How Cryptocurrency Leads to Romance Scam?

Cybercriminals have never missed the chance of cultural events in recent years, like Valentine's Day which is always a “catalyst” for new frauds.

Romance scams target people under the pretext of romance, but with the latest trick involving cryptocurrencies.

Romance scams, where scammers pretend to be pure lovers to deceive their victims are not new.

However, the abnormal growth of deceptiveness fueled by the proliferation of online dating applications in addition to the new tactics targeting more victims, as well as the wider use of cryptocurrency, are getting attention from law enforcement and compliance departments.

This year, the FBI said its cybercrime unit reported that romance scams amounted to $64 million this year in northern California, nearly double what was detected last year, according to CBS News San Francisco Bay Area, KPIX5.

 

A Powerful Hook for Scammers

As the San Francisco Bay Area heads into Valentine’s Day Weekend, the FBI warned local residents to be really careful for scams that will not only break their heart “but rip-off your pocketbook.”

According to the FBI’s Internet Crime Complaint Center, victims within the FBI San Francisco division’s territory “lost more than $64 million to romance scams in 2021 compared to over $35 million in 2020.”

In 2021, this center received 742 complaints within the Northern District of California while in 2020, it recorded 720, but in 2019, there were only 526, says The Wall Street Journal.

The county having the highest dollar amount loss and victims was Santa Clara County, followed by San Francisco County and Alameda County, according to the same source.

“While these schemes affect victims from all demographics, older adults are the most targeted group,” the FBI said in a news release.

“Last year, the age group with the highest victim reports within our region was 60 years and older, with a victim count of 193 and a dollar amount loss of over $18 million.”

 

How Does It Happen?

According to the FBI's Internet Crime Complaint Center, when a criminal creates a fake online identity to assure his victim’s affection and trust, romance scams occur, and the deceived partner will be a broken hearted with no money left.

So through illusion and distant relationships, the scammer can easily manipulate and steal his victims’ money, then disappear.

“The criminals who carry out romance scams are experts at what they do and will seem genuine, caring, and believable,” the agency said on its website.

“Con artists are present on most dating and social media sites.”

The issue has received new attention following the Netflix documentary The Tinder Swindler, a story of a man who stole hundreds of thousands of dollars from women after convincing them he was a very known businessman being hunted by shadowy enemies.

CNET senior writer Bree Fowler says there were victims who have been deceived by giving their entire life savings.

“They’ve been taken for thousands of dollars sometimes. These people are looking to con just unsuspecting people out of whatever money they can get.”

“I think a lot of people know when they’re contacted by someone randomly online that they need to be careful but, you know, when it comes to legitimate dating apps, you’re basically doing the same thing. You’re just hoping that that person is really a local and that they’re real and that they’re not just an old-fashioned creep,” he added.

The Ruse

Investigators said that romance scammers' pursuit of individuals to send money and cryptocurrency for alleged investment, has, in recent years, become a rising trend.

A report by The Indian EXPRESS explains how the victims can easily be deceived.

After gaining the trust of the victim, the scammer’s role then is to guide his victim to a fraudulent website for investment opportunities.

After the victim has put a specific amount on the website or the application, he gets an alleged profit, at this time, “the scammers allow the victim to withdraw a small amount of money” or transfer cryptocurrency funds, according to the same report.

Eventually, the victim will be satisfied and even happy with the profit he got, so the scammer will encourage him to invest a more considerable amount.

“When the victim is ready to withdraw funds again, the scammers create reasons why this cannot happen,” says the report.

So romance tricks are trying more and more to lure victims into fake investments, says a new report from the Federal Trade Commission.

The first reason led victims to believe and pay is seeing their new online partner being a successful investor  based on the picture he draws during their virtual meetings to know and love each other while offering investment advice.

Looking for love online can be more expensive than anybody thinks.

 

Businessmen Too

According to a report published by Oxygen in 2019, the FBI has detained 80 people, most of them are Nigerian; they were part of a “massive conspiracy” to rob millions of dollars from businesses, and vulnerable women.

Using online scams, including romance scams and business schemes, scammers hacked into company escrow accounts, convincing their targets to give up “at least $6 million and attempted to steal another $40 million,” said the report.

“We believe this is one of the largest cases of its kind in US history,” US Attorney Nick Hanna said, according to CNN.

US prosecutors told the story of a Japanese woman who believed she was working with a US army captain.

The two were texting each other until the relationship turned romantic. At this point, the scammer claimed he had discovered a bag of diamonds in Syria, as he was stationed there as a US army captain.

So he asked the woman to help him smuggle the diamonds out and soon began requesting money.

Over 10 months, she sent $200,000 as she believed he was her army captain who would buy her the diamonds with shipper price after she helped him move out the bag.

To gather the money, the deceived had borrowed from family, friends, and even her ex-husband.

“But the army captain never existed and neither did the bag of diamonds,” according to the same report.

The ruse was actually being run by two Nigerian men living in Los Angeles.

The scammers, indeed, didn't just target hopeless people looking for love and company, they also hacked into businesses.

According to federal prosecutors, the scams not only relied on romantic deceptions, but also included plans to target businesses including business email compromise (BEC) frauds.