Crypto scams enter the fold as fraud rises in Gillette

GILLETTE — In June, someone claiming to be Lt. James Davis with the Campbell County Sheriff’s Office contacted a Gillette woman, saying there was a warrant for her arrest.

The problem was that no one under that name and title works with the sheriff’s office, and the 62-year-old woman was scammed out of $1750 in Bitcoin the caller instructed her to send.

Almost two weeks before that, this fictitious Lt. Davis called a 76-year-old man in Gillette and told him that he had to pay a $3500 fine — in Bitcoin — for missing jury duty. The man sent the cryptocurrency to an account in Seattle before he realized what had happened.

More recently, a 20-year-old woman told police that a friend had messaged her, saying her Discord account was reported as a fake, and to contact a “representative” to dispute the report. She was scammed out of $2400 in Bitcoin.

Phone, online and other digital scams, particularly ones involving cryptocurrency transactions, have been on the rise in Gillette. 

Local crypto scams have become so common that police plan to hang signs warning patrons of the potential scam at a couple of in-store machines — crypto ATMs of sorts — from which scammers have directed victims to send cryptocurrency.

But even the crypto scams are just part of a larger increase in fraud executed through relatively new and emerging technologies, an increase local law enforcement has seen ramp up in the past year.

Everyday trouble

“We’ve gotten hundreds of cases, maybe thousands,” Police Det. Forrest Rothleutner said. “There’s not a day that goes by where we don’t have two or three different scam responses.”

Now the police are warning about a specific scam regarding cryptocurrency transactions. The new police signage comes as a warning about cryptocurrency transactions. Often these include a fraudster who calls and impersonates someone else, sometimes using names of real law enforcement officers, directing people to send money via cryptocurrency, including Bitcoin.

“Someone will pose as either a law enforcement officer or someone with a bank, anyone that sounds credible,” Police Det. Brendan Trujillo said. “They’ll either directly or go a roundabout way to gain their trust, then exploit them and try to find ways to get money out of them.”

Using this false sense of security, the scammer tells them that they have to pay, whether it’s for missed jury duty or a bench warrant. These are things that a legitimate law enforcement officer would never call to discuss, Trujillo said.

The scammer can take multiple routes in order to take money, and rarely is it in a legitimate way such as a check.

“This can be a credit card, or for them to go to the bank and withdraw money and go to a Coinstar machine and depositing it and transferring it into cryptocurrency,” Trujillo said. “They also do wire transfers, where they take cash from your bank account and transfer it to their bank account, whether that’s in-state or out-of-state.”

“We see a lot of Bitcoin, we see people being instructed to go to the Coinstar kiosks in Smith’s and Albertsons and we see people going to the Bitcoin machine in Common Cents,” Rothleutner said.

He and Trujillo both said that the demographic most often seen falling for these scams is the elderly or those who are not as familiar with how technology works. They’re the ones most likely to believe what they are hearing, especially over the phone.

However, these are not the only people who are affected.

“We usually see the elderly affected, but as time progresses, we see a difference; we see younger people falling for scams. We see the scams getting more sophisticated,” Rothleutner said.

Anyone can fall for these scams. They come in many different forms, including blackmail cases, online romances and false invoices. They can happen from anywhere, all from behind a screen.

An evolving threat

“The common methodologies have kind of evolved over the years I’ve been here,” Rothleutner said. “When we first started, a pretty common case for us would be a pop-up window showing up on someone’s computer. They click on it, it says, ‘Your computer’s been infected with a virus, this is the Microsoft support number,’ and by the means that they usually were tasked to go to the grocery store and get gift cards.”

Trujillo recounted a recent incident.

“We just had one [recently] where the bank manager called me and said, ‘Hey, I don’t know what’s going on, but something’s going on and I think she’s being scammed. Is there any way you can send an officer over?’” Trujillo said. “A patrol officer went over there and talked with them and found out that at one bank she withdrew money, went to Smith’s, and deposited that money for Bitcoin.”

According to the FBI’s Internet Crime Complaint Center, $12.5 billion was lost nationwide due to online scams, with more than $3 billion of national fraud losses last year credited to cryptocurrency-based crimes.

The majority of scam losses come from people 60 and up, totaling about $3.4 billion dollars nationwide. People ages 50-59 make up about $1.7 billion in losses.

Last year, Wyoming saw a loss of $13,746,109 last year from 828 complainants, according to CyberWyoming, which has logged information on cybercrimes in the Equality State.

Email is a scammer’s preferred method of reaching people in Wyoming, with phone calls the second most popular, according to CyberWyoming.

Extortion, tech support and non-payment/non-delivery were Wyoming’s top three crimes by victim count. Harbor Freight, Kohl’s, Norton and PayPal are among the top companies impersonated in Wyoming, based on CyberWyoming statistics.

Laura Baker, CyberWyoming executive director, said the demographics for cyber crimes depend on the crime itself.

“Tech support scams are in the top three for senior citizens, but employment scams and cryptocurrency scams are more often seen with millennials and Gen-Z,” Baker said.

Baker also said that cyber crimes are more likely to happen during and around holidays. These are the times when they are less likely to get caught.

“They do that because law enforcement is on high alert for other crimes, like for Fourth of July, fireworks,” Baker said. “Their staff is stretched thin, so it’s easier to get away with.”

How to protect yourself

The FBI complaint center made a report on the growing threat of cryptocurrency-based crimes, detailing the methods and motives of scammers, as well as how to stay safe.

Gillette police are also working to educate citizens on how not to fall for these scams.

The best thing to do if you end up in a potential fraud situation, Trujillo said, is to double check that all of the information is correct. Often, the scam artist uses a name or rank that has not been checked, or one who would not call in that situation.

“Let’s say, for example, they’re posing as a law enforcement officer with the sheriff’s office,” Trujillo said. “If you’re able to, ask, ‘Who are you again?’ What you can do then is end the phone call and have someone else call the sheriff’s office and clarify, ‘Do you have a person there with this name?’”

If it’s a situation in which someone is asking for money over the phone, then that person is not who they say they are, and should not be spoken to.

“No law enforcement agency is going to ask you over the phone for money,” Trujillo said. “That’s something that we don’t practice.”

“If law enforcement or government officials are telling you to make payments with cryptocurrency or gift cards, call your local police department,” Baker said.