MIDDLEBURG, Fla. – Cases of Bitcoin ATM fraud have started popping up in Clay County and now the Sheriff’s Office is warning people to be alert after a deputy saved an elderly woman from becoming the scam’s next victim.
Clay County Sheriff’s Office Lt. Michael Layne is currently the supervisor over community affairs, but he previously supervised the financial crimes unit which makes him an expert on Bitcoin ATM fraud.
Layne said within recent months, the CCSO financial crimes unit has investigated between 15 and 20 Bitcoin ATM fraud cases. He said in one of those cases, he was at the right place and at the right time when he recognized signs of a potential scam that led him to believe an older woman was being targeted by a Bitcoin ATM scammer.
“I was at a local convenience store making a purchase and as I was on my way out of the store, I noticed an elderly woman standing in front of a Bitcoin ATM. Typically, that generation does not trade a lot in cryptocurrency because it’s relatively new on the market. She was in the middle of a phone call on speakerphone, and I could hear a male on the other end of the phone who was giving her instruction on how to use the Bitcoin ATM,” Layne said “She asked the man on the phone, now what do I do?”
Layne said he got closer to the woman and could hear the man on the phone explaining to her how to log onto the ATM and make a deposit.
“I immediately stopped her. I knew she was being victimized. If you were going to use that technology, you would go into that store knowing how to use that technology. It was an immediate red flag for me,” Layne said.
At that point, he intervened and explained to the woman that he was a law enforcement officer and that the man on the phone was trying to scam her out of her money.
“He had convinced her that this was the only way to protect her money. He created a sense of urgency in her that she had to do this to protect her money. Unfortunately for her, the minute she made that deposit, her money was gone. It was not refundable, and it was not reversible in any way, shape, or form,” Layne said.
To an extent, the transaction was also untraceable by law enforcement.
“The problem is most of these scammers are behind virtual private networks or VPN, so you would just be chasing down a rabbit hole back and forth and you would never find the true source of it,” Layne said.
Layne said crooks who pull off this kind of scam are typically located in another country, sometimes countries the U.S. government doesn’t have good relations with.
The investigation into the woman’s encounter with the scammer began when she made an internet search for an Xfinity customer service line. Layne believes the woman either clicked the wrong link or dialed the wrong phone number because it put her in contact with someone who was not an Xfinity employee.
“The victim called the number and spoke with a female who said she was with this business, and they had noticed transactions on her banking account that looked fraudulent. The first person she spoke to was in on the scam. The woman on the line told the victim she needed to transfer the victim to the victim’s bank. She puts the victim on hold and then a male scammer picks up the line and identifies himself as a representative of her financial institution which she has already identified for the scammers, so they know what she’s talking about,” Layne said.
Layne said the scammer identified himself as a bank employee and then told the woman there was fraud on her account and that she needed to protect her money.
“He went as far as to tell her that she needed to withdraw all her money from the bank to protect it. If the bank asks why, tell them you had an emergency. Don’t tell the reason because they will try to keep your money and won’t let you have it,” Layne said.
According to Layne, the victim was an easy target, not necessarily because she was elderly, but because she was not tech-savvy and she believed everything the scammer was telling her.
Bitcoin ATM scams are carried out in several ways but the most common is through a phone call or text message. The scammer will pretend to be a government employee such as a law enforcement officer, a tech support worker, and even a legitimate business. Once the scammer has contacted the person they are targeting, they will come up with a time-sensitive reason why the targeted person must quickly deposit money from his or her bank account into a Bitcoin ATM. The scammer will even go as far as to provide the victim with a QR code that allows the victim to transfer cash directly into the scammer’s crypto-currency account.
According to a Federal Trade Commission (FTC) report on massive increases in money loss via Bitcoin ATM scams, victims have lost more than $110 million between 2020 and 2023. Newly released data shows Bitcoin fraud losses during the first six months of this year have topped $65 million. The data for that six-month time frame showed that scammers mainly targeted victims 60 years of age or older.
FTC tips to avoid being drawn into Bitcoin ATM scams include:
- Never click on links or respond directly to unexpected calls, messages, or computer pop-ups. If you think it could be legitimate, contact the company or agency, but look up their number or website yourself. Don’t use the phone number the caller or message gave you.
- Slow down. Scammers want to rush you, so stop and check it out. Before you do anything else, talk with someone you trust.
- Never withdraw cash in response to an unexpected call or message. Only scammers will tell you to do that.
- Don’t believe anyone who says you need to use a Bitcoin ATM, buy gift cards, or move money to protect it or fix a problem. Real businesses and government agencies will never do that – and anyone who asks is a scammer.
Deputies have been going into stores and educating clerks on how to spot a potential Bitcoin victim.
A clerk at a Circle K store in Middleburg told News4JAX that anytime she notices a senior citizen standing in front of a Bitcoin ATM in her store and that person looks perplexed, she intervenes to make sure that person is not being victimized by a scammer, especially if the perplexed looking person is also receiving instruction from someone on a cellphone.