Cryptocurrency and other investment scams are now the riskiest type of cons in the U.S., with crypto fraudsters frequently cheating their victims out of thousands of dollars, the Better Business Bureau said.

Scammers have found creative ways to cheat investors out of their money, the BBB said in its annual report about the biggest scams of 2023, which is based on 67,000 reports of scams.

About 80% of Americans targeted in crypto and investment scams last year lost money, the BBB reported. The median dollar amount lost was $3,800, "but many people lose much more than that" in crypto scams, said CBS News national consumer investigative correspondent Anna Werner.

Hackers use social media, video game platforms or text messages to contact people and brag about how well their doing financially because of a crypto investment. After the targeted victim replies, the conversation quickly turns into an ask, Werner explained.

"This is where the crooks pressure you to purchase, trade or store digital assets — such as cryptocurrency — on fraudulent exchanges," Werner said. 

Cryptocurrency is an unregulated investment space that federal regulators and consumer advocates have long said makes it ripe for fraud. Crypto's popularity exploded during the pandemic as some investors became curious about the craze and poured funds into bitcoin, ethereum, solana and other tokens.

Today the industry boasts a $2.65 trillion market cap, according to Forbes. 

While crypto has proved lucrative for many investors, it is not without its risks. Companies that were at one time considered legitimate have later imploded, such as FTX, once one of the world's biggest crypto exchanges. FTX melted down in 2022 amid an $8 billion shortfall in funds and allegations that former CEO Sam Bankman-Fried had taken customer money to prop up a struggling hedge fund.

Crypto investors have also reported losing billions of dollars due to hacks or scams. A 70-year-old California woman filed a lawsuit this year against Chase bank after she lost $720,000 to a fraudster in a crypto scam. 

Rounding out the list of top financial risks in 2023, the BBB named employment scams as the second riskiest con. That's when a scammer contacts a victim and convinces the person that they've been hired at a company and needs to complete employee information. 

In reality, the scammer is stealing someone's personal information. Victims lost a median $1,995 in employment scams last year, the BBB said. 

Online purchase scams were the third riskiest, according to BBB. Victims typically log onto a phony website to purchase an item but a scammer doesn't deliver the product. The BBB said victims lost a median $71 in these type of scams last year. 

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🚀 The early 2000s witnessed one of the most significant financial scandals in India’s history, known as the Stamp Paper Scam or Scam 2003. This scandal, orchestrated by Abdul Karim Telgi, involved the counterfeiting of stamp papers and postage stamps, resulting in a massive fraud amounting to billions of rupees. It exposed severe loopholes in the Indian financial and administrative systems and shook the nation’s trust in its institutions.
Background of Abdul Karim Telgi
Abdul Karim Telgi, born in Karnataka, started his career as a fruit vendor. His journey into the world of crime began with minor illegal activities, eventually leading him to the lucrative business of counterfeit stamp papers. Telgi capitalized on the weak enforcement and monitoring systems in place within the government’s stamp paper production and distribution sectors. Over time, he built a vast network that facilitated the large-scale production and distribution of fake stamp papers across multiple states in India.
The Modus Operandi
Telgi’s operation was intricate and sophisticated. He managed to infiltrate the Nashik Security Press, a government facility responsible for printing various secure documents, including stamp papers. By bribing officials, Telgi gained access to the machinery and raw materials required for producing authentic-looking stamp papers. These counterfeit documents were then distributed through a network of agents to various states, including Maharashtra, Karnataka, and Gujarat.
The fake stamp papers found their way into the hands of banks, insurance companies, and other financial institutions, which used them in legal transactions. This widespread circulation caused significant financial losses to the government and private entities, with estimates suggesting the scam could be worth around ₹20,000 crores (approximately $3 billion).
Discovery and Investigation
The scam came to light in 2002 when police in Bengaluru seized a truck loaded with fake stamp papers. The investigation soon revealed the vast extent of Telgi’s operations. A special investigation team (SIT) was formed to delve deeper into the case, uncovering layers of corruption and complicity within the system. High-ranking police officers, politicians, and bureaucrats were found to be involved, either directly or indirectly, through bribes and favors.
The investigation faced numerous challenges, including threats to officials and witnesses, tampering of evidence, and systemic corruption. Despite these hurdles, the SIT managed to gather substantial evidence against Telgi and his associates.
Legal Proceedings and Convictions
Telgi was arrested in 2001, and subsequent investigations led to the arrest of several other individuals involved in the scam. The legal proceedings were lengthy, given the complexity of the case and the involvement of numerous high-profile individuals. In 2006, Telgi confessed to his crimes in court, expressing remorse for his actions.
In 2007, a special court convicted Telgi and sentenced him to 30 years of rigorous imprisonment along with a hefty fine. The court also convicted several of his associates and government officials who had facilitated the scam. The judgments were seen as a significant step towards restoring public trust in the legal system, though the damage caused by the scam was irreparable.
Impact and Reforms
The Stamp Paper Scam of 2003 had far-reaching implications for India’s financial and administrative systems. It highlighted the need for stringent monitoring and enforcement mechanisms to prevent such fraudulent activities. In response, the government implemented several reforms to enhance the security and integrity of stamp paper production and distribution.
One of the key measures was the introduction of e-stamping, an electronic method of paying stamp duty, which significantly reduced the risk of counterfeiting. Additionally, efforts were made to improve the accountability and transparency of the officials involved in the process.
Conclusion
Scam 2003 stands as a stark reminder of the vulnerabilities within financial systems and the extent to which corruption can undermine public trust. Abdul Karim Telgi’s audacious operation not only defrauded the nation of billions but also exposed the deep-rooted corruption within its institutions. The subsequent legal actions and reforms were essential steps towards addressing these issues, but the incident remains a cautionary tale for vigilance and integrity in governance.
The legacy of the Stamp Paper Scam continues to influence policies and practices in India, ensuring that such a massive breach of trust and legality is not repeated.#ScamReport #Scandal #CPIAlert #CryptoPCEWatch