A coworker recently shared with me that she was in an online dating relationship and that the person on the other side wants her to invest into some crypto business. Should I be concerned?
More facts are needed, but dating scams are very real and very dangerous for individuals, but also employers if an employee has the authority to spend or invest organizational assets.
One particular scam is called "pig butchering". The scammers search for relationships on legitimate dating apps using false identities. In these scams, the perpetrators will spend months developing what appears to be a personal relationship with the target, including offering fake images of fictitious family members; fake stories about their childhood and other deeply personal online conversations - all in order to build trust to perpetrate the fraud.
When the time is right, the scammers often disconnect from the dating app and ask the target to take the conversation to WhatsApp or to private email to keep the scam private from monitors. Eventually, they let the person know that they are making money in a particular investment mechanism (a lie), often crypto, and share the fake scheme with their online partner. The fraud looks legitimate -often tied to a well-known financial organizations, websites that look the part, high-end security, including dual authentication, customer service, etc. Trusting the relationship is valid, victims invest tens, even hundreds, of thousands of dollars.
The investment is into a shell company and the bank account to which the money is wired is in control of the scammer. When the victim demands their money, both the scammer and the money is gone.
A rundown of how one tech executive was takin in by the scam is provided here: https://finance.yahoo.com/news/tech-executive-falls-victim-450k-190411822.html
Dating scams are personal in nature, but that doesn't mean scammers won't use the scam to target employees in charge of finances or investments for organizations or just business owners. They really don't care where the money comes from…they just want to trick someone to sending a lot of money to them.
The final takeaway is that investing requires due diligence and caution. Employers should establish parameters on how organizational money is invested or even how money is wired, particularly if an online mechanism is involved.
Jack McCalmon, Leslie Zieren, and Emily Brodzinski are attorneys with more than 50 years combined experience assisting employers in lowering their risk, including answering questions, like the one above, through the McCalmon Group's Best Practices Help Line. The Best Practice Help Line is a service of The McCalmon Group, Inc. Your organization may have access to The Best Practice Help Line or a similar service from another provider at no cost to you or at a discount. For questions about The Best Practice Help Line or what similar services are available to you via this Platform, call 888.712.7667.
If you have a question that you would like Jack McCalmon, Leslie Zieren, or Emily Brodzinski to consider for this column, please submit it to email@example.com. Please note that The McCalmon Group cannot guarantee that your question will be answered. Answers are based on generally accepted risk management best practices. They are not, and should not be considered, legal advice. If you need an answer immediately or desire legal advice, please call your local legal counsel.