Inside the ‘crypto’ costing victims billions in losses: ABC News investigates

Shai Plonski thought he had found the perfect woman. He said he had been messaging a woman named “Sandy” who he met on a Facebook dating site, believing she shared his interest in yoga and poetry and who lived 30 minutes from his home in Sebastopol, California.

The two texted and shared photos for weeks until one day Plonski said he shared that his business was struggling after the COVID-19 pandemic. The woman suggested she should try investing in cryptocurrency, something she said she was an expert at, Plonski told ABC News.

“Now open your trading account … and I’ll guide you step by step to the right position,” Plonski said the woman told him via text.

At first, Plonski said he invested $200. After he was able to successfully withdraw it with a 10% return, he continued to invest. Soon, he said, he invested everything he had — his life savings.

“The Crypto Con” airs Thursday, September 5 on ABC News Live “Prime” with Lindsey Davis.

But when Plonski shared the news of his new relationship and the success of his investment with his friends, he didn’t get the reaction he expected.

Plonski said his friends showed him an article about a scam known as “pig butchering,” in which scammers groom their victims for months, according to the FBI, and establish a level of trust before luring the victim into investing in a scheme of fraudulent cryptocurrency.

“I read the article, and it essentially described what was going on,” Plonski told ABC News investigative correspondent Aaron Katersky. “And then, you know, my heart broke.”

Plonski tried to withdraw his life savings, but a customer service agent told him he needed to pay a $10,000 deposit before he could withdraw his investment. After Sandy said he couldn’t help him, Plonski said he reported his loss to the FBI and cut off contact with Sandy.

According to the FBI, losses from crypto investment fraud rose from $3 billion in 2022 to $4.5 billion in 2023. During the first six months of 2024, the agency received more than 18,000 complaints reporting investment scams in crypto, with losses of more than 1.9 billion dollars.

“Pig slaughter is one of the most dangerous phenomena in the world going on right now,” said Erin West, the district attorney for Santa Clara County, California. “What we’re seeing are victims being forced into a situation where they end up investing in cryptocurrency and losing all their money.”

West, who was able to recover money from victims, told ABC News that scammers have “playbooks.”

“They know exactly how to talk to a 30-year-old software engineer, or a 50-year-old woman with two teenage boys, or a 70-year-old man who just lost his wife,” West said.

ABC-owned stations found victims across the country, including in Chicago, where one woman said she nearly lost $1 million.

“I had nothing left and I have to sell it all,” Erika DeMask told WLS-TV.

Officials told ABC News that scammers are “long haul” and will text and sometimes even FaceTime you for months or years until the individual has lost everything or realizes the investment is a scam.

“What we see people doing is we see them liquidating their 401Ks,” said James Barnacle, a senior FBI official. “We see them go to a financial institution and borrow money.”

“This has led to tragic situations here in the United States,” Barnacle added. “So not only are they losing everything, but they’re also choosing to end their life. It’s just a very tragic crime problem.”

Officials, including Barnacle, told ABC News that the crime does not only involve victims in the United States

Fraud compounds

An ABC News investigation found that the people who send the text messages can also be victims. According to the UN, in parts of Southeast Asia, Africa and South America, at least two hundred thousand people are trafficked and forced to attack people like Shai.

“What’s really unique about this trend is that it’s double-edged,” said Stephanie Baroud, a criminal intelligence analyst at Interpol. “There are two different groups of victims, those who are trafficked on one side, and those who are defrauded out of large amounts of money, on the other. And it’s true that victims on both ends of this trend have really dealt with a lot of repercussions.”

A United Nations report found that “dormitory-style rooms were built in compounds; training manuals for con artists were created; agents were hired to monitor trafficking victims; and mass recruitment of trafficking victims began.” Scam compounds are run by organized criminal groups, according to the UN report.

ABC News spoke with Sara, a 36-year-old woman who does not want to use her real name. Sara, who lives in South Africa, claims she was trapped in a scam ring in Myanmar for nine months after applying for a customer service job based in Thailand.

Sara told ABC News that she was interviewed several times for the job, and even bought a round-trip plane ticket to fly to Thailand through what she believed to be a legitimate company.

“It felt legit because every time I called them, they picked up,” Sara said.

But when Sara arrived in Thailand, she said she was driven in a car for hours and eventually put on a boat with armed men.

“It was really scary, because now if this is a job, why do we have gunmen,” Sara said.

Sara told ABC News that she was taken across the border into Myanmar and placed in a scam compound where she was given scripts and several phones to send messages to people like Shai.

“(One woman) said to me, ‘You’re going to be a con artist,'” Sara said. “I’m like, ‘What do you mean a con artist?’ Because you said I’m going to do a customer service job, I want to go home.”

Sara was able to leave the compound when a victim who had escaped months earlier helped pay her ransom.

Officials told ABC News that criminal groups are becoming more sophisticated and expanding to other parts of the world.

“This trend has really become a global crisis,” Baroud said. “And it just keeps getting worse.”

Officials say awareness is key

As scam compounds grow and scammers use new tools like artificial intelligence to target individuals for money, West told ABC News that awareness is key to fighting the scam.

“We really need to be wary of anyone who comes into our lives that we don’t invite into our lives,” West said.

“If it’s well crafted and comes to you at the right time, you might be surprised that you can actually fall for the scam,” Baroud said. “It’s important for any online user to be vigilant and really aware of any ad they’re clicking on, any very lucrative opportunities they’re seeing online.”

For Plonski and Sara, sharing their stories is their way of helping people become aware of the growing scam, they said.

“People are out here trying to connect, and they don’t know about it,” Shai said. “So I definitely thought that one way to turn this into something positive is to try to educate and prevent it from happening to other people.”

— ABC News’ Jason Knowles of WLS, KGO’s Melanie Woodrow and WTVD’s Diane Wilson contributed to this report.

Copyright © 2024 ABC News Internet Ventures.

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