He lost $340,000 to a crypto scam. Such cases are on the rise
June 25, 20236:01 AM ET
Naum Lantsman was sure his cryptocurrency investments were making money. Every time he’d log on to the trading platform he was using, it looked like he was reaping windfall profits. But Lantsman, in fact, was one of a growing number of people who’ve fallen victim to cryptocurrency scams.
“I heard, and I read, but somehow I thought that I am not going to be one of them,” he said.
Lantsman, 74, turned to cryptocurrency investments after the pandemic upended his life. He runs a business selling equipment and supplies to restaurants in the Los Angeles area. But many of them shut their doors when lockdown orders went into effect.
“I lost a lot of clients because a lot of them, restaurant and bars, they closed,” Lantsman said.
At the same time, his retirement savings, which he managed himself, took a hit as the pandemic gyrated stock markets.
One day he was scrolling on Instagram and stumbled upon a post from a company called SpireBit. Its website says it is an “international financial broker” based in London, and helps people invest in cryptocurrencies.
Lantsman decided to try it.
An online friend and a false sign of success
After Lantsman opened an account, a company representative who called himself Pavel reached out on the messaging app Telegram. He wrote in Russian, Lantsman’s native language.
They began chatting regularly, swapping details about vacations and families and commiserating about their shared background in the former Soviet Union.
Lantsman had initially transferred $500 into his SpireBit account. It seemed promising: When he signed in to his account, it appeared as if that investment had nearly doubled in a matter of weeks.
Over several months, Pavel goaded him to invest more and more of his money. Eventually, Lantsman poured his entire life savings, totaling more than $340,000, into the SpireBit account.
“When he logged on to SpireBit, he saw a very compelling fake platform that looked like money was being deposited, and that money was growing,” said his son, Daniel Lantsman.
But it wasn’t growing at all. The charts on his SpireBit account depicting earnings growth were fake.
Lantsman discovered this when he attempted to withdraw money from his account. SpireBit sent over a document purporting to be from Barclays, the British bank. It said Lantsman must send SpireBit 2% of the amount he was requesting as a “security measure.” (A representative for Barclays confirmed that the document was forged.)
By this point, Lantsman was entrapped by the scam. When his son and daughter found out, it was too late. The money was gone.
“Obviously there’s like a shame component to this and coming to reality and grips with ‘Hey, I lost 100% of my family’s liquidity,’” said Lina O’Connor, Lantsman’s daughter.
Lantsman’s story closely resembles that of another man who spoke with NPR. Aleksey Madan, 68, who also was born in the former Soviet Union, recently sold a home in Indiana and became involved with SpireBit. He ended up losing all of the money he made from selling his house to the scam.
He invested $137,000, then tried to withdraw it. Like Lantsman, he received multiple forged banking documents fabricated to look like they were from institutions working with SpireBit. Each contained demands for more money.
“They were always promising me they’re going to send me money back,” Madan said. “But it’s always after owing them some other amount.”
SpireBit declined to be interviewed for this story or to answer questions about any individual case. Instead, it sent a statement saying cryptocurrencies are volatile and losing money is always possible when trading in crypto.
“We have received your inquiry regarding the loss of money by our clients. We would like to draw your attention to the fact that the activities of our company are regulated according to the legislation of the country in which the head office of the company is located,” SpireBit said in a Telegram message, which also included language about the risks of investing in cryptocurrencies that appears to be lifted from another website.
Fake LinkedIn profiles and allegations of identity theft compound mystery of SpireBit
SpireBit pitches itself as something of a cryptocurrency investment trading platform for beginners. “Individual consultations, training in trading from scratch, trade and technical support are just a small part of the services we provide,” according to its website.
But much about SpireBit is a sham, NPR found.
Its website claims SpireBit has partnered with established companies in the crypto industry: Coinbase, Cash App, Crypto.com, Trust Wallet and Coinme. When reached by NPR, all five of these companies said they had never done business with SpireBit.
A profile of SpireBit on the tech company directory Crunchbase lists the company’s founder as Kansas-based Duloff Horns.
Horns’ LinkedIn profile features a portrait of a Black businessman in a suit with crossed arms — an image that can be purchased from the stock photo site Shutterstock. (It’s labeled as “Portrait smiling African American businessman in blue suit in office.”) A public records search could not identify anyone with Horns’ name in the U.S.
Cryptocurrency makes scams easier to carry out
In some ways, cryptocurrency is the ideal vehicle for scammers.
Fans of crypto are attracted to its lack of government regulation. It enables traders to bypass government red tape. But its lack of formal oversight also makes it ripe for abuse.
Even though there has been a flurry of federal actions against crypto companies, especially since the spectacular collapse of cryptocurrency exchange FTX, the crypto industry still operates in a legal gray area.
Unlike traditional banks, the federal government does not backstop crypto with insurance, making crypto investments especially risky.
On top of that, crypto transactions, which occur on an online ledger known as a blockchain, are pseudonymous and can be difficult to track down. Money often moves from one digital wallet to another, typically denoted by a string of numbers and letters, not a name, making figuring out who is behind a wallet a complicated process.
A 900% uptick in crypto scams since the pandemic began
Cryptocurrency scams have exploded since the pandemic. There has been a 900% increase in total money lost to crypto scams since 2020, according to the Federal Trade Commission’s latest figures. And that is just the number of incidents reported to authorities.
“The issue is basically that people are seduced by the hype about huge profits on crypto trading and unfamiliar with the technology,” said University of Pennsylvania professor Kevin Werbach, who studies the crypto industry.
Just last year, there were 50,000 reports of crypto scams, according to the FTC, with almost half of the victims saying they were lured into a scheme from an advertisement, post or message on a social media platform.
“Many of these transaction are irreversible, so you can’t always call your crypto company and say, ‘Hey, I made a mistake,’ or it turns out that the person on the other end of this transaction was a scammer and have the transaction reversed,” Katherine Aizpuru, with the FTC’s division of financial practices, told NPR. “In many cases, the money is gone.”
AARP: Be on the lookout for crypto scammers
Older people are especially vulnerable to crypto scams, said Amy Nofziger, the director of fraud victim support with AARP.
“Older adults do hold the majority of wealth in the United States so certainly criminals are going to go where the money is,” she said.
AARP hears about someone losing money to a crypto scam nearly every hour, Nofziger said. “People are losing millions of dollars,” she said.
She tells AARP’s members never to invest in crypto after meeting someone online, and if a random text message is the first introduction to a person, do not give them any money.
“Those are huge red flags,” she said. “I would never advise anyone to invest that way.”
Daniel Lantsman: “There was a complete failure to protect my father”
One of the ways SpireBit’s scheme worked, Daniel Lantsman said, was by preying on the loneliness of his father, who came to Los Angeles in the 1980s from what is now Ukraine. He is now semi-retired and spends his time online, watching basketball games and enjoying the company of his family.
“There are a lot of people out there like him, aging boomers who are at home, who might be a little lonely, who aren’t as engaged and who didn’t grow up in a time when technology was as available,” Daniel Lantsman said.
He admits the family was hesitant to go public with their story. Nobody wants to attract attention for being duped out of their life savings. But they decided to come forward hoping to prevent others from being bamboozled after exhausting all the options to recoup their money.
Unbeknownst to the rest of the family, Naum Lantsman was for months quietly making countless online transactions thinking a big payday was just around the corner.
When he thought he was investing in cryptocurrency through SpireBit, he would wire money from his JPMorgan Chase bank account into an account on Crypto.com, a platform that can convert U.S. dollars into crypto currency.
From there, SpireBit scammers instructed Lantsman to send the money to various digital wallets controlled by SpireBit. At that point, the money was virtually untraceable and could not be accessed. Yet when he checked his SpireBit account, what looked like an investment matching his transfer automatically appeared on a chart.
Lantsman’s bank, JPMorgan Chase, said that since he authorized the transfers, there was nothing it could do; Crypto.com said the same.
Lantsman said he first came across SpireBit on Instagram, though he cannot recall how exactly. His family reported SpireBit’s account as a fraud to the social media platform. Company representatives never got back to him. Instagram has still not take any action against SpireBit’s account.
Lantsman filed reports about the scam with his father’s banks and the Los Angeles Police Department, but the family’s hopes of getting to the bottom of SpireBit have been largely flattened. Figuring out who exactly is behind SpireBit and trying to recover the stolen money may be a lost cause, the family admits.
“There were so many opportunities for real, U.S.-based institutions to flag something,” Daniel Lantsman said. “Never happened. There was a complete failure to protect my father.”
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