MENTOR, Ohio (WOIO) – A Mentor woman is one of thirty victims across more than a dozen states who was fooled by a sophisticated crypto scam.
She thought she was making big money on an investment, but she was scammed out of hundreds of thousands of dollars.
“It seems like almost every other day we have a scam coming in,” said Mentor Police Detective Rick Smith.
The 66 year old woman thought she was taking investment advice from a friend she’d met online.
She told police she started with an initial investment of $2,000.
In her statement to police she said “it went wild.” So she invested more.
But Detective Smith said the first mistake this victim made was taking financial advice from someone she’d never met in person.
“They were showing her these fake returns that she’s making so much money. Turned out to be a complete scam. But in the meantime she sent them over $400,000,” he said.
The victim said ‘When I tried to withdraw my funds, each time it blocked me. It told me to pay fees.’
The scammer asked for six-figure fees for her to get her own money.
Detective Smith says that’s a red flag you aren’t dealing with an honest crypto operation.
“None of these other companies would make somebody pay to get the money out,” he said.
The victim figured out what was happening and brought her transaction history and information to Mentor Police who painstakingly untangled the money laundering web.
“We started out with our victim and through backtracking we identified at least another 30 victims all across the United States that had been involved in this exact same scam,” said Detective Smith.
Smith ran across a stroke of luck and was able to trace the money from all of the victims back to two single crypto wallets. There was almost $9M of stolen funds.
And the money was still there.
Usually scammers launder the money quickly, spreading it out to make it harder to trace.
“They call that a peel chain and they’ll take $10,000 and deposit $1,000 and move the other $9,000 to a different address and they they’ll keep peeling that off until it’s all gone,” said Detective Smith.
Another stroke of luck in this case, is that all the victims’ money was converted to Tether which is one of the rare crypto currency operators that cooperates with investigators in scam cases.
“With Tether we were able to reach out to them and request the address get frozen and ultimately the FBI got a seizure warrant for that,” he said.
These victims will eventually get their money back, but it will take years.
The Mentor victim filed a police report more than a year ago and there’s no timeline on when the seized assets will get dispersed, and the victims made whole.
Detective Smith says if you’re a victim of a crypto scam, go to your local police and don’t take no for an answer if you are told it’s a civil matter.
“If they don’t have anybody in their department that investigates crypto they’ll reach out to somebody that does and we’ll assist them however we can,” said Detective Smith.
Report the scam as soon as possible because scammers move money fast. and come to police ready with transaction ids, wallet addresses and the date and time you sent the money.
Those critical details will help investigators begin tracing process.
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