective-types, and then the process may start all over in the form of... new filings or in a best-case scenario a short-and-sweet deal in which a perpetrator agrees to pay back a portion of the cash in order to make further litigation vanish.

I can personally say that we have been successful in the past on that end...

BUT...

(And there is always a pretty big "but"...)

Each time this has happened, the "victim" has been a wealthy individual or firm with money to burn. Investigations, criminal filings, civil litigation and asset seizures have been thus enabled by... wealth and a desire for revenge.

Put simply, the typical "civilian" who has seen his or her savings bilked just does not fall into that category. Once such a victim is burned, he or she likely has neither the means nor the will to try to get anything back.

Which brings us back to the key to stopping all of the above, this being prevention. This likes in understanding why a parent or grandparent may decide to buy into crypto in the first place.

This essentially gets back to the human element--something that I believe crypto fraudsters know well. Again and again the target is widow or widower who is well-off, but also arguably lonely and... bored. These days people live longer. A pensioner approaching 70 may not only be alert but also in dire need of a hobby. And he or she also may raise his or her hackles when being given advice. After all, they did pretty well in life, and money was always a private matter (and if they have a number of children and potential heirs, they very well may want to keep it this way). In fact, family members may have a more difficult time dealing with this than an outside and evil voice.

That said, if you have ageing and well-off parents, it pays to take the initiative. Speak with them (in general) and also try to  speak with them about any ideas over "investments." If grandma wants to invest in crypto, warn them about current realities or, even better, guide grandma to a bona-fide crypto broker or platform (and yes, you may have to do a bit of careful research here yourself).

Which all means... look out for them.

Better to deal with the ornery matriarch or patriarch now than have to literally pay their rent later.

Preston Smith is a licensed investigator based in Gdansk, Poland. He can be reached at query@cddi.pl.