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FBI warns of cryptocurrency scam in Northwest Arkansas

by Tom Sissom | August 1, 2022 at 1:00 a.m.
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FAYETTEVILLE -- FBI officials in Arkansas say cyber criminals have begun targeting victims in a scam involving home computers, a threatened breach of Social Security accounts and cryptocurrency.

"We are seeing an uptick in this sophisticated play on an old scam," Kevin Corlew, supervisory special agent with the FBI, said in an interview.

"The victim will get a pop-up on their computer telling them a virus has been detected and to call this number," Curlew said. "If they call, they're told their computer has been hit by viruses and they're the victims of identity theft and need to be issued a new Social Security account."

Curlew said once the scammers have a victim on the line, they're told an official from Social Security is going to call them. The scammers then "spoof" a number making it appear to be from the Social Security Administration and tell the victim they need to close all their bank accounts and transfer their money to bitcoin.

"Several victims have called in to say they've lost hundreds of thousands of dollars of their life savings," Curlew said. "They go to the bank and transfer their money to bitcoin and deposit it in a wallet. If we can be notified within a few hours, 24 hours at the most, there's a chance we can recover the money, but if too much time goes by it's almost impossible."

Curlew said the growing popularity of cryptocurrency made it almost inevitable people involved in this kind of criminal activity would incorporate it into the scams.

Local law enforcement agencies said they receive reports of similar schemes, but the use of cryptocurrency is new. The Fayetteville Police Department has received at least one such report, according to Sgt. Anthony Murphy, public information officer for the department.

Murphy said the department advises people to be cautious of anyone who contacts them by phone claiming to be from a government agency and asking them to provide information or money.

"Social Security would not call someone and ask for funds," Murphy said. "If you have suspicions, hang up and call the entity they claim to be calling from. Use common sense. If it seems off, it probably is."

Veronica Taylor with the Dallas Region public affairs office of the Social Security Administration said the agency has recently posted warnings of impersonation scams.

"While scammers primarily use telephone calls as part of their scam, they may also use email, text message, social media, or U.S. mail," Taylor said. "They pretend to be from Social Security and will say there is a problem or a prize. They also try to pressure individuals to act immediately."

"Generally, if an individual does not have ongoing business with SSA, it is unlikely we will call," she said. "If a person receives a suspicious call claiming to be from Social Security, they should hang up and report it to our Office of the Inspector General."

"The most effective way to defeat scammers is to know how to identify scams," Taylor said. "Individuals should just hang up on any call they are uncertain of and ignore suspicious emails. Scammers are always finding new ways to steal money and personal information by exploiting fears."

"One common tactic scammers use is posing as federal agents and other law enforcement," Taylor said. "They may claim a Social Security number is linked to a crime. They may even threaten to arrest the individual if they do not comply with given instructions. The recipient of the call should just hang up. If an individual owes money to Social Security, we mail them a letter explaining their rights, payment options, and information about filing an appeal on the decision."

According to information from the FBI, criminals offering fraudulent cryptocurrency investment services have become common enough to prompt the agency to issue a warning to investors. According to the FBI, the bureau has identified at least 244 victims of this kind of fraud, with losses put at more than $42.7 million.

Curlew said anyone seeking more information or needing to file a complaint can go to to the FBI's Internet Crime Complaint Center at IC3.gov or call the Little Rock office at (501) 221-9100.

"The faster we learn about these scams the more likely we are to have success," he said.

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Scam prevention tips

The Social Security Administration says there are ways to identify and avoid being the victim of a scam call.

Remember the Social Security Administration will never:

Threaten benefit suspension, arrest, or other legal action unless a fine or fee is paid.

Promise a benefit increase or other assistance in exchange for payment.

Require payment by retail gift card, cash, wire transfer, internet currency or prepaid debit card.

Demand secrecy in handling a Social Security related problem.

Send official letters or reports containing personally identifiable information via email.

Source: Social Security Administration, Office of the Inspector General

 


Print Headline: FBI warns of cryptocurrency scam in Northwest Arkansas

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