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Social Media Outburst Ends With Athens Man Losing $1.6 Million
An 80-year-old Athens man recently reported to police that he lost $1.6 million in a scam that emerged after he contacted a woman on a social media app.
The man, a retired University of Georgia professor, told an Athens-Clarke police officer that he lost money participating in a cryptocurrency investment program.
The scam began in January when she contacted a person identified as Bonnie Lee on the popular app WeChat, police said. It only ended recently when the victim contacted her adult son for advice and was warned that the investment was a scam.
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Contacted on Thursday, the son said the loss was a huge financial blow to his father.
“It won’t wipe him out completely, but it’s a big loss. It’s all his money, outside of his pension,” his son said. “I’ve talked to him a lot. The future risks are minimal at this point.”
The victim told police that Bonnie Lee had convinced him to make the investments, which he believed were legitimate. He opened an account, once deposited money on a site called Kraken and from this site the money was transferred to another called World.
“This convoluted process resulted in a total loss of $600,000,” according to the police report.
He later invested another $600,000, then was informed that he was barred from making further transactions. However, the report says people would come to his house to collect cash, which would allow him to continue making more investments.
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The man was told that he could verify these couriers because he would receive a $1 bill for which he would be given the serial number.
The report shows that the first person came to her home and left with $50,000 in cash, then three days later a second person came and was given $20,000 in cash. The victim said she offered the second person food, but he refused and “wanted to leave as quickly as possible.”
Then in May, the man reported that he was trading on the website and noticed that he had lost control of his account and appeared to be suffering a substantial financial loss. When he attempted to withdraw $1 million, he was told that he had violated company rules and that he would have to pay $891,370 by May 30 or lose his money, according to the report.
In an attempt to raise money, the man told police he decided to sell his IRA (retirement account). But before he asked his son for advice and the son told him it was a scam. His son told him to report the fraud to the police.
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How a cryptocurrency scam works
Police Lt. Jody Thompson, a public information officer who has investigated fraud crimes in the past, said the cryptocurrency is traceable.
“The principle of cryptocurrency is that it is built on a digital ledger and every previous and current transaction is listed on that ledger,” Thompson said.
The transactions, he said, are public.
“It would be like me writing you a check and showing you my bank balance before I cashed it, so you would know the money is there,” he said.
In the cryptocurrency system, a person buys a bitcoin and transfers it to what is called a bitcoin wallet.
“You don’t know who owns bitcoin per se. This is why bitcoins are used. It’s anonymous to a certain extent and it’s instant,” he said.
However, bitcoins will have to be cashed out sooner or later.
“You can’t buy us a car. You can’t buy us a house. You need money, so you have to go to a cryptocurrency exchange,” he said.
Once bitcoin is exchanged for cash, it is known who is getting the money and an investigator can identify a possible suspect, he said.