The Expert Podcast

So we have another example of the type of fraud cases that happen with Bitcoin, cryptocurrency, and other types of scams that many victims fall into because of the fact there may seem like there's credibility. In this case, the victim was contacted by a scammer that referenced many colleagues from their past. They said, "Look, I used to work with you and Joe Schmoe here in this company in Oklahoma. Remember when you went to college with this person?" And they'll drop names of people that you know or have worked with or do work with, and even companies you used to work at, and start that conversation going.

At some point, after many days, weeks, sometimes months, they'll bring up the fact that there's an investment opportunity. And the fact that they started out with this credibility might give you a false sense of security. Well, what's happening is they're looking you up on LinkedIn, on your social media, maybe even some commercial databases to find where you used to work, who your colleagues are, who your co-workers are, who your relatives are — and they use this information to paint themselves as somebody who knows about you or was referred to you. That will open the door for them to do an investment.

Initially, they're not going to tell you, "Hey, invest money in this company." What they're going to do as part of that conversation is tell you that they made money in this investment. It might just be a casual thing. They might say, "Oh, congratulate me because I just made twenty thousand dollars on this cryptocurrency deal." Or they might send you a social media picture of them eating out at a fancy restaurant or on vacation on a tropical island and say, "Congratulate me, I just made 50 grand on this deal." They're setting the bait. They're waiting for you to ask, "Wait, what deal did you make 50 grand on?"

They'll even try to play hard to get: "Oh, just some deal, don't worry about it." And they'll get you to beg it out of them — what the deal is. Eventually, once they kind of set the hook and start reeling you in like a fish, they'll say, "Well, it's this deal through this company that does Bitcoin or cryptocurrency." You might ask, "Well, how can I get in there?" and they'll say, "I don't know if you can. It was just something I came up with." They're going to play very hard to get — to get you to beg your way into this deal.

Initially, they're going to ask you for a small amount of money — five grand, two grand, eight grand, whatever it is — and you're going to send some money to them. A relatively small amount. Doesn't matter what the amount is initially. Right away, they're going to send you an account statement showing that you made all this money. If you send them six thousand dollars, they'll send you a statement that says, "Hey, your account was at 10 grand after a month," right? Maybe another statement shows two thousand more the next month.

You'll ask, "How can I send you more money?" Then you'll invest even more. Invest even more. They'll keep taking money from you until you get to the point where you ask for a redemption or a withdrawal. "Hey, can I take some money out?" "Yeah, you can take some money out, but you have to pay taxes, an audit fee, broker fee, whatever it is," and they’ll ask you to send more money in.

This is about the time you might start to realize that it's a scam. That's when victims kind of wise up and realize they lost money. And then that's when they contact us about an asset investigation or recovery investigation.

But the thing to watch out for is somebody who you don't know that mentions maybe colleagues or co-workers from your past as a way to get you involved with the conversation. Initially, it may not sound like they're looking for anything. They're not asking you for money right away. But as soon as they do ask you for money, think back in that conversation and ask yourself — who are they talking about? Who are they? Who did they mention? They mentioned Joe Schmoe or Sally or whoever from your past. Did they really know them? Or did they just look it up somewhere online? Did they find it in your social media? Did they find it in your college yearbook? Did they find it in wedding announcements for you? Funeral announcements?

So this is a very common scenario, and we've seen clients that lost millions of dollars in these types of cases. So protect yourself from sending money. And as always, anytime you send somebody money, make sure you know where the actual money is held — that you can verify with a third party — not just a statement that somebody makes up on a laser printer or on some type of graphics program. They didn’t photoshop your results.

The other thing you can do to test an investment: if you send a small amount and you're at all concerned, ask for a redemption. Ask for money back. If you get any kind of pushback for getting money back — you know it's a scam.