How Scammers Work

[transition dinging] [suspenseful music]

[Evelyn] I was on Hinge for just a couple of months

and matched with one of the profiles.

Seemed like a nice guy.

It escalated to him asking

if I knew about cryptocurrency.

He said he ran a studio on the side

that did some currency exchanges.

And I ended up taking all my savings,

even tapping into my IRA,

we're talking like $300,000.

[whistling] Okay. [laughing]

That's a lot of money.

[Evelyn] Yeah.

It still to this day,

a year and a half later,

boggles my mind

that I could be victim to a scam,

especially of this financial magnitude.

That seems incongruous

with the image I had of myself.

You've probably noticed that online scams are everywhere.

You see them on job recruitment sites,

in your text messages,

on dating apps and across social media.

And while people are getting better at spotting these scams,

scammers are constantly advancing too.

Arguably, the most hurtful,

personal and financially damaging of these scams

is romance scams,

a type of investment scam

where the perpetrator spends weeks or months

getting to know the victim,

until ultimately conning them

out of as much money as they can get.

So what's it really like when you fall victim

to one of these scams?

How do they fool you?

And how much money can you really lose?

Today, we'll do a deep dive into relationship scams

and speak with Evelyn

who experienced this firsthand.

This is Incognito Mode.

[inquisitive music] [text whirring]

In 2024, cyber criminals stole

over $1 trillion from unsuspecting targets

around the world.

Americans were by far the biggest victims of cyber scams,

losing an average of $3,500 per incident,

more than double the losses reported in China.

The fastest-growing scams are investment scams,

which grew nearly 40% year over year.

These scams are based on gaining the victim's trust.

Most investment scams begin with an attacker

cold contacting people through texts,

social media, dating and other communication platforms.

You've probably gotten these texts before.

They'll often simply say, Hi,

or something like, Hey, Josh,

it was fun catching up last week.

If the recipient responds to say

that the attacker has the wrong number,

the scammer seizes the opportunity

to strike up a conversation.

To do this at scale,

criminals will often message hundreds of Facebook users

at a time

or match with every profile on a dating app.

This is very similar to what happened to Evelyn,

who asked to appear under a pseudonym.

Wired's Joel Khalili

was the first to report Evelyn's story in 2023.

[Evelyn] I am a 50-year-old woman living in Los Angeles.

At the time of the scam, I was 48,

and had just gotten out

of a long 20-year relationship.

The breakup came out of nowhere for me.

Completely unraveled my life.

I had been not working.

I had an early retirement.

I had to up and move out of the house

we had been living in for 20 years

and start all over,

completely all over in my personal life,

in my career.

I was stressed out financially,

and so I wasn't feeling great.

I was on Hinge for just a couple of months

and matched with one of the profiles.

His name said Bruce.

And we started chatting.

We exchanged pleasantries

and talked about like,

What kind of movies do you like?

What kind of things do you like to do?

Just like the basic get-to-know-you kind of things.

Seemed like a nice guy,

and quickly became very, I guess, via text,

like affectionate,

saying, I really like chatting with you.

I don't wanna be chatting with anyone else,

like that kind of thing.

He said he lived in Sunnyvale, in California,

and that he also had a second home in Beverly Hills.

Huh, okay.

How did that make you think about him,

feel about him when you learned

like he has two homes in California,

presumably he's pretty well off, it sounds like?

[Evelyn] Yeah, even his few profile pics

kind of gave off the vibe that he had some money.

And the second home was more important

in that it anchored him also in Los Angeles,

'cause I didn't wanna start a long-distance relationship.

Right. So he'll be in town

at some point.

At this point, you can probably better understand

why Evelyn kept chatting with Bruce.

He seemed smart, kind, caring.

And that's exactly what relationship scams are based on,

basic human feelings, like a desire for connection

or feeling stressed out about money.

Knowing this, it's no surprise that since the pandemic,

fraud has reached epidemic levels.

[Reporter] They hit a record high in 2021,

with people losing something like $550 million,

up nearly 80% from the year before.

A rise in social isolation

and more online interactions

created a perfect breeding ground

for online scams.

Gareth Norris, a lecturer in psychology

at Aberystwyth University,

published a paper in 2019

on the psychology of internet fraud.

According to Norris, scams in the digital age

are much more effective

because they happen behind a screen.

Behavior that might normally raise suspicions,

sweating or fidgeting,

is concealed.

Not only that, but scammers have become experts

at manipulating human psychology.

David Modic, a professor of computer and information science

at the University of University of Ljubkana,

says the chances that someone will fall for a scam

has no connection with intelligence.

Rather, it's about the ability of the scammer

to take advantage of personal context,

like a recent breakup,

to erode someone's self-control

and blind them to the warning signs.

Basically, scammers are really good

at getting people to do what they want.

And once they have you locked in,

it can be really hard to notice the warning signs,

no matter how intelligent you are

or tech savvy you think you may be.

At this point, had you only been talking to Bruce

via text message,

or had there been phone calls,

or video chats, or anything?

[Evelyn] Definitely no video chat.

Pretty quickly from our chatting on Hinge,

he asked if I use WhatsApp.

So we did,

and that's where all the conversation happened since.

And then it escalated

to him asking if I knew about cryptocurrency,

which I knew some.

And then he said he ran a studio on the side

that did some currency exchanges

and made money,

and if I would be interested

in putting some money in it.

Day trading or something,

but with cryptocurrency.

He led me to a third-party website,

as far as I knew.

The website, I believe, was C-E-G-A-M-A-S.com.

I don't know what it stood for.

He walked me step by step,

sometimes with screenshots,

sometimes just telling me like,

This is what you do to transfer the money.

This is where you put it in.

And it looked colorful,

but it looked legit.

It even had like the footers on the bottom,

it had a support chat,

and you know, it had all the bells and whistles

you would expect.

It wasn't like some 1990s website

or anything like that.

Right, I understand.

When did you start putting money in,

and how much was that?

[Evelyn] I think the first amount

was probably like $1,000 or $2,000,

'cause I already had that much in my Coinbase account.

It was already like money

I didn't consider as having,

so I was fine using that

as my first transaction money.

It seemed low risk at that point?

[Evelyn] Exactly.

And so his logic was that,

Oh, I have a team of people

who have been studying the trends

and they know when to do the transactions

and when it's gonna hit higher.

So he would be like,

Okay, well, the next peak is gonna happen

in two days, or something like that,

which I'm sure to a finance person,

it would be ridiculous

to hear that. [Andrew laughing]

But like there have been so many coins

that have been influenced

by the news and whatnot.

So I thought like, Okay, sure.

Where did things go from there?

[Evelyn] It made like

a couple hundred dollars or something,

which was like, Okay, I could see that.

So that happens a couple more times.

And then I said,

I wanna take some money out,

because I wanted to make sure

I could take money out.

He walked me through the steps,

and it was easy.

And I had screen grabbed that process

and written down notes on how to do it

because I thought I was being smart,

figuring things out

and like having a just-in-case emergency plan.

And so I was able to withdraw the money.

Do you remember how much you withdrew

or if you had any temptation

to just take it all out

and kind of be done with it,

since you were up already?

[Evelyn] Oh, Andrew, if only I had done that.

[both laughing]

But it's like a gambling person at a casino, I guess, right?

When you're up, you just keep on putting in the money.

I took the fact that I could take out money

as a sign that it was safe.

[transition whirring] [inquisitive music]

So how do scammers perform investment fraud?

Adrian Cheek, an independent security researcher

based in Canada,

says, The methods used in these scams

are almost always the same.

A cyber criminal organization

develops a template for a fake crypto trading site,

and in exchange for a kickback,

hands it to other criminal affiliates

who perform the scam.

Data gathered by Cheek suggests

that at least 439 distinct web addresses

have been used to host the CEG exchange,

It's absolutely textbook, he says.

A quick scan of the Crypto Scam Tracker

on California's Department of Financial Protection

and Innovation website

tells a similar story.

The scams reported are almost identical.

An unsuspecting target meets someone online

on a dating site, messaging app, or similar.

After chatting for a while,

the person they met brings up the possibility

of helping them invest in crypto

and introduces them to a trading website or app.

Some reported names include Capital Handels System,

Ice Crypto Trading app,

Topex, and GCC Money.

The apps or websites appear trustworthy

and may even impersonate the platforms

of legitimate financial institutions.

Once inside the portal,

targets can often see curated realtime market data

meant to show the potential of the investment.

And once the target funds their investment account,

they can start watching their balances grow.

So now you've taken some money out.

What's your opinion of Bruce?

What's the vibe at that moment?

[Evelyn] Very friendly still.

We were still chatting on a regular basis.

And then, at some point,

we had chatted on the phone.

He had an accent,

but whatever, like people have accents,

I didn't think anything of it.

Of course, the whole time on the relationship side,

I had been wanting to see

when he was gonna come down to LA

so we could meet in person.

What I should've at least pushed for

is the next step would've been a video chat of some sort.

I don't know that would've done anything

to change the outcome,

but I didn't even do that.

And it was always like,

Oh, in a couple of weeks.

And the whole scam didn't last that long

to a point where it was like he kept pushing it back

and I was getting like frustrated

or anything like that.

But it wasn't to a point where I was like,

Oh, okay, something's up,

you're hiding from me.

And then he's also pushing to invest more.

That part never died down.

In fact, it increased,

where he was saying like,

Hey, the more you put in to trade,

the higher your return,

which again also makes sense,

you need money to make money.

Right. He eventually wore me down,

and I ended up taking all my savings

and even tapping into my IRA-

Oh no. to, I guess,

I don't wanna say like to appease him,

because there was obviously a part of me

that wanted to do it,

but it eventually got to that point

and he succeeded

in talking me into putting in all that money

into this website

and, quote-unquote, trading with it.

The fact that I had withdrawn money

was like this big green light in front of me

in being like, Well, you know,

you might lose some money,

like let's say the timing was off or something,

but you can always take it all out

if something starts to go south.

So do you remember like how much, at that point,

you were in for between your savings

and what you took out of your IRA?

[Evelyn] Oh, we're talking like $300,000.

[whistling] Okay. [laughing]

That's a lot of money.

Yeah. Yeah.

So-- It was everything.

Oh, man, how did that go?

How did you feel, you know,

converting 300,000 actual dollars

into cryptocurrency at that point?

Were you excited?

[Evelyn] Yeah, unfortunately, I was excited.

While this is happening,

I had asked about his work,

and he sent me a photo of his office,

like, Hey, here are the guys working hard,

or something like that.

Only later, I reverse image search that photo

and realize that it was a two-year-old photo

from someone else's Twitter account.

[Andrew sighing]

And this was after you realized

like you've been had by this guy?

[Evelyn] I think so,

or like I was starting to get suspicious,

like it was somewhere in the ramp up.

The photo tied to a company

that was charged with being fraudulent.

And of course that freaked me out.

What also freaked me out

was the first time I made a big transaction

with most of the money,

the return on it was some ridiculous amount.

I thought, No way, something's up.

And so it wasn't that you lost money,

it was that you made so much money

that you were like, This can't be real,

or, Why is everyone not just making money this way?

[Evelyn] Exactly.

Okay, so in the timeline,

we're at this point where you've put in your life savings,

you're up a suspicious [laughing] amount.

What happens next from there?

[Evelyn] I tried without Bruce

to take out all of the money,

going through the steps

that I had noted and screenshotted,

and it didn't work.

So I thought, Okay, well,

maybe I have to do it in smaller chunks.

Maybe there's a limit or something.

So I try to take out a little bit of money,

like couple thousand dollars,

about the same amount probably that I did before,

I still couldn't do it.

So then I messaged the support,

saying like, Hey, what's going on?

And I get a message back saying,

You have to put in 15% of the value of your account

to prove that you are legitimate

in order to take out the money,

entirely. Oh boy, I'm getting stressed

just [laughing] thinking about this moment.

Were you freaking out at this point?

[Evelyn] Oh yeah, my blood ran cold,

and I kept trying,

without the tech support anymore,

like, No, no, no, no, no, this isn't happening.

First of all, even if that was true,

I no longer had 10% of the value

of this ridiculously fake amount of money

[laughing] that I now had, allegedly. Yeah.

[Evelyn] I think it was when I got that information

and I turned to Bruce and said, What is this?

Like what does this mean?

Why can't I get any money out?

And his response was,

Oh, didn't I tell you?

Like, yeah, that's their policy

to weed out the scammers.

[Andrew] Ah, uh-huh.

[Evelyn] Yeah, once he said that,

I was like, Oh, you're in on this.

[Andrew laughing] This is bad.

And then he tried to convince me

to borrow money to get my money back.

So I just stopped communicating with him

and just tried to come to grips

with what I had done,

what I, on my own two feet,

walked into the bank to do.

I still drive by that bank on a regular basis

and I inwardly cringe,

because I did that.

And I, for a little bit,

could not bring myself to tell anybody.

It was so shameful,

it was so embarrassing.

Mainly it was embarrassing.

And I did eventually go to the police,

the local police,

and then I also filled out the FBI digital scam something,

some department of theirs.

Like the police [laughing] was very upfront

in saying, there's nothing we can do,

because the pictures you have,

the information, the phone numbers,

like all of that could be fake.

In the Hollywood ending,

there'd be a duffle bag full of money

that they walk out with

and hand over to me.

Right.

[Evelyn] But none of that happened.

And he flat out said like,

The volume, the lack of information

that could be true

just wasn't there.

[text whirring] [inquisitive music]

So what happens if you try to go to the cops?

The likelihood that a victim

will get their money back is slim.

The only hope lies

in tracing the movement of cryptocurrency.

An analysis of the movements of the crypto

stolen from Evelyn,

conducted by Chainalysis,

a firm whose tools are used by law enforcement

to inform investigations,

reveals the lengths scammers will go

to cover their tracks.

After Evelyn handed over the crypto,

it was divided into different wallets

and eventually cashed out through a selection of exchanges

based in multiple countries,

where it was blended with funds

stolen from other victims

and converted on multiple occasions

into different crypto tokens.

Each of these hops

is designed to further blur the origin of the funds

and limit the likelihood

an exchange might identify wrongdoing

and freeze the assets.

This indicates a high level of organization,

says Phil Larrat,

director of Cybersecurity Investigations at Chainalysis.

The sheer volume of scams like this one,

coupled with the lack of resources

and technical expertise among long enforcement

means investigations are rare.

These scams are extremely hard to investigate,

prosecute and disrupt, says Nicola Staub,

a former cyber crime prosecutor,

and now CEO of security startup, Cybera.

The estimates vary,

but all told, only a minute percentage of victims

ever see their money again.

Others even get scammed again by recovery scammers

who ask for upfront payment

in return for helping retrieve lost funds.

[text whirring] [pensive music]

So who are these scammers?

Pulling off long-term investment scams

can take hours of communication

and relationship building.

And researchers say that criminal organizations

develop scripts and playbooks

that allow them to offload the work at scale

on to inexperienced scammers.

And these inexperienced scammers

are often victims themselves.

Many of them have been subjected to human trafficking

and are enslaved at compounds

controlled by criminal gangs.

In Southeast Asia, for example,

it is believed that hundreds of thousands of people

have been trafficked to giant scam centers.

They're then forced to scam victims abroad

and can be beaten or tortured if they refuse

or try to leave.

A 2022 ProPublica investigation

into human trafficking and cyber scamming

has also shed light on how victims are smuggled

and sold into forced labor.

One example is Fawn, a 22-year-old from China.

In March of 2021,

Fawn was offered a marketing position

with what he thought

was a well-known food delivery company in Cambodia.

The proposed salary was $1,000 a month

and was enticing by local standards.

Fawn was so excited

that he told his older brother about the opportunity,

who then quit his job and joined him.

By the time they realized that the offer was a sham,

it was too late,

their new bosses wouldn't let them leave the compound

where they had been put to work.

Fawn was taken captive in 2021

and sold twice in 2022.

Each time he was sold,

his new captors raised the amount

he'd have to pay to buy his freedom,

his debt more than doubled from $7,000 to $15,500

in a country where the annual per capita income

is about $1,600.

ProPublica also found that human traffickers

use apps like Telegram

to sell their victims.

One ad reads, Selling a Chinese man in Sihanoukville,

just smuggled from China,

22 years old with ID card,

typing very slow.

The problem of human trafficking

is likely to get worse,

especially with the dismantling of USAID,

as many efforts addressing forced labor compounds

that fuel digital fraud,

like investment scams,

are being cut.

[inquisitive music]

[text whirring]

Scammers are often constrained by their language skills

and ability to keep up conversations

with potentially hundreds of victims at a time

in numerous languages.

However, AI developments within the last two years,

including the launch of writing tools like ChatGPT,

are making it easier for criminals

to break down language barriers

and create the content they need for scamming.

Perhaps the biggest AI paradigm shift

comes from deep fakes.

Scammers are increasingly using machine learning systems

to allow for realtime face swapping.

This technology allows criminals

to change their appearance on video calls

with their victims,

making them realistically appear

to be a different person.

Such services are a game changer for scammers

because they allow attackers

to prove to victims in photos or realtime video calls

that they are who they claim to be.

Stephanie Baroude,

a criminal intelligence analyst

in Interpol's human trafficking unit,

says, The impact of AI

also needs to be considered

as part of an investment scammer's tactics

in the recruitment of other scammers.

Baroud says the recruitment ads

that lure people into being trafficked

used to be quote, Very generic,

and full of grammatical errors.

However, AI is making them appear

more polished and compelling.

It really is making it easier

to create a very realistic job offer, she says.

Unfortunately this will make it much more difficult

to identify which is the real

and which is the fake ads.

I'm sure in some of your research

or reading some of the coverage of this,

you've heard about this scam compounds

that are really prevalent in Southeast Asia.

And obviously it seems unlikely

we will ever know Bruce's identity,

but has it crossed your mind

that he might've been,

you know, potentially a victim of human trafficking himself

and also be not necessarily

just a perpetrator in this whole system?

[Evelyn] Yeah, I found that out afterwards

that whoever he is himself

could be a victim too, just like you said,

which complicates it a little bit

as far as how I feel about the perpetrator,

because I thought I was the only victim

in this situation,

but to know that somebody

is having to do this against their will on that end

is so tragic.

Yeah. And to me,

there's a special place in hell

that is reserved for scammers

because you are putting in so much effort

just to take from somebody else.

Yeah. And that's a lot

of brain power

that went into creating this scam,

creating this fake website,

making fake profiles,

sourcing all those fake profile photos.

It is tremendous amount of work,

and all it is is to con somebody else

out of their hard-earned money.

[inquisitive music] [text whirring]

The criminal enterprises behind these scams

run complex logistical operations,

both physical and digital.

Since beginning in China in the late 2010s,

investment scammers have grown in number

and they've begun to spread globally,

with scamming infrastructure

emerging in the Middle East,

Eastern Europe, Latin America and West Africa.

Surprisingly, since 2021,

Dubai has emerged as the largest epicenter

of investment scams

outside of Southeast Asia.

At least six alleged scam compounds

believed to be operating around Dubai have been identified.

The research based on testimony from forced laborers,

data leaked from a cyber attack

and social media posts

identified potential compounds

around industrial and investment parks.

These organized crime groups

typically set up in countries

where they can take advantage of instability,

whether it's poverty,

lack of government regulation,

limited law enforcement resources,

or other favorable factors.

Regardless of where these scammers are located,

their tactics are all pretty similar,

and the results can be devastating

for targets around the world.

[Evelyn] To this day, about a year and a half out,

not a whole lot has changed,

and that's very disappointing

and also disheartening.

I'm worse off financially than before,

that's for sure.

I am still single,

not that that makes or breaks my life,

but just in terms of,

Well, at least in the year and a half,

things have turned around,

like that's not my story.

Logistically and financially,

every day, every day think about it

and can't believe it happened.

That's the main reason

why I wanted to do this interview

and wanted to do the article in the first place

because I'm very comfortable with technology.

I like to think, like I said,

I'm a logical, smartish person

who knows better than to fall for the Nigerian prince scam.

So I thought I was pretty well prepared.

I thought I had been following a lot of smart things

in like making sure I can withdraw the money

and the fact that the website looked fine,

you know, to the naked eye,

but yet it still happened to me.

And I want people to not be so confident

to think like, Oh, that was obvious.

Like that would never.

Like that's what I thought too.

[inquisitive music] [text whirring]

So, are there any ways to protect yourself?

There's so many scams out there,

it's hard to give a one-size-fits-all answer,

but some red flags that you can look for

are if a stranger contacts you out of the blue

and tries to befriend you on a text message

that you wouldn't expect.

If you meet somebody who starts talking about investing

and telling you how to get rich quick.

If somebody asks you to send them money,

or pay for them, or send a gift,

that's gonna be a red flag.

If they ask you to move to a specific platform

that's different from the one where you met them,

that's also something you gotta watch out for.

If something feels off, it probably is,

so take a minute to consider what you're doing.

If this does happen to you,

it's important to talk about it,

because the more awareness that comes to this,

the more law enforcement

can put resources behind combating it,

the more people know how to avoid scams

and the harder it is for the scammers

to get away with it.

This has been Incognito Mode,

until next time.

[upbeat music]