An 80-year-old Athens man reported to police recently that he lost $1.6 million in a scam that emerged from contacting a woman on a social media app.
The man, a retired University of Georgia professor, told an Athens-Clarke police officer how he lost the money by participating in a cryptocurrency investment scheme.
The scam began in January, when he contacted a person identified as Bonnie Lee on the popular app WeChat, police said. It came to an end only recently when the victim contacted his grown son for advice and was warned the investment was a scam.
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Contacted Thursday, the son said the loss is a financial blow to his father.
“It won’t exactly wipe him out, but it is a big loss. It’s all of his money outside of his retirement,” the son said. “I’ve been talking to him to him quite a bit. The future risks are minimized at this point.”
The victim reported to police that Bonnie Lee persuaded him to make the investments, which he felt were legitimate. He opened an account, once depositing money to 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.
Later he invested another $600,000, then was informed he was blocked from making more transactions. However, people would come to his home to collect cash and that would enable him to continue making more investments, according to the report.
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The man was told he could verify these couriers because they would be given a $1 bill for which he would be provided the serial number.
The report shows the first person arrived at his home and left with $50,000 cash, then three days later, a second person arrived and he was given $20,000 cash. The victim said he offered the second person some food, but the person declined and “wanted to leave as soon as possible.”
Then in May, the man reported he was trading on the website and noticed he lost control of his account and it appeared he was having a substantial financial loss. When he attempted to withdraw $1million, he was notified that he had violated company rules and needed to pay $891,370 by May 30 or he would lose his money, according to the report.
In an effort to raise the money, the man told police he decided to sell his IRAs (retirement account). But he first reached out to his son for advice and the son told him it was a scam. The son told him to report the fraud to 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 cryptocurrency is traceable.
“The principal of cryptocurrency is that it is built on a digital ledger and every transaction before and currently are 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 you cash it, so you 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 the bitcoin per se. That is why bitcoins are utilized. It’s anonymous to a point and it’s instant,” he said.
However, the bitcoin must eventually be cashed out.
“You can’t buy a car with it. You can’t buy a house with it. You need money so you have to go to a crypto exchange,” he said.
Once the bitcoin is traded to get cash, you know who gets the money and an investigator can identify a possible suspect, he said.