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Crypto fraud is becoming increasingly widespread, with enthusiastic elderly individuals who have limited knowledge of cryptocurrencies being the main targets. This week, 82-year-old artist Richard Hall from Houston became a victim of a crypto scam and urged others to be cautious. A scammer posing as an agent of the United States Federal Trade Commission convinced Hall to transfer his lifelong savings.
Crypto Fraud
Given the limited understanding of crypto and technology, which is often considered a common issue among the elderly, Richard Hall became an ideal target for a crypto scam.
The scam operation began in March when Hall received a phone call from someone claiming to be Alan Lee from the Federal Trade Commission. Lee convinced Hall that he was investigating potential computer hackers targeting the institution’s bank account. Shortly after, Lee informed Hall about the identification of several computer hackers and claimed that further investigation was necessary.
Initially, Hall stated that the transferred amounts were relatively small, ranging from $4,000 to $5,000. However, when Lee persuaded Hall to install AnyDesk, a remote desktop software, the situation quickly changed. Using this access, Lee examined Hall’s emails and allegedly collected a significant amount of data.
In the following weeks, Lee convinced Hall to make money transfers between banks. Under the pretense of securing Hall’s money, Lee persuaded him to purchase small amounts of Bitcoin to trap the supposed hackers.
During their interactions, Hall and Lee discussed personal topics such as meals, further increasing Hall’s trust in Lee. Hall admitted to being “very naïve” about the matter.
In early July, Hall reported that he had transferred $130,000 from his retirement account to a so-called “Bitcoin exchange” at Lee’s direction. However, his bank quickly flagged the transactions as potential fraud. Despite reporting the incident to law enforcement, Hall stated that the chances of recovering the funds, which had now been converted to crypto, were low.
350% Increase in Crypto Fraud
As a development related to the issue, Judge Joseph LaPlante from the US District Court also postponed the hearing of libertarian activist Ian Freeman, who was found guilty of operating an unlicensed crypto exchange. Prosecutors are making efforts to impose a harsher sentence on Freeman due to his continuous targeting of elderly victims. The judge emphasized the vulnerability of many victims due to their age and highlighted their heightened sensitivity.
Victims such as Karen Miller, who lost her entire savings ($300,000) after being directed to Freeman’s platform by a scammer on a dating site, and Rebecca Viar, who reached the point of taking out loans and selling personal assets to transfer funds through Freeman’s platform, shared their distressing experiences.
Data from the US Internet Crime Complaint Center (IC3) indicates a troubling situation. Losses related to crypto among the elderly increased by 350% in 2022. Investment scams involving crypto saw a 300% increase, significantly contributing to an 84% rise in total financial losses for this demographic group compared to the previous year. In 2022, IC3 received approximately 10,000 complaints related to crypto from individuals over 60 years old, resulting in losses exceeding $1 billion, with crypto fraud accounting for 66% of these losses.
