Sunday, 15 September 2019

Charlottetown woman loses $62,500 to CRA phone scammer

Deposited cash in bitcoin machine, court battle now underway to get the money back

The woman put $62,500 in cash into this bitcoin machine in a Charlottetown restaurant, over a two-day period in February. Charlottetown police are holding the money in trust until the rightful owner is decided by the court.
A newcomer to Canada wept in Charlottetown provincial court Friday as she testified how she lost her life savings in a telephone scam.

The woman testified she feared deportation, or worse, if she didn't pay up.

"In my old country, that's how the government and police do things. You don't ask questions. You do what they say or else," she testified, choking back tears.

Over the course of two days in February, the woman spent hours making trips to her bank to withdraw cash, then feeding the bills into a bitcoin machine in a Charlottetown restaurant.

Throughout the ordeal, the phone scammer kept her on the phone, making threats.

"Somehow he knew a lot about my family. I don't know how, but it scared me," she testified.

CBC News is withholding the woman's name to protect family members overseas.

The fraudster claimed to be from the Canada Revenue Agency. He told the woman she'd be arrested if she hung up or told anyone what was happening. The caller insisted she keep him on her cell phone, and listened in, as she withdrew money from her bank and bought the bitcoins.

"One teller asked me why I was taking so much money. He [the caller] whispered in my Bluetooth, 'Make something up' so I did," she testified.

Over the two days, the fraudster contacted the woman multiple times. The number appeared to be from an Ontario area code, she testified. Once, the fraudster called back claiming to be with an accounting firm and advising her to pay up. Another time, the fraudster called back claiming to be RCMP.

The woman eventually confided to a Canadian friend what was going on. Police were called and they seized the machine from the restaurant. All the cash was still inside it.

Now, the bitcoin company, Bitcoin ATM Canada Inc. of Montreal, and the woman are in a legal battle over who owns the $62,500 in cash.

"The onus is on the more sophisticated party," the woman's lawyer, Jonathan Coady, told court. "It's a sophisticated company with machines in several provinces."

Bitcoin ATM Canada Inc. says it did nothing wrong, and the money is rightfully theirs. Since the incident, the company has posted warning signs on its machines in Atlantic Canada.

"What happened is tragic," Bitcoin's lawyer Michael Drake, told court. "The company is taking steps, trying to be a leader in a new area.... Fraudsters the world over will be delighted if they know somebody else is now on the hook."

Det. Sgt. Walter Vessey of Charlottetown police testified that the fraudster will likely never be found. The anonymous nature of bitcoin transactions, and sophisticated telephone scrambling technology, makes it virtually impossible to find them, he testified.

Judge Nancy Orr pushed Vessey during his testimony to confirm that the money was held in trust by police. That was a stipulation requested when she approved the search warrant back in February. That clause stipulated the court decide who rightfully owns the money.

The judge will make that decision Oct. 12.


source: cbc.ca
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