COVID Feature: Cryptocurrency COVID-19 Scams

Angry businessman phoning the bank for credit card support ++++ Note for the inspector : Credit card is fake and made especially for the photosession ++++

Fraudsters are happy to take your money in whatever form it comes in whether that be cash, bank accounts, credit cards, loans, or gift cards. As a few tech savvy criminals have recently demonstrated, they are also willing to be paid in cryptocurrency.

Today, we look at a common fraud scam that took advantage of the COVID-19 public health crisis to steal $2 million in cryptocurrency. Consumers paid for face masks, hand sanitizer, medication and other medical supplies with the electronic currency, but never received their purchase.

Criminals will do anything to make a buck, including exploiting fear and anxiety caused by the coronavirus. Investigators across many law enforcement agencies have noticed a pattern in the scam. Buyers visited trusted e-commerce sites like Amazon, eBay and social media marketplaces, but were lured off those sites to message platforms that did not have any third-party oversight. Once the scammers processed their victims’ payments, the purchaser received a shipping label as proof that their order was legitimate. (Well, unfortunately it wasn’t. The shipping labels were bogus.)

While buyers were relieved to have secured desperately needed medical supplies, it wasn’t long before they realized they had been duped. Some scammers even sent empty boxes. (Obviously by that point, the victims’ cryptocurrency was gone. Talk about adding insult to injury.)

Investigators also noticed that the stolen crypto – tether, bitcoin, ether and other cryptocurrencies – led them back to Asia where the liquidation occurs primarily through large Asia-based exchanges. While the scam started in east and Southeast Asia, they are now making their way around the world, even to the United States.

It’s a good guess that this unfortunate COVID-19 related fraud scam is not going to die down anytime soon, so be on the lookout for scammers and follow this advice:

  • Don’t buy medical supplies from marketplaces you do not trust.
  • Confirm that the company you are dealing with is legitimate before placing an order.
  • Do not conduct transactions using WhatsApp or WeChat.
  • Be wary of crypto-first vendors. While many are legitimate, others may not be.

Today’s Fraud of the Day comes from an article, “Thieves Swindle $2M From Coronavirus Preppers With Hand Sanitizer, Face Mask Scams,” posted by on March 18, 2020.

Scammers purporting to sell pandemic essentials – such as face masks, hand sanitizer and medication – have stolen at least $2 million in cryptocurrency from panicking consumers, claims blockchain security firm AnChain.AI.

The haul comes from low-budget malicious actors putting a fresh riff on a classic ruse: money paid for products never delivered. Striking amid a public health crisis in which hospital systems from Milan to Seattle are getting crushed by COVID-19 patients and governments are fretting if their emergency stockpiles can meet unprecedented demand, scammers are looking to consumers, also weary of the novel coronavirus, as a boon.

Previous articleClear Line of Sight
Next articleFacing Change

Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.