‘Don’t try to escape’ — Inside the shadowy world of crypto ATM scams

The email looked like a surprise charge of nearly $500 from Best Buy, along with a customer service line to help with any questions.

The man who answered the line quickly acknowledged the charge was a mistake and promised a refund.

But as he worked to resolve the problem, he announced in a shocked voice, his company accidentally refunded thousands of extra dollars. The only fix, he said, was for the caller to urgently return the money through a crypto ATM – a machine that converts cash into cryptocurrency.

It all sounded extremely confusing and vaguely convincing.

But the man on the phone was no Best Buy customer service operator – he was a scammer.

And the caller was no unsuspecting victim – she was a CNN reporter who had deliberately called the line to see how these schemes operate.

When the reporter confronted the man, he dropped his cover story and openly talked about how much he and his colleagues have been swindling from victims: “Like a couple million dollars a month,” he said.

Welcome to the shadowy world of crypto ATM scams.

These hoaxes, in which unwitting victims are tricked into sending con artists their savings through crypto ATMs, have risen exponentially in recent years. The FBI received nearly 11,000 crypto ATM scam complaints last year, totaling about a quarter billion dollars in losses – an amount on track to potentially double this year.

How are so many Americans falling for these hoaxes and handing over hard-earned money?

To answer that question, CNN reviewed more than 700 police reports and consumer complaints compiled since last year, interviewed dozens of victims and detectives who have investigated the cases – and even called scammers directly.

The reporting revealed how scammers pose as trusted experts, authorities or romantic partners, and then pummel victims with layers of lies that overwhelm their emotions, impede their judgement and push them to act in ways that appear irrational in hindsight.

The scammers use crypto ATMs – tens of thousands of which are in gas stations, smoke shops and other stores across the country – as a convenient tool. After the ATMs turn cash into cryptocurrency, scammers can rapidly transfer the loot to anonymous digital wallets all over the world – often in places where it’s nearly impossible for police in the US to recover.

“These things are almost designed to be just perfect instruments for… scams,” Tim Schwering of the Spokane, Washington, police department said of crypto ATMs. “You can have someone’s life savings wiped out very quickly.”

A CNN investigation revealed how the companies profit by often marking up the price of cryptocurrency on transactions, including the illicit ones, and often fail to refund money to scam victims.

Crypto ATM companies strongly dispute that they profit from scams and say they have invested in layers of protection to try to prevent consumers from being scammed on their machines, such as on-screen warnings and systems for detecting and blocking suspicious transactions. The companies generally require that users only send funds to crypto wallets they control.

Police records vividly illustrate the range of cover-stories scammers use to trick victims, who on average lost about $16,000 in cases CNN reviewed – though some have been conned out of much more.

In one instance, a scammer posing as Hollywood star Jason Momoa pretended to fall in love with a Florida woman, sending her videos of luxury goods and describing plans to marry in Hawaii. She lost about $250,000, sent through a crypto ATM and other platforms. After finally going to police, she told investigators she only had a few hundred dollars left and faced eviction.

In another incident, a scammer pretended to be a Wells Fargo employee – fooling a woman in her late 70s into depositing about $130,000 into a crypto ATM over several weeks. She passed away months later, her niece told CNN.

While the plots may seem farfetched, victims say the scammers are masters of manipulation.

Criminals can use personal data – posted on social media or exposed in hacks – to gather enough information on their targets to sound legitimate, said Daniel Simons, a psychology professor at the University of Illinois Urbana-Champaign who has studied scams.

“All you need is a bit of information to make it seem plausible,” Simons said. “We tend to assume that other people are gullible, but we are all subject to scams if they’re targeted the right way.”

Psychological manipulation

When Debra Bush of Waterford, Michigan received an alert that claimed her computer had been hacked last June, she called a number claiming to be Microsoft support. The woman who answered her call meticulously explained how Bush’s bank account had been breached and used to try to purchase pornography in China.

“I’m like, what? I’ve never even looked at pornography much less bought it,” Bush said. “I’m not gullible, but I fell hook, line and sinker for this.”

To make the con more realistic, the first scammer transferred Bush to another person – a “Chase Bank” worker, who eventually directed Bush to deposit a total of $52,000 into crypto ATMs – supposedly into her own accounts. In fact, the money was quickly transferred into inaccessible crypto wallets.

Now, Bush said she works extra hours in a sales job to try to recoup some of the losses.

“I’m in my mid to late 60’s. I can’t make that up. I don’t have that many working years left,” she said.

In addition to fake alerts, criminals often use phony bills, spoofed webpages and fabricated government documents to gain their victims’ trust.

But despite a veneer of believability, they often contain telltale signs of fraud.

One scammer sent a victim in Kansas a photo of a Federal Trade Commission “special agent” ID card. It looked realistic enough to trick the victim into pumping $22,000 into a crypto ATM.

But a quick internet search reveals the man’s face on the card is actually a local police officer who made headlines and sparked protests over a fatal shooting in Atlanta in 2020.

Some scammers also try to scare or shame their targets into compliance.

“Don’t try to escape from this,” one scam email obtained by CNN states. The message suggested a recording of the target looking at porn would be widely shared unless he paid up. “The video is straight fire, and I can’t even fathom the embarrassment you’ll face when your colleagues, friends and fam check it out,” the message states.

Scammers also frequently pose as members of law enforcement. In May, someone posing as a US marshal referenced the Trump administration’s Strategic Bitcoin Reserve to allay a victim’s concerns about stuffing thousands of dollars into a crypto ATM.

Last November, scammers threatened another woman in Georgia that she would be arrested unless she paid a fee. She deposited $7,000 into a crypto ATM and then crashed her car as the scammers hounded her to deposit more, according to an incident report.

Scammers disproportionately target the elderly – but no demographic is exempt. Some victims have even worked in jobs that would seemingly make them difficult to trick. One victim told police she had worked in the criminal division of the IRS before a scammer robbed her of $1,200 through a crypto ATM.

Some calls last for hours as criminals try to isolate their victims – sometimes by threatening them. One woman in Florida told police she stayed on the phone with scammers for more than 36 hours as they continued “terrorizing her with messages, phone calls, and even threats,” according to an incident report.

Local authorities have described the experience of responding to scams in progress as akin to freeing people from captivity.

“For many of the victims caught in these scams, it will feel like they’ve been kidnapped for that time period,” said Nathan VanCleave, a financial investigator with police in Evansville, Indiana. “I’m here to wake you up out of this and bring them back to freedom and reality, a reality where they have lost all their money.”

The cons frequently work because people generally believe what they hear, according to Christopher Chabris, a cognitive scientist who has studied the phenomenon. He referred to this as the concept of “truth bias” in which “incoming statements, claims or information are automatically treated as true until proven false.”

Chabris said crooks act like “magicians” who take control of what their victims do and do not notice. This is why they try to keep victims on the phone and don’t want them to contact friends or family.

“They want to be the source of all the information coming into your brain,” Chabris said.

Who are the scammers?

Even if police respond quickly – sometimes interrupting a victim as they stuff cash into a crypto ATM – they rarely can recover the stolen funds.

In part, that’s because criminals often transfer money abroad to places less likely to cooperate with US authorities.

As one investigator from a Georgia police department tracked about $25,000, he found the stolen funds flowed to accounts associated with India, Nepal, Kyrgyzstan and elsewhere. “I had no further avenues to recover his currency,” the investigator wrote in a case report.

Criminal groups have established entire compounds largely devoted to scams in parts of Asia and Africa, according to law enforcement, researchers and CNN reporting. Some of these organizations have call centers with laborers who contact victims and offices with developers who create scam software.

The Department of Justice announced on Tuesday the seizure of about $15 billion worth of Bitcoin that prosecutors say is tied to an operation of forced-labor scam compounds across Cambodia.

A grand jury indicted two citizens of India in December for allegedly using tech-support schemes to defraud elderly Americans, at least one of whom was directed to deposit about $80,000 in crypto ATMs, according to court records.

Those defendants were arrested in the US but one fled the country on a flight to Istanbul when he was out on bail, prosecutors stated in September. They described the other defendant as “a high-level member of a sophisticated, organized, transnational fraud ring.” The case, much of which is sealed, remains pending.

Federal investigators also often find it difficult to make headway. After a Colorado couple was scammed out of about $38,000 through a crypto ATM, a Department of Homeland Security investigation uncovered the “involvement of a large crime ring with origins in Singapore,” according to court records filed in 2023. No charges were filed because “the suspects are unidentifiable persons in a foreign country,” the filing notes.

In order to directly hear how scammers operate, CNN reporters dialed the phone numbers on apparent scam emails that appeared to be bills for tech support. The reporters did not immediately identify themselves as journalists.

The people who answered the calls had foreign accents but insisted they worked for major companies based in the US, like Best Buy and Bank of America.

The con artists had reporters download apps that enabled the scammers to control their computers and phones, made ominous threats about hacked information, and tried to convince the reporters to log into their personal bank accounts.

They took pains to mimic real call centers by working in teams, with fake low-level tech support workers transferring calls to apparent managers – complete with background hold music.

“I’m transferring this call to my senior security adviser from the fraudulent department,” said one scammer who introduced himself as “Max” to a CNN reporter. Another man named “Mark” then picked up and said, “There’s some suspicious activity going on your Bank of America account.”

When one scammer learned that a reporter was not going to follow instructions to transfer thousands of dollars out of a bank account, he became enraged, called the reporter a “son of a prostitute” and ended the call.

In the case of the scammer who pretended to work for Geek Squad, the scammer tried to coerce a CNN reporter to withdraw nearly $10,000 from a bank and then send the money to him through a crypto ATM.

When the reporter confronted the scammer and asked whether he cared about people being robbed of their life savings by crypto ATM schemes, he dropped his cover story and briefly apologized.

“I’m sorry about that,” the scammer said – and then quickly hung up.