illustration police officer running on a hamster wheel catching up to scam alerts

Scams Overwhelm Law Enforcement

With online scams up 87% since 2015, authorities are struggling to keep up with the mainly untraceable crimes.

Published: May 1, 2023

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n elderly couple in Cayuga County received a phone call on Feb. 8 that would break any grandparent’s heart: It was their grandson, who said he was in jail and needed money for bail. 

Or so they thought. The caller urged the couple to make multiple bank withdrawals, extorting over $24,000 from the victims using Uber Package to collect and deliver the money, the Cayuga County Sheriff’s Office reported. Meanwhile, their grandson was safe and serving in the military, unaware he was being impersonated or his grandparents were being scammed.

Stories like this are all too common, with imposter scams generating more than half a million complaints to law enforcement in 2022, accounting for nearly a third of all fraud complaints. But this particular story had a different outcome than most scams: the grandparents acted quickly and the perpetrators were caught. 

Matt Malinowski, public information officer for the Syracuse Police Department, said locals can reach out to SPD on Facebook if they are suspicious of a potential scam.

“If you say ‘I got this email that I won an African lottery, I have to send them $5,000 to collect $2 million,’ send that to us and we will give you some advice and say it’s probably a scam,” Malinowski said. 

But with online scams up 87% since 2015, according to a 2022 report from the Better Business Bureau, SPD would be hard-pressed to respond to every scam complaint, Malinowski said. 

The organization will create BBB business profiles for fraudulent businesses with a warning at the top that the business is not real, said Melanie McGovern, communications director for BBB. She recommends checking the BBB website prior to purchasing from an unknown retailer. 

In the case of a fraudulent business, the Better Business Bureau works to investigate complaints of business scams through its Scam Tracker. After vetting the complaints, the organization publishes the information so people can be aware of the “business” and protect themselves from further scamming. 

But for the people who do fall victim to scams, what can be done to remedy what are mainly untraceable scams? 

When dealing with incidents of scams and fraud in the “physical space,” Malinowski said local law enforcement can take action. For example, sketchy contractors that are going door to door promising to fix roofs and taking advanced pay without ever completing the job can be charged with a scheme to defraud, or with petty or grand larceny if they’ve been duping community members out of money. 

But that’s not how most people get scammed. with the BBB reporting that only 7% of scams in 2022 involved in person or mail contact, while 55% of scams – and 75% that lead to financial loss – took place online. When a member of the local community clicks a bad link on Facebook and compromises their personal information, what can local law enforcement do to bring an unknown scammer to justice? 

Not much, as it turns out. Law enforcement is constrained by a lack of resources, weak laws and the fact that many scammers aren’t local or even operating from within the U.S.

Crime victims, Malinowski said, don’t want to hear “‘there’s not much we can do’” But, he added, “that’s just the unfortunate reality, unless you have some sort of insurance that covers [scams], a lot of these fraud cases involve people who live in different countries.”

If scammers from outside of the country, often hiding behind identity-concealing software, scam someone out of a few hundred or thousand dollars, Malinowski said it’s unlikely that the police will have the resources to investigate. And, the officer said, cyber and financial crimes take a back seat in a city with 32 homicides in 2021, tying the record high set in 2020. 

“We have a pretty high homicide rate per capita, a lot of crime. We’re seeing a 40% rise in violent crime, so that’s really where all of our efforts are focused,” he said. “It’s hard to handle somebody’s check-cashing scheme, fraud-type case when you are still trying to solve shootings and homicides to keep people safe.”

While local police may not be able to take down a cyber scammer who sent you a doomed link, Malinowski encourages residents to reach out to police anyway. In these cases, police will do their best to provide assistance and take the opportunity to alert the community via social media to beware of digital crime, he said. 

Knowing where to turn in various incidents of cybercrime is important, said Joe Zavaglia, staff attorney for Syracuse University Legal Services

“When students have an issue like this, it’s daunting to know where to direct their complaint or report when it’s in the vortex of digital fraud,” Zavaglia said. “If the solicitation was through the mail, you’re gonna go through the US Postal Investigations; if it’s by phone, the Federal Trade Commission; if it’s contract or type fraud, you’re gonna go through the New York State Attorney General’s Office Fraud Division.”

“When students have an issue like this, it’s daunting to know where to direct their complaint or report when it’s in the vortex of digital fraud.”

At SU, Zavaglia has heard about apartment fraud schemes where a scammer posts nice apartment photos and contact information is given for a “landlord.” When contacted, students are asked to pay the security deposit as soon as possible to ensure that they land the beautiful apartment. 

Stressed students not wanting to miss out too often fall for the scam, Zavagaia said. Once the fake landlord receives a deposit, which Zavaglia said is typically conducted through a MoneyGram or another untraceable medium, the student is no longer able to reach the landlord and is down thousands of dollars with no apartment. 

If the money wire and identity of the scammer isn’t apparent, there’s not much that can be done to rectify the situation, he added. 

State Trooper Jack Keller said the best way to protect New Yorkers from falling victim to online scams is by providing education and spreading awareness. 

State troopers can’t do much if scams come from outside the U.S. either, Keller said. Even when the scam comes from within the U.S., law enforcement still struggles to respond adequately, he added. 

“We don’t have a specific unit that can actually just handle those types of things,” Keller said. “In New York state, for example, we would refer anyone who’s been a victim to make a report and then contact the New York State Attorney General’s office. They have a specific unit that deals with these types of fraud.”

Like Malinowski, Keller said a sketchy contractor-type scheme is something that state law enforcement can pursue and make arrests, but online scams are difficult to trace. 

A majority of the online scams Keller has heard about across the state involve banking fraud. 

“People are clicking on a text message or an email, and somehow through that, information is getting to the scammers, and they’re able to get into their bank accounts or credit card accounts and take money out,” he said. 

Local and state law enforcement don’t always have the bandwidth to help victims of fraud investigate after the fact, but federal law enforcement has more resources to crack down on internet perpetrators. 

The FBI has access to more resources and a greater reach when it comes to combating cybercrime, said Samantha Baltzersen, supervisory special agent with the Albany FBI Field Office’s Cyber Task Force. 

Federal fraud crimes like mail and wire fraud, tax fraud, securities fraud, and Medicaid and Medicare fraud can result in greater penalties like serving prison time, paying high fines, paying restitution and serving probation. 

If there’s no cyber intrusion — someone hacking into someone else’s computer system —  the U.S. Attorney’s Office won’t take the case if less than $50,000 is lost, Baltzersen said. The White Collar Crime Squad requires $100,000 or more in losses to open a case. In New York City, Baltzersen said the White Collar Squad might not open a case that doesn’t involve millions, but other cities have different thresholds. 

In cases of cybercrime, different statutes are triggered that follow different processes than wire fraud charges, Baltzersen said. 

Computer intrusion charges fall under 18 U.S. Code 1030, which means the incident has to be a digital intrusion, like a password hack into an email account, or the deployment of ransomware. Unless the intrusion takes place within a protected system like a government website, the loss must be at least $5,000 for the FBI to look into the case. 

The FBI works with countries with which it has mutual legal assistance treaties to get information to arrest scammers and bring them back to the U.S., Baltzersen said. In some instances, the U.S. can indict the scammers domestically and then pass over the indictments and evidence to an international government so the subjects can be found, arrested and tried without coming back to the U.S. 

For scammers based in Nigeria, the latter strategy is used to take down cybercriminals. 

In countries like China, where the FBI  has no mutual legal assistance treaties, it’s more tedious to pursue cases of cybercrime. For example, if a victim of a scam wired money to a bank in China (typically this occurs in Hong Kong, Baltzersen said), the FBI works with its legal attaché, or legat, based in that country, who will then work directly with the Hong Kong Police to try and recover the money. 

Because the FBI has no legal power in Hong Kong, they would have to tell the victims to file an online report with the Hong Kong Police, Baltzersen added. 

In addition to cyber task forces, the FBI has the Internet Crime Complaint Center (IC3), a platform for the public to report cyber crime. Following complaints that come through the IC3, the center’s Recovery Asset Team helps freeze large sums of money for cyber crime victims. 

If a victim of cybercrime reports it to the IC3 within 24 to 72 hours, it will automatically be assigned a Financial Fraud Kill Chain, a process to retrieve international wire transfers made by U.S. bank accounts, according to the National Center on Law & Elder Rights

The Cyber Task Force works with FBI contractors and the bank to recover the wired money. Both timeliness and awareness is key for victims, Baltzersen said, as the sooner they report the incident the better the chances are that the FBI will be able to get the money back. 

In cases where someone has wired the money through to another bank, sometimes the bank won’t return the money to the victim unless the original bank files a Hold Harmless Agreement, which removes liability from the bank that received the wire if the sum turns out to be legitimate.  

When a scam transaction is conducted in cryptocurrency, it’s even more difficult for federal law enforcement to recover the money because it’s in a private wallet, Baltzersen said. Scammers have caught onto this, she said, so scammers direct victims to crypto knowing that it will hold up law enforcement. 

An investigation would have to be opened in time to track down the crypto money and attempt to seize it, but Baltzersen said it can only be seized in two ways: If it hits an exchange that law enforcement can work with like Coinbase or Tether, or if authorities can find the keys or seed phrase to the private wallet. 

While it is possible for the feds to recover a victim’s crypto, it is both time consuming and resource guzzling when the FBI is already overwhelmed by cybercrime. 

“If nothing else, probably one of the biggest difficulties in fighting cybercrime is just the amount that it’s happening,” Baltzersen said. 

In 2021, the FBI reported 847,376 complaints and $6.9 billion lost to cybercrime. While Baltzersen said  the reported numbers themselves are “insane,” she also said the numbers are far higher in reality because many victims choose not to report. 

All age demographics are targeted by cybercrime, but Baltzersen said that the most commonly targeted demographic is the elderly, as they’re richer. 

Elder fraud often occurs as a romance scam, when scammers prey on lonely victims looking for connection and pretend to be in love with them to extort large sums of money, she said. 

One romance scam Baltzersen recalled involved an elderly woman who paid a scammer $3 million. She was then going to pay more to another scammer posing as a company that promised to “recover” her lost money by charging her an additional $2 million. But law enforcement intervened before that happened, Baltzersen said.

People under 20 are still going to get scammed, Baltzersen said, but have less money to pay scammers. With a large digital footprint, Baltzersen said people in this demographic typically fall victim to blackmail schemes from sensitive photos they’ve previously sent. 

While Baltzersen’s task force works to keep up with the nuances of scammer methodology, the evergreen nature of scams in the online vortex continues to limit the long-term effectiveness of federal law enforcement to nip them in the bud. 

“Because the internet is so fluid, it’s like playing whack-a-mole,” she said. “We can take down an operation, but they can just change where their infrastructure is, change their email addresses, change everything and be right back up and running with their scans very quickly, with very little effort involved in order to be able to continue to do it.” 

Given constraints at various levels of law enforcement, some experts are calling for more coordination between local, state and federal officials. 

Sarah Ruane, public affairs specialist for the FBI field office in Albany, said the FBI has resources that can help local law enforcement when cases don’t meet the threshold for the FBI to pursue them directly. 

A collaborative approach is essential, she said, given that “there are a lot of difficulties with these cases.”