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The eLegal Challenge of Online Scams - Fighting New Crimes with Old Laws - A conversation with Erin West and Alona Katz, District Attorneys and scam fighters
485 Plays1 year ago
Join Erin West, a District Attorney from Santa Clara County, CA, and Alona Katz, a DA representing Manhattan, NYC, as they confront the pressing challenges within the legal system when it comes to combating a new breed of crime: crypto investment scams, also known as "Financial Grooming" or the notorious alias of "Pig Butchering." In this episode, they candidly discuss the complexities involved in this digital underworld, shedding light on the devastating financial and emotional toll suffered by victims. Through their unconventional thinking and innovative initiatives, Erin and Alona strive to provide solace and support to those who have been scammed, while relentlessly pursuing justice for the vulnerable.
Erin introduces operation Shamrock which is an initiative she started with the mission to EDUCATE, SEIZE, DISRUPT everything crypto scams. You can join by emailing Erin: [email protected]
Linkedin:
Alona Katz: https://www.linkedin.com/in/alonakatz/
Erin West: https://www.linkedin.com/in/erinnordbywest/
This podcast is hosted by Ayelet Biger-Levin https://www.linkedin.com/in/ayelet-biger-levin/ who spent the last 15 years building technology to help financial institutions authenticate their customers and identify fraud. She believes that when it comes to scams, the story starts well before the transaction. She has created this podcast to talk about the human side of scams, and to learn from people who have decided to dedicate their lives to speaking up on behalf of scam victims and who take action to solve this problem. Be sure to follow her on LinkedIn and reach out to learn about her additional activities in this space. Also check out https://scamranger.ai if you had received a message that you suspect is a scam
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Transcript
Introduction to Financial Grooming Scams
00:00:00
Speaker
What is the fastest growing scam attack vector? We already talked about financial grooming, also known as pig butchering or crypto investment scam on scam rangers. Typically, they scam start in two ways. One is the friendly wrong number message. It could be on WhatsApp or SMS. Someone randomly reaches out and tries to say something like, you are in my contacts, who is this? Or I'm trying to talk to David.
00:00:29
Speaker
This is not David, wrong number. And then in both cases, start a conversation that is carefully designed to form a friendly relationship that can last up to a few weeks. And then the conversation about crypto investment starts. The second way that has recently emerged is the crypto training. It's now a disguise of training. And what they do is they start creating these chat groups on WhatsApp or Telegram or Skype or other
00:00:59
Speaker
communication channels and they create this whole fake environment that shows that many people are interested in the signals and the information that is shared by the leader of this group. I have an example of that on my LinkedIn. It's featured so you can go check the messages there.
00:01:17
Speaker
The 2022 FBI internet crime complaint center report shows a sharp rise in the total reported losses from scams. And a significant part of that growth is due to the sharp rise of crypto investment scams, which has grown 183% year over year. In episode two of scam Rangers, we talked to Aaron West, a prosecutor from Santa Clara County, California about crypto investment scams.
00:01:45
Speaker
She explained the tools and processes that law enforcement teams can use to help victims, such as tracing money on the blockchain
00:01:53
Speaker
and taking legal action to seize money.
Experts' Insights on Combating Crypto Scams
00:01:56
Speaker
Today, six months later, I wanted to check in with Erin and another colleague of hers, Alona Katz, to talk about progress. My big takeaway from this conversation, this is a big hairy problem. We all need to be creative and scrappy and work together to solve it. Because at least for now, no one is coming to take charge. It's all on us. Together, we need to step up.
00:02:24
Speaker
Scam Rangers, a podcast about the human side of fraud and the people who are on a mission to protect us. I am your host, Ayere Figur Levine, and I'm passionate about driving awareness and solving this problem.
00:02:41
Speaker
Welcome to Scam Rangers. I have two amazing superhero Scam Rangers with me today. First, Alona Katz has been a prosecutor at the Manhattan district attorney's office for over a decade. She currently serves as deputy bureau chief of cyber crime and identity theft. Prior to becoming a prosecutor, Alona worked as an investigator for New York city and state. She has investigated and prosecuted numerous cases related to cryptocurrency, money laundering,
00:03:09
Speaker
credit card bust-out schemes, and the use of synthetic identities. The next guest, Erin West, has already been on ScamRangers. Erin has a passion for assisting victims and has spent 24 years as a deputy district attorney in Santa Clara County, California. She is a nationally recognized expert and frequent speaker about the investigation and prosecution of cryptocurrency crimes.
00:03:32
Speaker
Erin currently focuses on educating state and local law enforcement about how to investigate pig butchering cases and how to seize cryptocurrency from international vet actors. Welcome to the podcast, Erin and Alona. It's so great to have you here. Thank you.
00:03:49
Speaker
It's really nice to be back. I'm excited to catch up and see how things evolved over the last six months. So everyone, if you haven't listened to episode two of Scam Rangers, go listen quickly and come back. But we'll recap a little bit and talk about what we previously talked about and then see how things have changed over the last six months.
00:04:11
Speaker
So we previously talked about the emergence of financial grooming, which is really named pig butchering. And that's the original name that the scammers gave this type of threat, which is luring victims into cryptocurrency investments. And these are not real cryptocurrency investments. These are fake ones stealing their money and really squeezing each and every penny that they have out of their pocket.
00:04:35
Speaker
And then there's a new class of cryptocurrency scams that is disguising itself as training and all these new training groups that are emerging and luring people into investment, not by building a relationship with a single person who kind of convinces them to invest, but actually
00:04:53
Speaker
posing as this guru who convinces people to take signals and then invest, and other people in this training group are showing profits, convincing the victims to invest.
The Human Impact of Financial Scams
00:05:06
Speaker
So all that is happening, and Erin, you have been working with different agencies to understand
00:05:15
Speaker
First of all, the problem, what's going on, and you shared what you've seen. Alona, tell us a little bit from your perspective, what are you seeing in terms of the size of the problem, the types of victims in New York, in Manhattan?
00:05:31
Speaker
Yeah. So first of all, thank you for having me on the podcast. I was a fan from the beginning when I saw that you led off the podcast with having Erin West and Kathy Stokes as some of your first guests, because they're both very victim-centric. So I knew that this was going to be my kind of podcast.
00:05:51
Speaker
And so Erin and I always marvel when we get together and talk because we always wind up saying we're seeing the exact same thing. We always call it like the East Coast, West Coast. So everything that Erin has very been publicly describing about the rise of pig butchering
00:06:08
Speaker
Scams and and the victims and the financial and emotional devastation We are seeing all of that on the East Coast as well and in that six-month period from when you know you first launched the podcast it has not stopped it has just
00:06:25
Speaker
increased and we are keeping our heads above water the best that we can to try to respond to our victims in a timely manner, whether that's actually being able to recover stolen funds for them or simply be able to give them some type of closure and information about what actually happened and what actually happened to their money.
00:06:50
Speaker
So they're not just left with being told there's nothing we can do. They're being told we did everything we could but you know some things are just out of our hands and out of our control.
Educating Law Enforcement and the Public
00:07:01
Speaker
Right and so Erin
00:07:03
Speaker
When we talked last, you shared, I think it was the first days or the initial days of, okay, we have a process, we know what to do now, so let's spread the word. So can you recap what happened since then? I know you started educating other agencies and other GOs in the US about
00:07:25
Speaker
first of all about the crypto scams but also about the tools and processes and and legal actions that could be taken to Seize the money what happened since then? I think it was really exciting to see that there were pockets of people all over the United States doing this type of work, too So Manhattan does a great job at this Queens does a great job at this there are I have colleagues in Connecticut who do fabulous work and
00:07:52
Speaker
And, um, but what was happening, what I was noticing is that we weren't talking to each other. And so that I built this thing called the crypto coalition. And we started in September of last year with about 85 people on a listserv. And then we, the listserv has grown and we're about to have our thousandth member of local
00:08:15
Speaker
federal and international law enforcement doing this type of work. And it's really built a fabulous community where we can share experiences because REACT had a great start at this, but we weren't the only ones doing it. There were tons of, not tons, but there were others who were doing great work too. And we were all able to benefit from each other. And I think we've felt
00:08:37
Speaker
great relationships where oftentimes I feel very alone in my office because nobody else is doing this work, but in this group I found all my peers that are doing this work and facing the same issues. So I think together we've
00:08:53
Speaker
We've educated each other and as part of the crypto coalition, I have a webinar every three weeks and I have guests on there who educate us about people from Binance that talk about how to work with Binance, people from Coinbase that show us how to read their records, other prosecutors and investigators nationwide who show us how the work they're doing. So it's been, I think, a really helpful community that's built on each other. That's amazing.
00:09:24
Speaker
I think one thing that you mentioned when we talked last week in preparation for this session was that there are still kind of lone rangers out there who are the single person in their community, if it's law enforcement or legal teams. And first of all, I guess the question is, how do they learn? How does the information get to them? What are the resources that they have? And what would you recommend to them
00:09:54
Speaker
create that broader circle and broader support around them so they're not alone. I definitely recommend joining the coalition and that's easy to do. You just email me and I'm sure you'll put my email in the show notes, but I'm also on LinkedIn and I
00:10:10
Speaker
use that as a way to communicate with people. But I think there are a lot of opportunities out there for people who do feel like the Lone Ranger. And one of the best ones is Secret Service operates the National Computer Forensics Institute, where they have a one week class on
00:10:28
Speaker
digital currency. And then when investigators go there, that's completely covered by the Secret Service. It's at no cost to their agency, and they come home with not only a great education, but also a tool. TRM sponsors them for a year to use their tool. So there are opportunities out there to get free education and to learn, and then the community supports you beyond that.
00:10:53
Speaker
That's really great. And I think, and definitely we'll put all the information in the show notes and of course reaching out to you and learning more about how to get resources. So one of the things that we talked about is the, and curious to see if that has changed over time, the targets for these types of scams and for cryptocurrency investments, because crypto is kind of more advanced. So advanced in terms of technology, in terms of concepts, I think,
00:11:22
Speaker
If we look at the population, the elderly, they're used to cash and credit card over time and kind of cryptocurrency is the next step there. How susceptible are they in really taking part in these scams and technically getting their money into cryptocurrency exchanges? Is it just elderly or do you see other populations targeted? So maybe Alona, we can start with you and tell us what you're seeing from your perspective.
00:11:50
Speaker
Yeah, a large number of the victims that I've spoken to in New York have been members of our older population. And I know that there's a wide age group that gets hit by these. I think when our older population gets hit, they tend to get hit very hard because they will be more likely to have a retirement account and savings than someone who is in the early 20s.
00:12:16
Speaker
So I've noticed that when I've spoken to that segment of the population, there's a particular level of devastation and a sense that they won't have the time necessarily to make that money back. They're not in the position to return to the workforce and recoup. I was very delighted though, the other month I did a presentation at a senior center in New York,
00:12:40
Speaker
And when I kind of pulled the room about who had gotten like a solicitation of this kind on a phone or through WhatsApp, everybody raised their hand. But every single person in that room also knew that it was a scam and shut them down. And like, I made everyone in the room like applaud for themselves. And they had all, there was like an email through a bank or a warning in a store or their kid talking to them and saying, you know, don't trust this.
00:13:07
Speaker
somehow it had seeped into their lives to be on the alert for these type of scams. So I was really, really like delighted to hear that the messaging is coming through, but it does sometimes feel like, you know, for every person who is getting the message, there's, you know, 10 other victims out there that we haven't reached yet. So, yes, so the older and senior population in New York has been a large part of the work that we're doing. And what are you seeing in Santa Clara County, Erin?
00:13:37
Speaker
from a population age perspective? I definitely, what we're seeing is sort of running the gamut between all age groups. One of our first victims was in his 30s. We see a lot of people in their 50s, but we definitely do see our senior population as well. So yeah, I would say it runs the gamut. And I think what's important for these victims to hear is that
00:13:59
Speaker
It is a very sophisticated group of people that fall victim to these scams and that they should give themselves some grace and some understanding that they are part of a highly manipulative, well-plotted fraud that really bright people fall into and that
00:14:24
Speaker
They're not alone. There are people, there are neighbors that have fallen for this too. And so I think that there's such a stigma about reporting and people feeling really badly about themselves that I wish we could lift that a bit because I know it would benefit everybody to have more reports so that we could understand how massive this problem is. And one of the things that we also talked about is help. And one is,
00:14:53
Speaker
alleviating the shame. But another thing is kind of noticing, having family members notice behaviors that are a little different. And people, it's kind of, it's sad to say, but it's kind of like when someone is having an affair, they suddenly act differently. They had their phone. Alona, you had a story about someone who fell for a scam. And in hindsight, their family realized that there were behaviors
00:15:21
Speaker
Yeah, this was a close friend who actually reached out to me because he knew I was in this line of work and he
00:15:33
Speaker
they had unfortunately realized that one of his parents had been manipulated into sending a large, large amount of money abroad. And I said, have you ever heard of the expression pig butchering? And he said, what's that? And I basically kind of explained the months-long grooming process and the escalation of deposits and usually
00:15:58
Speaker
how things kind of reach this boiling point when the victim wants to make a withdrawal and they can't make a withdrawal. So then they start squeezing out just a little bit more under the guise of you're paying a taxes or recovery fee. And my friend was like, you just scribed
00:16:16
Speaker
my parents' behavior over the course of like six months, like their kind of addiction to the messaging app on the cell phone, running out to the drug store to buy, you know, just one more gift card, you know, going to the bank.
00:16:31
Speaker
And it's kind of crazy how the pattern is repeated. And that's like, you know, that Aaron said, it's like, it's this sophisticated, you know, method. It's tried and true. It preys on like psychological triggers of, you know, of hope, of financial dreams, you know, for your future.
00:16:52
Speaker
And I think if my friend had been aware of that, he may have spotted, he may have been cued in to what was going on with his father, but he certainly is now, and he's certainly speaking to his friends and family about what happened.
00:17:11
Speaker
super important for us as family members as people who are you know following this and knowledgeable to deliver that message as well. One is yes it can happen to anyone and two is take care of your community like we volunteer to do many things to help you know with with food pantries and and
00:17:34
Speaker
other things, this is part of that social care to our community. And speaking of that, Erin, so one thing that has emerged over the last few months is Operation Shamrock.
Operations and Legal Actions Against Scams
00:17:46
Speaker
So I would love for you to share that with us, tell us why, what, the how of, and how people can join, of course, as well.
00:17:55
Speaker
Sure. I became more and more frustrated on behalf of the victims because like Alona said, like it has not slowed down at all and it just, it's more
00:18:10
Speaker
the number of victims continue to rise. And so I felt like I needed to come up with a plan of ideas of ways to fight this beast that didn't involve arresting kingpins, because I didn't think that was within my capability. But what I could do is I could educate, I could seize, I could disrupt. Those were the things that I thought were in my skill set and that I had the ability to do. So I started with the education
00:18:40
Speaker
piece of just talking about it all the time. Talking on LinkedIn, accepting any opportunity to really talk about what this problem is. And for education, I see that piece of the Operation Shamrock is
00:18:58
Speaker
not only educating law enforcement, educating potential victims and then educating actual victims and their families that this is a scam because you know we were talking about a lot of times
00:19:11
Speaker
The victims don't realize they're in a scam despite the pleas of their children to tell them that they are. And then the second leaf was seized because that was something that my office had some good fortune with. We were able to get to some of the victims' funds and recover them and that really
00:19:35
Speaker
struck a chord with me because I felt as though it was an opportunity to have, like Alona said, victims feel heard and have them get some sort of closure to what they had experienced. Even if they weren't able to get money back, they felt like we had exhausted our what we could do. And then the last piece is disrupt. I think that we have some fantastic opportunities in a lot of really creative ways.
00:20:05
Speaker
to disrupt this.
00:20:07
Speaker
this massive beast on the other side of the ocean that is continuing to spread. And those are working with social media to disrupt the on-ramps, working with the social media that's allowing these predators to be on their sites and looking at how we can disrupt their access to domains, working with GoDaddy and Namecheap and other domain providers to see how we can
00:20:36
Speaker
quickly limit the ability of them to own all these domains. So there's just a lot of as well as just their general infrastructure. I know that there's somebody turned off the power to one of the sites in Myanmar over the last week and that's a great disruption too. So I think what I do want to say about Operation Shamrock is like it's available to everyone. It's like whatever you want to do that you find disruptive or providing education or providing a means of seizure like
00:21:05
Speaker
please do it and call it Operation Shamrock. We are all in this together. This is a massive, massive deal. And this isn't just my thing. This is all of our things. So that, to me, is what Operation Shamrock is about.
00:21:18
Speaker
So tell me a little bit from a orchestration perspective, operationally, because I definitely think these three pillars, they work really well together and they complement each other. How is it run? Who's participating today? How can people get in touch and contribute if they are in the industry and have the ability to contribute?
00:21:44
Speaker
I'm so glad you asked. So I had a great idea, right? And then running a great idea is also another project in itself of figuring out how to run this. And so I've started to work with some great partners who are helping me get it organized who have better access to banking industry, who might be able to assist with that. And I'm organizing some roundtables to bring people together into the same room to figure out
00:22:11
Speaker
who wants to take responsibility for certain buckets of this? And I think that's how it will end up playing out is that we'll look for leadership in each of these roles and give everyone an opportunity to be part of it. So yeah, if you do feel like you have time and energy and willingness to be part of that, I would love to hear from you and I would love to put you to work.
00:22:34
Speaker
That's amazing. And we'll add resources in the show notes for that as well. Lots of resources today. Great. And Alona, I think you have a great story about the disrupt pillar that you can share with us today, just hot off the press, literally.
00:22:51
Speaker
Yeah. So first of all, and just to piggyback on what Erin said, like, Erin and I are both, you know, career local and state prosecutors, which means we're like, we're very scrappy. You know, we're very resourceful. We're used to being told, no, that's not in your jurisdiction. No, you can't do this. No, you know, we don't have a federal budget for that. You don't have like that resource.
00:23:14
Speaker
But that just means that we're like 10 times more resourceful than anyone else. And we're constantly networking and connecting with people and finding out how can we help them? How can you help us? What can we do from our little stronghold in our state to actually make a difference? So I love local and state prosecutors and law enforcement because I think we really know how to get a lot done with very little.
00:23:41
Speaker
So in that model of disruption, one of the Shamrock pillars, there's been a lot of talk about fraudulent cryptocurrency asset recovery services. And it's sometimes called a double victimization scan. So a lot of victims who may have
00:24:02
Speaker
you know, fall and prey to one of these pigbituring scams may not think that they can get help from their local law enforcement or their local law enforcement just isn't equipped to help them. So they turn to, you know, just Googling or looking online and there are sites, entities and companies saying, we'll provide the service, pay us up front and kind of prey on and cultivate this hope and the victims that, oh, we can get, you know, your money or some of your money back.
00:24:31
Speaker
you know, but obviously asking for payment in return. The people controlling these sites, there are certain things that may be outside the control or scope of local law enforcement. But in this particular case, we had a press release today that pursuant to a search warrant, the website for one of those entities known as Coin Dispute Network was effectively seized by the Manhattan DA's office and taken offline.
00:24:57
Speaker
So if you go to that website now, Coin Dispute Network, you'll see a splash page from the Manhattan DA's office, which we hope will get the word out to victims or people who thought they were legitimate customers of that website. So that was us embracing the disrupt model. What can we do to get the word out as quickly as possible, to impact as many victims as possible, to cut off the flow of people sending
00:25:25
Speaker
more money into this entity, which the investigation is ongoing, but we believe that they were offering a fraudulent recovery service. And it was just kind of a way to get creative with what law enforcement can do. In these types of cases, traditional law enforcement thinks the case concludes with an arrest and you're taken to court and you're before a judge and you litigate it.
00:25:48
Speaker
And we can't always do that when things are online or virtual or all in crypto, but I really, really encourage people to get creative about what they can do and what may be in their control through DNS services or internet registrars. There's kind of a framework structure supporting a lot of these fraudulent entities.
00:26:11
Speaker
We can, you know, chip away and dismantle it a little. So I just have to give props to my investigative team who led that. The lead ADA of Virginia Wynn, our amazing cryptocurrency analyst, Kelly Kenny, and investigators Greg Dunleavy and Ethan Zukoff. We had an amazing team that just worked as fast as possible because they knew every day that victims money was at stake.
00:26:36
Speaker
So that's amazing. And I always say that recovery scammers are the scum of the earth because not only has someone gone through a scam, lost a lot of money, potentially all their money as often the case with pig butchering scams, it's now trying to take even more money because these services cost money. And I guess my question is, are there any legitimate recovery services out there or is it just law enforcement?
00:27:04
Speaker
The legitimate recovery services are going to be upfront with you and they're going to let you know that to ultimately recover something, you're going to have to go to law enforcement. So for me, a legitimate service would maybe take you on as a client and work with you and maybe more have time to talk to you, but say immediately report this to law enforcement or IC3 as well. They're going to be upfront about their capabilities and their restrictions.
00:27:34
Speaker
And when it comes to seizing cryptocurrency, I think there is a legal aspect involved there, so it will have to be the authorities, right? Yes. To my knowledge, the exchanges that work with us to return seized crypto are only going to be responsive to a search warrant or order that's issued by law enforcement. I'm not aware of any of those exchanges returning money
00:28:00
Speaker
based on a private corporation and all, they wouldn't do that. So anybody who's leading you in that direction is misleading you. Wow. Well, amazing, amazing news. And I hope we'll see more of these success stories coming out. And as you said, being resourceful and being creative. And between that and Operation Shamrock, one question that comes to my mind is kind of, wait,
00:28:26
Speaker
That's awesome, Erin, that you've taken charge and you're pushing this and you're inviting everyone. But I'm also kind of in the back of my mind. This question comes up. Who's in charge? Who's supposed to be in charge of our safety and security? Who's the person who has the organization that has that authority on a federal level to say, or even on a state level to say, this is a big problem. The level of crime is almost a passing physical crime.
00:28:56
Speaker
And, you know, as a taxpayer who's paying both federal and local taxes, I want to ask, like, who should be in charge? What agency or organization or institute is supposed to be taking care of me? And where are they? I think that's a valid question. I think that you have a lot of victims who are going to be listening to this who feel the same way. And
00:29:21
Speaker
this particular crime of pig butchering doesn't fall easily into any bucket.
Complexities of Crypto Scams and Solutions
00:29:28
Speaker
And it has resistance in a number of ways. Number one, it's physically a great distance from us. And so we don't have the ability to go over there and knock on doors and get evidence. And so that's a tricky piece of it. Secondly, it involves
00:29:48
Speaker
It involves international governments and international lack of governments and an organized crime. And so that falls. That's that's not a local issue. That's a that's a federal issue. And and federal federal issue needs to put pressure on there. I mean, quite honestly, I I think that
00:30:11
Speaker
This is an issue that needs to rise to the top of federal government in terms of the major problem that it is. I saw a article from Interpol this morning that talked about how entrenched this is and how it's growing. And we've really only seen the Southeast Asia piece of it, but I know that it is taking hold in Africa and Middle East. And I think that
00:30:35
Speaker
It can no longer be overlooked by the by the highest levels of our government. It's a major, major problem that's way over my head.
00:30:46
Speaker
But it's way over Alona's head, but we're not gonna look away because these are our victims who are calling us and are crying and are threatening suicide. So we're a piece of it and we're not going away because we care about our people. So we're doing the best in the way Alona says it and the scrappiest way we know how and we're gonna keep doing it. But yeah, I think it's a major international crisis. And just think about the millions of dollars that
00:31:17
Speaker
or hard earned money by US citizens that are leaving the US and how that will impact our systems, our welfare, social security. Generations. For generations, for sure.
00:31:33
Speaker
Yeah, I think if everybody just understood the magnitude of the entirety of the contents of retirement accounts and bank accounts that are just flowing out of US citizens, their minds would just be blown.
00:31:50
Speaker
I know Aaron sometimes feels that way. You just want to shout and be like, this is crazy what's going on. Law enforcement traditionally, we don't always, agencies, we don't always play together that well or share that well historically, but
00:32:06
Speaker
I think with tackling these scams and crypto stuff, I've seen a real collaboration and unity that I haven't seen before when I've worked in street crimes and in other areas, because I think there's this sense of like, we're all in this together, and our victims are spread out across the country. And if we help each other, we're kind of helping everyone.
00:32:30
Speaker
So that is something that is very heartening and encouraging to me when I sometimes feel like it's overwhelming. How are we going to tackle this? I do feel like I'm part of a crypto law enforcement community. That's amazing. It's amazing to hear.
00:32:45
Speaker
I think what you essentially did is you divided into, okay, yes, this is a burger problem. It's not on me to solve this problem, but I can do a lot of things and really taking that charge of what is in my control and what can I do and how can I, you know, and Aaron, the call out to the community to
00:33:07
Speaker
do more and be part of the solution I think is amazing and I really do hope, genuinely hope that this will get to regulators and to office and to federal level. One of the things that you mentioned in our earlier conversations was the challenges that you had in terms of
00:33:27
Speaker
the legal system and what is in there to support you from a regulatory or from the law and that perspective on the state level. And I'm curious, what are your thoughts there and what could change easily to help and support you to execute quicker?
00:33:48
Speaker
I think we're both like, oh gosh, so many things. It's so tricky. I think what's happening for me, and then I'll happily defer to Alona, is that we are trying to fit new crimes into old laws. And so they're not set up for that. And so it's the absolute need to be innovative and
00:34:09
Speaker
And there are a million reasons why what we're doing doesn't fit the old laws, but we have to figure out ways to work within our system to get assistance to our victims. And so I feel like we're always trying to sort of finagle and stay within the rule of law, but still
00:34:36
Speaker
but still get our victims back what they deserve. I think one of the major problems we face is that we're not going to be able to file a criminal complaint in a lot of these cases, but we still want to take legal action against the assets that we're seizing. We want to be able to have a judge make decisions about those assets, knowing that there won't be a criminal case brought in in Santa Clara County. And I think that's a tricky place to be.
00:35:07
Speaker
Yeah, I think you put a great error in the new crimes and old law that was drafted before cryptocurrency was even conceived. I think something that would be really helpful for local law enforcement and prosecutors is
00:35:25
Speaker
is having some type of definition of a cryptocurrency transaction or digital asset, which I know is still being litigated as we speak, but something that can be put into our laws so that we won't have to worry about litigating that definition and whether the crime or investigating is covered by the law down the line, knowing that we're supported by the statute report.
00:35:54
Speaker
We wait into a case if we get to that point. So I know, Erin, you testified about it. I know they have pending legislation in Connecticut. I like to push New York along that course as well.
00:36:10
Speaker
And it has to be on the state level for each and every state, right? Is there any collaboration as part of the crypto coalition to say, you know, here are the things that we could potentially push to expedite the changes?
00:36:25
Speaker
I feel like there are so many great ideas. Like, yeah, there should be a legislation group in the crypto coalition, 100 percent. And and it's all bandwidth issues. I think we are. I can speak for myself. I am stretched so thin trying to have so many ideas and so and only so many hours in the day. And so, yeah, I I would love to see someone take up the legislation piece of this because I think it's super valid and really important. Yeah.
00:36:56
Speaker
And speaking of that, one of the things that really struck me as interesting and also maybe need to be revisited is how do law enforcement and your agencies, also the legal system, define success, right? It's traditionally been finding a criminal, prosecuting a criminal and putting them away. That's not the case in these crimes and seeking justice.
00:37:26
Speaker
For victims as much as we can how are things there and what how does that impact your ability to actually execute in? And get budget right so because I'm sure both of you are asked okay. How many how many people did you? Put away behind bars not too many so tell me a little bit about that
00:37:47
Speaker
Well, considering that just a number of years ago, a victim could have called up the police department here and reported some type of pig butchering or related scheme, and they would have been told, oh, that's civil, or there's nothing we can do, or, oh, no, that's crypto. The feds do that. And that would be the end of the case. Considering that now, if they were to reach out to my office, they would get a call back or a meeting from a trained investigator and a cryptocurrency analyst
00:38:16
Speaker
and we would be immediately triaging the flow of funds to see what we recovered. That's just an internal win that we've come so far so quickly. It was only a couple of years ago that I was at my first crypto conference writing, what is Bitcoin down?
00:38:37
Speaker
Sometimes I think we're very hard on ourselves, but if we look at how much progress we've made, that's a win on its own. And then, yes, I think Erin and I probably had the job of educating our executives and our bosses that this is going to be a different type of crime and a different type of approach and a different type of outcome.
00:39:07
Speaker
Yeah, and it's not going to look the way like a traditional criminal enforcement matter would work. That was a learning curve for me too, because I just kept thinking, but where's the person who did this? And we really had to work on shifting our mind frame and realizing we might never find that out, or the person themselves may be a victim of human trafficking. So it's been a process.
00:39:34
Speaker
And I think we're both grateful for the leadership that's allowing us to do this. We understand that we are forging a new path here, and it's not a path that's easily quantifiable. And I'm grateful for my DA who understands that this is a longer road. And Jeff Rosen has been super supportive of allowing us the time
00:40:02
Speaker
and the time away from traditional work to talk about it and to educate about it. And I'm just really grateful for that opportunity because right, we haven't put anyone in jail this year from React, but what we have done is we've made a lot of victims feel really heard and really given them good feelings about the community that they live in and that they are heard.
00:40:28
Speaker
Do you think that there are areas or are agencies where there are barriers because of the KPIs, because the metrics are around putting people away versus helping victims?
Innovative Tools Against Crypto Scams
00:40:41
Speaker
And how do we facilitate that change? And obviously you guys have done that. And I love how you are grateful for the opportunity. And I'm wondering how can we help others get to that mindset?
00:40:59
Speaker
That's a tricky one. So I went to the International Chiefs of Police meeting because I thought, OK, well, that's an opportunity to educate the leaders about how challenging this particular crime is. And I think it's a difficult road. I think that leadership at this point has been in that career for 20 years and really sees
00:41:28
Speaker
sees violent crime and physical protection of its citizens as the top
00:41:37
Speaker
as the most important piece. And so it's really difficult to try and educate about people losing their money on a cryptocurrency scheme as being the national prices that it is. And so I think it's an uphill battle, but I think Alona and I keep taking a step up every day and hopefully we're getting closer to where we wanna be. So I don't know how we get there. I know we just keep walking.
00:42:06
Speaker
I would reinforce my advocacy for being creative in the way that you think about how you approach your cases. And if you know you're in the position where you're going to have to meet with your chiefs or your bosses and convince them of something, take the time to
00:42:25
Speaker
invest in educating yourself first so that you can be well-versed and fluent when you go into those conversations. I've spent a lot of my time at work this year just trying to educate myself, watch webinars, listen to other people talk, attend conferences, so that I was even capable of having a dialogue about why this work is important.
00:42:52
Speaker
That's a really good point. And I think that there's a lot of resources out there. Ayla, when you started this podcast, there weren't that many podcasts like this out there. And look at how many episodes you've put out of really quality material that people could listen to. And there are others like you doing the same type of work. And I just think that there are good resources out there and a strong community of people that want to welcome you and assist.
00:43:21
Speaker
Thank you. So to my final question, then, you are both very creative, out of the box thinkers. And what I wanted to ask you is, in a realistic yet optimistic and ambitious goal setting here, what do you want to see happen over the next six months? Are you going to have us back in six months? And we're going to revisit this. You're going to play this goal for us? Absolutely, 100%.
00:43:49
Speaker
Oh, I have lots of goals. I would love to see a capable investigator in every state that could triage a case and have an intelligent conversation with a victim. And I would like to have that investigator in each state have access to a commercially available tool that will help them with their work. Those are two easy ones. Easy yet.
00:44:19
Speaker
Not so easy. So I really hope that will be the case. And you guys are doing everything that's required to get you there and to make that happen. Alona, any thoughts to add?
00:44:33
Speaker
I really agree with what Erin just, I know she had a vision of a map and like having the name of the person in each state, but I also hope for those people, because I've had many conversations when I've reached out about finding a victim that's not in New York state and I've made a connection and I've started off the conversation by, I was looking for the cryptocurrency unit and the person on the other end is like, it's me.
00:45:02
Speaker
And I know they oftentimes, you know, feel alone, as we talked about it at the beginning. So I hope for them that, you know, they get at least a partner. They're not a lone ranger anymore. Yeah. Yeah.
00:45:22
Speaker
Yeah, and I would add to that, taking that to the federal level that or the state level that funds are shifted even more to support victims of these crimes and to investigate because I just had a conversation. It's much easier to commit these
00:45:42
Speaker
virtual crimes and it's safer for the cyber criminals. It could be executed out of state, but not in all cases. There are also many local such scams. So the ability for us to investigate, to know how to deal with what's coming. We didn't talk about the fakes and
00:46:01
Speaker
alternative AI and how that's used. I just want to add one other hope, you know, getting the tools, the cost of the tools can be very prohibitive. And I would love, there are so many grant opportunities, like for law enforcement out there, and I would love to see more grant opportunities, specifically maybe from the federal government, maybe, you know, from elsewhere so that local law enforcement can get the funding that they need.
00:46:28
Speaker
to get these tools to empower them. That's a good one. And it's so important to have the tools because that's how you can actually trace the money and help victims potentially recover those funds. Great.
00:46:42
Speaker
Well, I wanted to thank both of you for joining me today and for sharing your thoughts. I want to thank you for all your work and your ambition. And I love what you said, Erin, about just it's an uphill battle. Alona and I are taking one step up a day and we're going to continue. We don't know what's going to happen tomorrow, but we're at it. And you're climbing the Everest here. And I applaud you for that. Thank you so much. And thanks for sharing your hopes and your knowledge with us.
00:47:11
Speaker
Thank you. And we'll talk again in six months. I better get working on my states.
00:47:24
Speaker
I hope you enjoyed this episode. If you ever receive a weird message and want to see if it's a scam or not, go visit scamranger.ai and verify the message. You'll be able to see the level of risk and also what to do next to verify. In the next episode, we will talk about social media and the role that social media plays within the scam lifecycle. Until the next time.