There may be errors in spelling, grammar, and accuracy in this machine-generated transcript.

Caleb Newquist: These days we more or less take online scams for granted. We all get the text messages, social media DMs, and for ages now, emails that are trying to trick us into sending money to a cybercriminal. But some of us are old enough to remember a time before the internet, or at least a time when the internet was very new, when you could tack onto the end of just about any business name. And that was enough to create a buzz and raise millions of dollars from investors. It was the first internet bubble, and it was a [00:00:30] big one. If you're around in the early 2000, you remember the first internet era market crash. Companies like Pets.com, Webvan, and Boo.com are infamous names, even punchlines today. But in the multiyear run up to the stock market bubble that peaked in March 2000, these were high flying companies that were part of the hype at the dawn of a new era of innovation. And it was around this time that a different kind of innovation was taking flight as well. Criminal [00:01:00] innovation.

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Caleb Newquist: Hello and welcome to Oh My Fraud, a true crime podcast where victims get hacked to bits, but only in a digital [00:01:30] sense. I'm Caleb Newquist. Hello. Nice to see you all. How's it going? Uh, what's going on? Oh, I, I just got back from the new Jersey show. Uh, the new Jersey society of CPAs convention, where Greg and I gave one of the keynotes, and, man, it was it was so fun. It was. It was really great. Uh, the the new Jersey CPA, uh, the new Jersey CPAs in general are a fun bunch of people. They're very nice. And [00:02:00] the team over there, like Don Meyer and Angela Russo and the rest of their team, they're great people. And they were very welcoming and, and and they were they were very happy with how it went. And so if they're happy, then we're happy. But yeah, we did. We did our little spiel in the Music Box Theater at the Borgata Hotel. If you know that hotel and casino in Atlantic City. And it was great. Uh, the sound crew were total pros and nice guys. They get bunch of shows [00:02:30] in there, and so they were nice to talk to. And we did it like at 9:00 in the morning, which was great because then we were just done for the rest of the day. Um, Gene marks, who a lot of people may know, he writes all over the internet. He went on before us. I had never met him before, but he's a regular on the CPA kind of speaking circuit, and he's a really nice guy, and he's done that new Jersey show.

Caleb Newquist: He said, I don't know, like 3 or 4 times. And he went, he was on at 8 a.m. so he was on before us. And then so but [00:03:00] we were all there kind of at the same time. And Greg and I, we just got miked up and then we hung out in the green room until it was our turn. And then our, our mutual friend John Garrett came in, who you may have heard of John, but he's another speaker who used to be a CPA. And both Greg and I have known John a long time. Uh, he's an incredibly funny guy, and he's done, um, he's been he's been on the speaking circuit for a while. He wrote a book called What's your and and he gives presentations on, on [00:03:30] that. And, um, it was great. It's great to see him. I hadn't seen him in a while. He used to live in Denver, but he moved to Fort Collins. He's got a kid now, so, like, you know, he's got a life, you know? But anyway, it was fun to see him, and the crowd was great. And so when we finally went on, Greg came in super hot, which, you know, of course he always does. And he went long, which he always does, which was fine. It was fine.

Caleb Newquist: No judgment. He was doing great. He's always, you know, he's. Greg is always great. Um. And I can handle it. I've done enough of these [00:04:00] things where that's just. That's just how it goes, right? And we kind of did this, you know, trio of greatest hits. We did the polygamous fraud. Greg spoke of that. That one. That's episode 40. And then I did The Very Nice Lady, which is a favorite. Uh, and that, uh, is episode 46. Then we split the Sheriff of Frodingham episode, and that was episode 76. And that kind of wrapped things up. And, you know, I don't know why we tried to do three stories in an hour [00:04:30] long presentation because it was too much. And we were talking about that a little bit. Uh, and that's why we went long. Part of the reason we went long was all right. The crowd was into it. Lots of laughs. Uh, Greg and I had a great time. Lots of fun. And then we were done, and we hung out with John for a little bit afterward. And then Greg and I hung out the rest of the day. We basically hung out for two days, and, uh, and and he didn't say hello, but I'll say hello for him. And he's doing great. And, you know, we had some great conversations, [00:05:00] uh, ate some good food, smoked a cigar, you know, quality time. Quality time. Uh, thanks again to the people at new Jersey society, Don Meyer, Angela Russo, everyone else on their team, really nice people.

Caleb Newquist: Uh, and like I said, they were happy with how it went, so hopefully they have us back. Also, I'll just mention if you need a live or virtual presentation on fraud or ethics, then you should have Greg and I come do that because, uh, it it'll it'll turn out very good. Email [00:05:30] fraud at ecom to get more information on pricing and availability. All right. Okay, that's enough business. Now it's time for some fraud. In May 2000, after several years of increasing complaints, the Federal Bureau of Investigation launched the Internet Fraud Complaint Center as a pilot project [00:06:00] with the National White Collar Crime Center. It soon became known as the Internet Crime Complaint Center, or IC3 for short. You know, rebranding acronyms. Nobody can live without them, apparently. Anyway. In its first full year, the IC3 had 49,711 complaints. That's roughly 136 per day. Okay. And at that time, most [00:06:30] frauds were they fell into one of three buckets. Internet auction fraud. Okay. Remember, eBay was very popular. So that included, like non-delivery nonpayment or phishing. And then there were just general non-delivery scams. So e-commerce was of course going crazy. And you know, you order something and it doesn't show up. Uh, and then finally, uh, the Nigerian prince scams. And if you're a regular listener of [00:07:00] the show, you know that Nigerian princes weren't really a new scam. They're just a new twist on a very, very old fraud, the advance fee scam.

Caleb Newquist: And we just talked about that in episode 85, a very rich history. The advance fee scams. So check that out if you want to know more. But as internet crime evolved and became more widespread, law enforcement did its best to adjust and evolve to keep up with it. By 2019, spoofing data breaches, ransomware, [00:07:30] romance and business email compromise frauds, just to name several were all pretty well known internet based scams. And people were falling victim to these consistent media coverage of the victims, and their stories became easy fodder on both national and local news. So with the increase in these types of frauds and the coverage of them, the total number of complaints logged with IC3 has grown very quickly over time. By [00:08:00] June 2007, the IC3 had received a total of a million complaints since its inception. So it only took seven years for the number of complaints to reach that number. But the next million only took three years. Then, in March of 2020, the total number of complaints reached 5 million, and in the most recent report, released in April of 2025, the number of complaints the IC3 has received since its inception [00:08:30] has grown to over 9 million. It took 20 years for the number of complaints to reach 5 million. It only took another four years for it to nearly double. This 25th edition of the Internet Crime Report has some pretty sobering statistics from the last five years.

Caleb Newquist: Here's just a handful of those for the years 2020 through 2024. The [00:09:00] IC3 has received an average of 836,000 complaints a year. Remember how I just said in 2000 it was about 136 per day? That number is now more than 2000 2000 complaints per day. Over the last five years, there have been more than 4 million complaints and over $50 billion in losses. The number of complaints was nearly 860,000, with losses of $16 billion in 2024 alone. That was an increase of one [00:09:30] third from 2023. More than 250,000 of the complaints resulted in an actual loss, and the average loss was over $19,000. Here's something else from the report that's interesting, even if I don't quite understand it. States that 83% of the losses were due to cyber enabled fraud. Now, cyber enabled fraud is defined as criminals using the internet or other technology to commit fraudulent activities. That's [00:10:00] that's what the report says. And so in case you've forgotten or missed it, this report that is put out by the FBI is called the Internet Crime Report, and it is issued by the Internet Crime Complaint Center. And so, again, I don't know if I'm missing something, but I'm a little surprised that the amount of cyber enabled fraud in the Internet Crime report issued by the Internet Crime Complaint Center is anything less than 100%. [00:10:30] There's probably some nuance that I'm missing. Someone smarter than me can email me and explain it.

Caleb Newquist: But anyway, the report has lots of findings that really aren't that surprising. For example, the top three states for both complaints and losses are California, Texas and Florida. This isn't surprising because these are the three largest US states by population. So there's more people to scam. And naturally, that means there's more people that will fall for a scam. Also [00:11:00] not surprising if you follow these things is that the most common way funds are lost in a fraud are number one cryptocurrency followed by ACH wire transfer. Okay. And the most popular crime types include phishing, slash spoofing, extortion, and personal data breach. Okay. But the amount of money lost is led by investment scams. Then business email compromise [00:11:30] and then tech support and data breach were in a dead heat for third. But investment scams is by far the largest losses, like 6.5 billion in in 2024, which is, you know, more than a third. And just as how people are defrauded isn't a surprise, who those people are, who the victims are is probably even less surprising. Our [00:12:00] elders, we're supposed to respect them, right? Yeah. There are lots of lots of good reasons to Revere and respect one's elders. Uh, not least of which is that they've been around. They have more experience. We should listen to them. And and so that we don't, you know, so that we can learn and not make the same mistakes. You know, um, when you're young, you take all that for granted.

Caleb Newquist: And so, you know, it's just it's just one of those things that I think you [00:12:30] don't really understand it until you start getting older, and then you're like, oh, yeah, I should be. I should listen to people who've been around longer than me. Anyway, there's this great line from a movie, uh, that I hope I get to use one day. Uh, it's from the way of the gun, which I don't know. I don't know how popular it really was in its time, but it's this neo noir neo western film with Benicio del Toro and Ryan Phillippe, Juliette Lewis. It has a whole lot, a whole lot of fun people in it. Sarah Silverman [00:13:00] has this small role right at the beginning, and it's completely unforgettable. It's amazing. Anyway, the line I remember came from this other character. It was an old bag man played by James Caan. Uh, may his memory be a blessing. He says this line to a younger guy, played by Nicky Katt, who also just died. Um, Nicky, Kat's character, you know, is also a bag man, does these morally dubious things for a living, just like James Caan's character. But he resents this older guy. He doubts [00:13:30] and disrespects his abilities and his his worth. And at some point, James Caan, he says to this guy, the only thing you can assume about a broken down old man is that he's a survivor. And I just love that so much.

Caleb Newquist: And, you know, he's like, you think you're a badass. Well, I'm still here, and you're not going to be very much longer. And because it's James Caan, he just delivers it in this very calm, understated, menacing way. And it's it's great. But [00:14:00] I digress. Our elders, they deserve our respect for many reasons. But here in America, I probably think it's safe to say that they garner a lot of respect for a reason that you might necessarily immediately think about. And that is they have all the money. So the data from the Federal Reserve tracks all this, if you're not familiar. But, um, data from the Federal Reserve shows that of the $160 trillion in household wealth in the United States, [00:14:30] people over 70 have 50 trillion of that dollars. That's 31%. People age 55 to 69 C9 have 67 trillion, which is nearly 42% of the wealth. So together, nearly three quarters of the wealth in the United States is held by people 55 and over. There you go. That that'll be on the test, I'm sure. Anyway, and because they have all that money, they are [00:15:00] a chief target of fraudsters. If you're in the business of ripping people off, I don't know why you would waste your time with good looking young people. The the vast majority of them don't have any money and they won't have any money until they're old, so forget them, you know? So yes, the IC3 report dedicates a special section to elder fraud and the complaints that are filed by people who are 60 years old and above. [00:15:30]

Caleb Newquist: So some quick facts about these victims. Over 60. They logged more than 147,000 complaints. They had over $4.8 billion in losses. That's an increase of 46% in complaints and 43% in losses from 2023, and the average loss was $83,000. Also, investment scam losses have almost doubled from 2022 [00:16:00] to 2024. Losses from crypto schemes have nearly tripled during the same time. The report has a chart that shows in 2018 that reported losses were only around $500 million. That means with losses of more than 4.8 billion in 2024, that they've grown nearly tenfold in just six years. And [00:16:30] speaking of crypto, the report has a special section dedicated to that to cryptocurrency fraud. Perhaps no surprise was big in 2024. There were 149,000 complaints. That's an increase of more than 100% from 2023. $9.3 billion in losses. And that was a 66% increase in losses. And yes, [00:17:00] as you might expect, people over 60 were most likely to be victimized. Now, as far as I can tell, because the report wasn't exactly clear, but crypto is more or less a blip. As recently as 2017. Then in 2018, complaints started coming in hot, reaching nearly 40,000. Uh, but losses didn't start growing for a bit, only eclipsing 1,000,000,000 in 2021. But from there, it's [00:17:30] been like a rocket ship. The chart goes up and to the right, and definitely not in a good way.

Caleb Newquist: An interesting note about the number of complaints, the most that most of these complaints are from extortion attempts beating out investment scams. But in losses, investments were by far the largest, over 5.8 billion. Okay. And I just have to say, what's slightly weird about this is that it seems if for these extortion [00:18:00] scams, you know, it used to be that scammers would, you know, ask you to go out and buy gift cards and stuff. And that was their preferred, you know, form of payment. But apparently crypto has kind of replaced that. Again, you know, really hard to trace and irreversible transactions being uh, some, some, some key features there. But also I think the investment scams are a little surprising because I'm, I don't know, I just I'm frankly surprised that there's so many people [00:18:30] over 60 who are interested in investing in crypto. I mean, I have, I have I have a small investment in crypto. Very small. Uh, and it's a it's a legit coin. Uh, but it's it's a very small amount of money. I don't think Greg has ever invested in crypto. I don't think Zach has ever invested in crypto. And, you know, we're both we're all under 60 and we have very little exposure to this. But somehow, I [00:19:00] don't know. The people are dreaming big, big, big crypto riches. People are are trying to chase I guess. And so crypto fraud is of course going gangbusters, especially against older folks.

Caleb Newquist: But really, none of us are safe. You know, we're all we're all one wrong turn from, you know, sending a bunch of crypto to someone we don't know. If [00:19:30] there is a silver lining in this report, and this might be cold comfort, if I'm being honest, it's that the FBI is is taking steps to salve the wounds of all this internet crime. They even have a dedicated team, the IC3 Recovery Asset Team. Yes, that is rat. But you know, whatever they can rebrand that to maybe. Anyway, uh, they work on streamlining communication [00:20:00] with financial institutions to help, uh, this is how they describe it, quote, freezing of funds for victims of fraudulent domestic and international transactions via the financial fraud kill chain. Whatever that is. I mean, it's it's more or less, you know, the the financial chain between banks and the other intermediaries, I suppose. Anyway, you know, the expression closing the barn door after the horse is out? Well, it sounds like the recovery [00:20:30] asset team's main job is to close the barn door just a little faster in 2024. The financial fraud kill chain worked over 3000 complaints that consisted of $828 million in theft. And they managed to freeze about $570 million. That's a success rate of about 66%. So two thirds. Now, $570 million is not a lot of money compared to total losses of 16 billion. But [00:21:00] it's not nothing. I'm sure the people who's about to be stolen money that was frozen just in the nick of time, I'm sure they're very grateful.

Caleb Newquist: I would be. There's other efforts, too, from the FBI. One of them is called Operation Level Up. This is a new program that identifies victims of crypto schemes. So pig butchering scams very common. We discussed one in episode 64 that involved a bank in Kansas. Operation Level [00:21:30] Up uses, quote unquote, sophisticated techniques. Don't ask me what those are. The FBI identifies victims who are actively being defrauded and promptly intervenes by calling those victims directly. This operation notified more than 4000 victims, 76% of whom didn't know they were being scammed, and they saved about $285 million. 42 victims were even referred to the FBI victim specialists for suicide intervention. [00:22:00] So that's real shit, right? Good stuff. Saving people's lives. Good. Good thing there are other wins, too. Uh, they busted a big call center in India with the assistance of Indian law enforcement. They also took down a website that sold remote access Trojan malware. It's another Rat acronym for you. But if you don't know what rat malware is, it's this nefarious program that allows scammers to connect to victims computers remotely, [00:22:30] browse files, take screenshots, steal usernames and passwords. You can even record keystrokes with this stuff and watch victims through webcams. So yeah, it's pretty nasty and creepy stuff. Anyway, fun side note about this malware bust. Investigators arrested two guys associated with this. One was Daniel Meli, 27, of Zabbar, Malta, and the other was a guy from Nigeria named.

Caleb Newquist: I am not making this up, Prince. Yeah, [00:23:00] they busted a Nigerian dude named Prince. Now there is nothing I could find that indicated that this guy was an actual Nigerian prince. So speaking for myself here I am totally sold that this Nigerian guy's name is Prince and that is excellent. I really enjoy that it's the best. But because this was an FBI report, you know, they don't necessarily [00:23:30] call attention to the irony. And, you know, I guess that's what you listen to this podcast for anyway. So, uh, what did we learn? Uh, man. What didn't we learn? Uh, there's lots of, you know, facts and figures and anecdotes and honestly, it's it's quite overwhelming. So I'm not going to rehash all that stuff. You know, even for the accountants, I think the numbers make your head spin after a [00:24:00] while. Uh, aside from that, let's let's talk just a minute about how not to get scammed. Because while some fraudsters are sophisticated, a lot of them are just plain this big numbers game, counting on just a small number of us to be rushed, distracted, or a little too trusting when we're, you know, bebopping around the internet. So here's a quick checklist to keep yourself from being a victim to one of these online scams that this [00:24:30] IC3 report covered. Number one, don't give out your password to anyone. Not over email, not over text. Not your coworker.

Caleb Newquist: Not to the person who says they're from it and they just need it to reset the system. Enter that shit yourself. Your bank will never ask for it. Your employer shouldn't ask for it. Anyone who does is either lying, ignorant, or incredibly, incredibly irresponsible. Okay, two if you get a weird email, check the email [00:25:00] address, not the name it displays. So if the actual address is supported paypal.com that is fine. Support at PayPal One.com is a creep in a basement trying to ruin your day. Third, if you get an urgent message telling you to click a link right now or risk account suspension. Just take a beat. Don't click on the link. Mouse over it. Does it go where it says it does? If [00:25:30] not, again, don't click it. Go to the site directly and log in from there. And if you're ever unsure, just don't click on it. It's allowed. You do not have to click on things. Just because they're linked doesn't mean you have to click on them. Lots of things around the internet say click this link. You don't have to. Totally optional. In fact, it's advisable that you not. Okay. Fourth. The same goes for texts or phone calls. Voicemails about suspicious charges. Don't respond to the message. Don't call or [00:26:00] text back. Delete the message. Report it as junk and go on with your day. If you must, look up the official number for your bank or credit card or whatever that looks familiar to you, and says that you need to call them immediately.

Caleb Newquist: Get the actual number from a website or someplace. You're not being paranoid. You're not being paranoid. You're being responsible. Okay, some of us are being paranoid, but still you are paranoid. You're. You're a paranoid, responsible [00:26:30] person. That's what you are. Lastly, please, for the love of all that is 64 bit encrypted, turn on two factor authentication for everything. Yes, it's annoying, but it's worth it. Okay, two factor authentication. The internet is full of traps, and unfortunately, the people laying them are often really good at what they do. But they're also lazy, and most of the time they're just looking for an easy target. Don't [00:27:00] be the target. Don't be that target. Something else. The annual internet crime report was a new thing to me. I mean, I've been doing this podcast, you know, for that long, but I've been around long enough to think maybe I would have come across it. Nope. Haven't come across it. And it's been around for 25 years. I mean, maybe some of you have heard of it, probably a few of you. But it's kind of crazy that the chief law enforcement body in our country, they have this report about online [00:27:30] fraud. And, you know, if the FBI's report on online fraud falls in the woods and no one's around to hear it, does it make a sound? I mean, there was a little coverage USA today, NBC news, Axios, UPI, Washington Post.

Caleb Newquist: So that's not nothing. But I kind of I still stand by this, you know, overall assessment that this news is vastly overlooked. And I think that's kind of one of the sad things about fraud is that, you know, the [00:28:00] FBI can put something like this out. It just doesn't faze anybody. It goes more or less unnoticed because it just feels like every day there's some new report talking about online fraud, you know, a data breach, pig butchering, whatever. And a report like this has a lot of important information for regular people, but it just gets lost in the noise and like it's just a snapshot of like the entire population of fraud that's happening, right? So there's plenty of frauds that go unreported, right? Because people are [00:28:30] ashamed or embarrassed or they didn't even know they got ripped off. Right? Especially the elderly. You know, we've talked about that in prior episodes, that so much fraud goes unreported because of the shame and embarrassment that people feel around it. And I think people, you know, there are people that are trying to normalize, you know, when this happens. I've even found the AARP has [00:29:00] like an entire like part of their work is like with is working with victims. So that's, you know, it's just trying to normalize, uh, falling victim to fraud. That is that that seems like a big task. That seems like a that that needs to, like, get some traction before we really get a fuller picture about all the fraud that happens.

Caleb Newquist: But anyway, bookmark [00:29:30] this one Internet Crime Complaint Center. If you or your business are a victim of an internet crime, immediately notify all financial institutions involved in the relevant transactions. Submit a complaint to ic3.gov. Contact your nearest FBI field office and contact local law enforcement. Okay yeah I see 3.gov. Okay that is it for this episode. [00:30:00] Now remember no legitimate company needs you to send your Social security number through a Google form. Okay? They've already got it. They've already got your Social Security number okay. Don't give it away anywhere If you have questions, comments or suggestions for stories, drop me a line at my fraud at com or you can hit me up on LinkedIn. I mean, I don't like LinkedIn, I wish. Should we? Oh God, what the fuck? I hate LinkedIn so much. This [00:30:30] is me just muttering into the microphone now. Oh my fraud is created, written, produced and hosted by me. Caleb Newquist Zach Frank is my co producer, audio engineer, and music supervisor. Laura Hobbs designed our logo. Rate. Review and subscribe to the show wherever you listen to podcasts. If you listen on your mark, you can get some CPE. A little bit of free CPE, or pay a little money and get all the CPE you want. Okay. Okay. Join us next time for more Ava swindlers and scams from stories that will make [00:31:00] you say oh my fraud.