Bitcoin scams claim $50K
Jan. 25—TRAVERSE CITY — Scams are back in a new form.
Last week, two women were scammed out of $53,100 on separate occasions in Grand Traverse County, according to sheriff's Lt. Brandon Brinks.
"They're always changing," he said. "There's no question that it's a scam."
The first incident happened Jan. 17 when a sheriff's deputy was taking his break at a gas station with a Bitcoin kiosk at the intersection of Cass and South Airport roads.
A gas station employee asked the deputy to check on a woman feeding large sums of money into the kiosk. This situation has become more common in recent months, the employee said.
The deputy realized when speaking to the 57-year-old Garfield Township woman that she was on the phone with the alleged scammer. According to police reports, the scammer was telling the woman how to deposit $4,500 into the Bitcoin machine so it could be transferred to them.
The woman handed the phone to the deputy, and the scammer hung up once they realized they were talking to a member of law enforcement. She thought that the scammer was a representative from the PayPal fraud department.
She received an email earlier that day to call them immediately because there was too much money in her account, Brinks said.
"They play on fear, urgency and the sensation that you just can't hang up," Brinks explained.
Two days later, another Garfield Township woman, 65, received a similar email from someone also claiming to be from the PayPal fraud department.
The email said to call them right away. So, she did.
Once she was on the phone with the alleged scammer, they told her that she had fraudulently obtained too much money in her account and needed to pay it back or else face criminal charges.
Police reports indicate that she then went to her bank and withdrew $51,000 in cash. Brinks said the bank teller questioned her and asked why she was taking out so much money, but the woman was told by the scammer to lie.
With the money in hand, she went to a Bitcoin kiosk in the county and tried to deposit all of the money. She was only able to transfer $48,600, because the machine would not accept the remaining bills.
Even though investigations took place in both cases, the money is unrecoverable, Brinks said.
Brinks said Bitcoin does not assist law enforcement in getting the money back. Both women sent the money to untraceable accounts, something he said that is common amongst cryptocurrency users.
"Most victims have never done anything wrong in their lives," Brinks said. "So when someone tells them that they're in trouble, they feel the need to act right away out of fear."
These two cases follow a larger trend of fraud and scam investigations that have plagued the county during the past year. Brinks said the best way to avoid being scammed is to never give any banking or personal information over the phone or email, without verifying the business first.
"If someone is asking for money immediately, and not allowing you to hang up the phone, then it's probably a scam," he explained.
Fraud cases are one of the six that county residents can now report to the sheriff's office online through their website. But, in these cases, Brinks said the dollar amount prompted their office to send deputies and detectives to the scene.
The new online reporting system will online look at fraud complaints under $1,000 in losses, or that have no known suspects, he said.
In the next couple of months, Brinks said he plans on organizing more scam awareness classes in the community. After these two cases, the classes will also include information on potential Bitcoin scams.
