Seniors in an affluent S.C. community have had it with ‘doggone' crypto scammers

Yahoo

13-02-2025

HILTON HEAD, S.C. — Marianne, a retired health care worker, was on her way to a breakfast date with her girlfriends in November when her phone rang.
The caller, who said he was with the Beaufort County Sheriff's Department, told her she was in contempt of court for missing jury duty and facing jail time. He connected her to his supervisor, who said she could pay a $7,500 bond to remain free until her court date.
Initially skeptical, Marianne, 66, eventually withdrew the sum, a mix of $50 and $100 bills, from her bank and followed their instructions to feed the cash into a Coinstar ATM at a local Food Lion grocery store.
But the money Marianne thought was keeping her out of jail was converted to cryptocurrency and transferred to a scammer's digital wallet.
Then the supposed sheriff's officer, still on the phone, told her she needed to pay $3,000 more.
Marianne felt uneasy, so she called the sheriff's office directly. When the dispatcher she reached told her it was a scam, she broke down.
'Oh, my God,' she realized. 'They got me. Doggone them.'
Marianne, who spoke on the condition that NBC News publish only her first name out of concern she could be targeted again, was the victim of a new crypto con based on an old scam. From Keystone, Colorado, to Sandy Springs, Georgia, sheriffs and police departments are warning residents about impersonators who claim their marks have missed jury duty and must pay fines or face arrest.
Today a growing number of people in the United States have crypto kiosks at their local grocery stores or gas stations. There are roughly 30,000 bitcoin ATMs (BTMs) in the United States, according to Coin ATM Radar, a website that tracks them. The Coinstar machine where they haul in loose change for cash might now also sell bitcoin. Bitcoin Depot, North America's largest BTM operator, has kiosks in 48 states and is still expanding. The operators can charge users hefty transaction fees, and the stores often receive payment for hosting the BTMs.
Food Lion, the store Marianne visited, referred questions to Coinstar, which said in a statement that it is 'committed to consumer protection' at its kiosks. Coinme, a platform that partners with Coinstar to sell cryptocurrency, said it was 'deeply saddened' to learn of the incident. In a statement, it cited security measures including on-screen warnings and multi-factor authentication but noted that 'scammers continually evolve their tactics."
Last fall, Sen. Dick Durbin, D-Ill., then the chair of the Judiciary Committee, and six other senators contacted the 10 largest companies running crypto ATMs and asked how they were preventing fraud against seniors. Many, like Coinme, display on-screen warnings and disclaimers. At least two companies said they require older customers to speak with agents before they complete transactions.
Still, as the Trump administration's embrace of cryptocurrency boosts the industry, advocates say more should be done to protect consumers.
Residents of Beaufort County, where Marianne is based, reported $3.1 million in losses from crypto scams, including several involving BTMs, to local law enforcement agencies last year alone.
Some advocates are trying to get the Legislature to take up the issue.
'The problem is already there, but it can certainly get bigger over time,' said Carri Grube Lybarker, administrator of the South Carolina Department of Consumer Affairs. 'And the longer we wait, we're concerned the more folks will lose their hard-earned money.'
South Carolina's Lowcountry is a haven for seniors. Spanish moss drips from trees, beautiful beaches abound, and golf carts share slow roads with cars. In Beaufort County, more than a third of the population will be 65 or older by 2040. That makes it attractive to scammers, too.
People 60 and older are more than three times likelier to report being scammed at bitcoin ATMs, according to the data from the Federal Trade Commission.
Eric Calendine, a lieutenant with the Beaufort County Sheriff's Department, said one of the worst cases he has seen involved a retired couple deceived for months into thinking they were protecting their savings by depositing them at bitcoin ATMs. The couple went to several ATMs in Savannah, Georgia, and Beaufort County. In the end, they lost almost $390,000.
'We can't keep doing this,' Calendine told NBC News. '$390,000. $30,000. $80,000.
'We can't keep going down this road of our victims going to these ATMs, just putting a large amount of money into them and there not be any regulation.'
On a Tuesday evening, a small crowd gathered in a meeting room at a retirement enclave of about 18,000 just outside Hilton Head known as Sun City.
'It's easier to take your money than to rob a bank,' Calendine said as he launched into his presentation on scams.
There hasn't been a bank robbery in Beaufort County since 2016, Calendine told the room. Two years ago, the largest losses from scams involved wire transfers. But last year, cryptocurrency scams, including ones involving BTMs, rose to the top of his list. One of the most common, he said, was the jury duty scam.
Retirees are targeted, experts say, because of savings they've built up over decades. Hilton Head's affluence might also be drawing scammers.
'They're targeting where the money is located at, and they know that through census data,' Calendine said. But many of the victims he deals with can't afford such hits.
'Eight thousand dollars is still a lot of money when you're living on a budget,' he said.
The Federal Trade Commission shows that reported losses in scams involving crypto kiosks grew from $12 million in 2020 to $114 million in 2023. Victims have been misled to believe they're speaking with tech support about computer troubles, receiving sound investment advice, or bailing a loved one out of jail.
Most victims don't realize the 'warrant numbers' they've been given for missing jury duty or the QR codes they've been provided to scan at the machines are actually the scammers' virtual wallets.
Once that money reaches a fraudster, it can be nearly impossible for funds to be recovered — even when authorities can see where they are.
That means that when scam victims approach kiosks, they might be a few keypad strokes away from losing their life savings.
AARP's fraud hotline receives daily reports about scams involving bitcoin ATMs, said Amy Nofziger, director of victim support for the fraud watch network at the organization, which has advocated for tighter regulation of the machines.
Customers who work with bank tellers or cashiers might pick up on people's being nervous during transactions, she said. But with BTMs, 'there is nobody watching the machine,' she said. 'Less eyes on it is better for the criminals and, of course, harder on the victims.'
One 80-year-old man in Beaufort County lost $31,000 in September.
'It's an insult,' he said of the alleged scam. 'She did a damn good job on me.'
The man, a retired banker, spoke to NBC News on the condition that his name not be used over safety concerns because the perpetrators haven't been identified. After a warning that appeared to be from Microsoft popped up on his computer screen, he called the number provided. He was transferred to someone who told him his browser history showed illegal activity, including viewing child pornography.
Then he was transferred again to someone who claimed to be a special investigator with the Social Security Administration. The woman told him that a warrant had been issued for his arrest and that he needed to close out his bank account and transfer the money out 'so the bad guys can't get to it.' She suggested withdrawing $31,000.
At the scammer's instruction, he told his bank that he was using the money for building repairs. He left with the cash in a bag and drove an hour to a liquor store in Savannah with a bitcoin ATM. One by one, he ripped off the purple wrappings grouping his $100 bills into 15 bundles of $2,000 apiece and fed each bill into the machine.
A store manager said the kiosk is a third-party service that has a disclaimer and referred questions to Coinhub. Coinhub didn't respond to questions.
After he finished, the scammer told the retired banker he needed to get the rest of the money out of his account.
When he hesitated, 'she got violently mad,' he said. Suspicious, he filed a criminal report the next afternoon.
As a former banker, he found the scam particularly brazen. 'My ability to go to Savannah, Georgia, and buy $31,000 worth of bitcoin through a machine all in the manner of an hour or so — that should probably be regulated,' he said. 'It should not be allowed to happen.'
He bounces from shame to anger when he thinks about it. The money came from a joint account he has with his significant other, and it included money she earned from grueling nursing shifts.
The couple have 11 grandchildren between them. He's determined to get their money back.
'But who am I going after?' he asked.
That's a question law enforcement has been chasing, too.
If a victim has a receipt from a bitcoin ATM with a wallet address, the stolen money can sometimes be traced, said Detective Nezar Hamze of the economic crimes unit of the Anderson County Sheriff's Department in South Carolina. His office can try to freeze the payment once it reaches an exchange, a platform on which customers can buy and sell cryptocurrency, and ask for information about the account holder.
But often those exchanges are based overseas and can't be forced to comply.
Many exchanges are 'not U.S.-friendly,' Hamze said, explaining it's not uncommon for an international broker to respond with 'the virtual middle finger.'
Given how hard it is to get money back, legislators in at least seven states —North Dakota, Washington, Nebraska, Rhode Island, Oklahoma, Arizona and Colorado — have focused on limiting the damage. They've introduced bills this year that would limit how much users can deposit in a day or mandate refunds in some cases, similar to restrictions already in effect in California, Minnesota and Vermont. Some of the companies have pushed back, arguing that such restrictions might lead to transactions being spread over multiple machines.
Victims are also turning to the courts. In April, Glenda Mooneyham, a 74-year-old widow, filed a federal lawsuit seeking class-action status against Bitcoin Depot, which operated the BTM she used, and Circle K, which hosted it.
Stacie Sox, Mooneyham's daughter, said that during one of her visits to the BTM in November 2023, her mother had to pull over a stool to sit down as she fed $15,000 worth of bills into the machine at her local Circle K.
Sox said her mother, a retired hairdresser, has become more anxious and less trusting since the scam.
'The hope for the world around you is gone,' she said.
In response to questions from NBC News, Bitcoin Depot didn't comment directly on Mooneyham's lawsuit, but it said in a statement that it has worked 'to promote responsible legislation for the Bitcoin ATM industry that is focused on compliance, anti-fraud measures, and consumer privacy.'
In court filings, Bitcoin Depot argued that it would be wrong to hold the company liable.
'The mere fact that the Bitcoin Depot Defendants operate the ATM with which a criminal actor chose to effectuate a crime does not mean they committed an unlawful act in their own right,' attorneys wrote. Mooneyham clicked through several warnings, they said.
Sox said her mother was trying to be quick and didn't recall those notices.
'She had $15,000 worth of cash in her hands,' she said. 'Nobody wants to stand in a gas station with $15,000 in their hands.'
A spokesperson for Circle K said it generally doesn't comment on litigation.
Back in Beaufort County, Calendine hopes legislation setting daily deposit limits might at least slow scammers down.
'We're just trying to stop the bleeding,' he said.
This article was originally published on NBCNews.com