In Utah, Machel is busy caring for three of her grandchildren while her daughter recovers from surgery, when she gets a phone call about her Social Security number. The man on the phone claims to be from the Social Security Administration and says that multiple bank accounts have been set up by a drug cartel using Machel’s number. He tells Machel that her family is in danger, and she needs to act quickly. She is told that the drug cartel is watching her, so for her family’s safety, she is to tell no one what’s happening. Especially not her husband, Kyle, a member of the Utah House of Representatives. Kyle shares how he found out about the scam that stole his family’s lifesavings.
[00:00:01] Michelle: This week on The Perfect Scam.
[00:00:03] You just need to understand, my wife is an incredibly smart, smart woman. She's not easily fooled. She is trusting, but everything just aligned just right in such a weird way.
[00:00:19] Michelle: Welcome back to AARP's The Perfect Scam. I'm Michelle Kosinski. This week, a couple who had their future all set but then one day along came some drug cartels and government agents, or so it seemed. This is a terrible scam, posing as protection from a scam. What we're dealing with here is, in fact, the most common type of scam reported to the Social Security Administration’s Office of the Inspector General, when scammers impersonate someone from the government and say they need your personal information to fix some problem or restore your benefits. How common? More than a million reports to the Federal Trade Commission in the last five years common. And the total losses are even worse. More than 450 million dollars. In the vast majority of these cases, the imposters say they're with the Social Security Administration, and just last year alone, the SSA got more than 400,000 complaints from people saying they were targeted. So this scam is obviously working, and that's why it's on the rise. Plus, it's even harder to detect when the scammers point you to real government websites, even real people who work there, and most often, it starts with one little phone call.
[00:01:38] ...Enforcement Agency, to suspend your Social Security number on an immediate basis as we have received suspicious trails of information in your name. The moment you receive this message, I need you to get back to me on my department division toll-free number that is 1-888-952-5554. I repeat, 1-888-952-5554. Verify the last four digits of your Social Security number when you call to better assist you with this issue. Now if I don't hear a call from you, we will have to issue an arrest warrant under your name and get you arrested, so get back to me as soon as possible. Thank you.
[00:02:17] Michelle: So let's get to our story. You know, it's hard to tell a scam is a scam when you think you're dealing with your own government trying to save you from a scam. This one starts out West. A bucolic little town in northern Utah hugged by the majestic Wasatch Mountains founded by cattle ranchers. The kind of place where neighbors look out for each other. A place that feels safe. Back in December, while Kyle Anderson is spending his days serving as state legislator, his wife, Machel, in her mid-50s, is busy taking care of her grandkids while her daughter recovers from back surgery, a very busy time in fact, Christmas is looming. Michelle is pretty frazzled and not getting much sleep.
[00:03:00] Kyle Anderson: So it was during this time that she received three voicemails from the Social Security Department saying that there was fraud associated with her Social Security number uh, and that she needed to call. And this wasn't completely out of the ordinary for her, because maybe a month ago, or a month prior to that, we had received a call, a legitimate call uh from our credit card company that just said, you know, uh we've got some potentially fraudulent charges on your credit card and we just, you know, please call us and, and we want to verify these charges.
[00:03:33] Michelle: Machel called and a concerned, official sounding man told her there were several bank accounts that had been opened using her Social Security number that the government believed drug cartels were behind it.
[00:03:46] Kyle Anderson: And uh he said, "But there's also more to this." And first, first he said, um, "I want to put your mind at ease, I want you to know that, that you can, you can know who you're talking to." So he gave her his name and said, you know, "You go to the Social Security Administration website, and you look me up, and then you'll know that you're talking to somebody from Social Security." So she did. She felt like that she was doing, you know, her due diligence to do that.
[00:04:14] Michelle: There was more. This agent told Machel a car had been found at the Texas/Mexico border registered in her name and covered in blood. Terrified, Machel listened to the man describe what was next.
[00:04:29] Kyle Anderson: Well, "You are implicated in this, and it is certainly implicated with the drug cartels, so part of what we need to resolve here and, and investigate is uh, I need to get you in touch with the Drug Enforcement Agency, DEA, because they, they are actually opening a case um, on you, and it's part of this big investigation that they're doing of the cartels." So he transferred the call to a man who identified himself as Uttam Dhillon from the uh DEA. And he did the same thing. He said, you know, "It's, it's completely reasonable for you to question this. So um, go to the DEA website and look me up." The man had a, had an Indian accent. And so when she looked and found his picture, uh, there he was, and he was of Indian descent. So it was clear, in her mind, that she was talking to this man from the DEA.
[00:05:27] Michelle: So she had zero reason to question...
[00:05:30] Kyle Anderson: Exactly.
[00:05:31] Michelle: This DEA agent told Machel that the cartels had opened multiple accounts using her information across the country, and at once the Feds closed in, which would be soon, those accounts would be seized and frozen, but so would Machel's legitimate bank accounts. Can you see where this is headed? He told her that to protect her money, they needed to move it all to a safe place, another account while all this went down.
[00:05:59] Kyle Anderson: They just warned her, "You just, you just need to understand, we're dealing with the drug cartels. They are watching you because they know whose account," ...they have set this up... "They are watching your every move. You have to make sure you act normal. You can't have any unusual activity in your account."
[00:06:15] Michelle: And even more important, the agent told Machel, she cannot under any circumstances tell anyone about this, especially not her husband.
[00:06:24] Kyle Anderson: "If you were to tell your husband, as a matter of fact, you can't tell your husband. If you were to tell him, and then he went down and, and uh started withdrawing money from those accounts, they would know, and your family is in danger. But also, if you don't cooperate with us, that you need to understand that you're a suspect in this, uh, and so if you don't cooperate with us, then we will come and arrest you." And they even sent her a copy of an arrest warrant. Now she just looked at it on the phone because she was pretty much believing what they said uh, and it was late, it was dark, she had a little baby in tow, and so she just thought, oh my heck, this is real. They told her exactly then what she needed to do.
[00:07:01] Michelle: God. And that meant gather everything up. Everything. In every account.
[00:07:08] Kyle Anderson: We had CDs, we had multiple accounts in different institutions, and she was to transfer all those funds, wire transfer to an offshore account in China. And so she was in the process of doing that. She was gathering everything from other banks and putting it into one account. Uh, she was cancelling CDs and taking penalties, everything associated with it.
[00:07:34] Michelle: We are talking more than $150,000 here.
[00:07:37] Kyle Anderson: Our goal was always when we could, we would save our money; when everything was paid off, we would, I would retire, and we would serve a mission together for our church. So we had we had been active savers. Uh, we had paid off our home, and we had a, a decent nest egg, so yes, we felt like we were very secure.
[00:07:58] Michelle: They had planned well for their future. But how do you plan for something like this? Machel felt she was doing the right thing to protect her family.
[00:08:07] Kyle Anderson: They were, you know, "If you tell your husband, then, you know, the first thing he's going to do is probably go try to protect your money. You cannot tell anybody. You need to understand your family's in jeopardy, and if you tell them and they act on this, the cartels are going to be after you." So, she knew that her family was in jeopardy. What they were telling her is, "It needs to be offshore because these are all domestic accounts that have been set up and so, all of those will be taken, so we need to take it offshore, but we'll, we'll move it right back."
[00:08:37] Michelle: That authoritative, yet reassuring voice on the phone stays with her the whole time leading her through the process, urging that it needed to be done immediately.
[00:08:48] Kyle Anderson: She went and wire-transferred the first big payment. They told her that she could keep, uh, it was Christmas, and they told her that she could keep less than $1000. And they made her take a picture of the receipt when she was done showing that there was less than $1000 in her account. They also made her write out a statement that said, "I will cooperate with the US government in this investigation," send that with a picture of her driver's license to them, which she did, and she just felt like whatever they said she needed to cooperate with.
[00:09:27] Michelle: Machel, at this point, is terrified. Terrified to keep her savings and willing to do whatever it takes to keep her family safe, having no idea what these drug cartels could be capable of if she made the wrong move. So she is now well on her way to emptying every account she and Kyle had. When the so-called agents asked Machel if that is everything, she tells them, well, Kyle had set aside a few thousand dollars to help with medical bills for their baby granddaughter, but these scammers tell her, no, she needs to wire that too. They even coach her about what to say at the bank.
[00:10:07] Kyle Anderson: They were on her phone in her purse, uh, and had told her uh, that they would be listening to make sure that she did it right and that, and that she didn't say anything out of the ordinary. And that she was to tell them that she was buying electronics.
[00:10:20] Michelle: God, this is like, it, it, it feels like a kidnapping with--, without the kidnapping.
[00:10:25] Kyle Anderson: You, if you could only understand, when I looked, I, I looked at the, the chain of texts and it was I, you know, I, I felt like my wife had, had just been abused. Um, it was like she'd gone through hell and back. They were, they, they were constantly prodding her and, and saying, "Now, now again, you make sure you don't tell anybody. Um, have you done this? Have you..." you know, just every, you know, "Is your husband getting, is your husband going to be at, at home? Is your..." I mean they were asking her just all of these questions just to keep her on the hook. And it, it made me sick to my stomach when I looked. It was like, it's like they had violated her.
[00:11:04] Michelle: But don't think these scammers were finished.
[00:11:07] Kyle Anderson: And then they said, "Are you sure, uh, that you got everything?"
[00:11:11] Michelle: They were going to take every penny they could. Machel tells them, well we had just cashed out some stocks that we were going to invest elsewhere, but that's in a check form now, so that should be fine, right?
[00:11:24] Kyle Anderson: And they said, "Oh no, that was drawn, uh from a bank under your Social Security number. That check will be worthless if you don't put that in there and protect it, uh, you know, by us, by us moving it out, then you'll lose all that money as well."
[00:11:39] Michelle: What had taken a lifetime to save, all gone in a few quick transactions.
[00:11:46] Kyle Anderson: And at the same time, she was running grandkids to school and to dance and to soccer and, and she was taking care of the little, we have like a little 18-month grandson. You just need to understand; my wife is an incredibly smart, smart woman. She's not easily fooled. Uh, she is trusting, but everything just aligned just right in such a weird way.
[00:12:09] Michelle: They got everything. However, these guys were not finished.
[00:12:15] Kyle Anderson: They called her again and uh then they said, "Is your home paid for?" And she said, "Yes." And they said, "Oh, we were afraid of that. We're going to have to secure your home. Your home's not safe either. And so that, it could get caught up in that seizure. Send us the value of 40% of your home. We estimate, you know, you need to get us another $200,000." And she said, "I couldn't do that. I would have to take out a mortgage. You now have all of our savings, and so I would have to take out a mortgage and I couldn't do that without my husband." And they said, "Well then, you need to, you, you don't understand the gravity of this. This is important and so, you need to ask friends." And so we have, we have one friend who was, you know, in a position that he could have that, that kind of cash. And, and so she went to him. And she said, "I can't, I can't even tell you why, but I need, I need to borrow $200,000." And uh, he said, "Machel, are you sure this is legit?" And she said, "I am. I can't really talk about it, Allen, but yeah, I am." And uh so he said, "Well I only have $65,000 liquid." This was on a Friday, and he, he said, "But I can get you the rest of it on Monday." And so she said, "Okay." And he started the wheels churning to get it. And that's when the inspiration came; now this has gone too far. This, I mean this doesn't seem like it's legitimate anymore. So then she went onto the internet and looked for DEA Social Security and boom, that it was immediate.
[00:13:50] Michelle: Oh, God.
[00:13:51] Kyle Anderson: She found what she needed. So she knew at that point that she had been scammed.
[00:13:56] Michelle: I can't even imagine what it feels like at that moment.
[00:13:59] Kyle Anderson: Oh, so yeah, and, and so I could tell that something was wrong. She was churning inside. She was unbelievably miserable.
[00:14:08] Michelle: Machel then says, "Everything's fine." But Kyle, deeply concerned now finally pulls it out of her.
[00:14:15] Kyle Anderson: I said, "Okay, tell me what's going on." And she started to cry. And I said, "Are you sick?" And she said, "No." And I said, "Are one of our kids, are one of the grandkids sick?" And she said, "No." And she started to sob, and she said, "I have done the worst thing I could ever do." And I said, "You've had an affair?!" And she, she said, "No, I haven't had an affair! I've given away every penny that we own." And uh so, you know, I mean it was, it, it was immediately a gut punch, but I also could see what she was going through.
[00:14:55] Michelle: I can feel her pain at this point.
[00:14:58] Kyle Anderson: Yes. Yeah, and so I just, I just said, "Honey, no one's dead. Uh, no one's sick. It's just money, and we'll be fine."
[00:15:08] Michelle: Well did you go; did you just go white at that point?
[00:15:12] Kyle Anderson: I did. As a matter of fact, I felt like throwing up. I felt, but again, I just felt like I needed to support her.
[00:15:18] Michelle: Yeah.
[00:15:18] Kyle Anderson: You know, it's like one of the few times in my life where I've had the right reaction. Just said the right things, and it was just, I just needed to reach out and tell her, "I love you, and it doesn't matter if we don't have that money."
[00:15:29] Michelle: Oh my gosh. You're, you're such a great husband to hear this.
[00:15:32] Kyle Anderson: Oh...
[00:15:33] Michelle: Like "Honey, I um, I gave away..."
[00:15:36] Kyle Anderson: Everything.
[00:15:38] Michelle: Kyle goes to work talking to the FBI, his banks, even a contact inside the Bank of China where the money went.
[00:15:45] Kyle Anderson: They could see the transfer; they could see everything about it. Um, but the money was gone, uh they, they said, "You know, these, there are, there are thousands of these accounts that are set up and closed every month, uh in China. And it's, it's like the clearing house for, for these kind of things. And there was nothing, there was nothing that we could do."
[00:16:06] :16:50] Michelle: Now if you haven't pick up on it already, Kyle and Machel are kind people, religious people; the kind who save up to do good things for other people, who volunteer, who take in an elderly sick neighbor to help care for her. So their community has rallied around them while they take things day by day for now. Kyle is not running for office again so he can go back to work fulltime. Machel, whom Kyle describes as an angel who used to teach special needs kids has already gone back to work at a dentist's office. She's even working on possibly starting her own business determined to replace what was lost. She's also testified before members of Congress to shed more light on these kinds of scams.
[00:16:50] Michelle: Is she okay? Is she still rattled?
[00:16:52] Kyle Anderson: She's rattled. She's doing okay, and you know, and she gets, she starts to get normal, and then, you know, that's why I asked that I do this and not her, is because then when she talks about it, first of all, she feels like an idiot, you know, she goes through the, "I'm the stupidest person in the world," uh, which she's not. The bruises haven't completely healed, that's for sure.
[00:17:15] Sean Reyes: So many of these white collar criminals, I believe, are sociopaths. They have no conscience, and they'll do it repeatedly, even after they're in prison, they'll continue their attempts to defraud people.
[00:17:31] Michelle: That's Sean Reyes, the Attorney General for Utah, who was elected on a platform of scam busting. He has devoted resources to trying to stop this problem which has been rife in his state for a long time.
[00:17:45] Sean Reyes: People are so welcoming. They will bring you cookies, they'll welcome you to the neighborhood, they will mow your lawn, they will uh, shovel your snow, but they also trust, and it's not hard to gain their confidence and their friendship, and a, a lot of fraudsters, uh, and historically have exploited that. That's why, when I came in, I said, we're going to chase these guys and gals out. And we've been aggressive about prosecuting white collar fraud, and uh, you know, I, I get calls from some of my colleagues who say, "Congratulations on flushing all those cockroaches out of your state, but guess what, they've, they've just traveled into our state, so let's keep working together, as we often do, across state boundaries to make sure that we're protecting all Americans."
[00:18:33] Michelle: He has seen lots of scams, but says these imposter calls are getting more aggressive, and he hasn't seen one quite like the Andersons where, remember that one agent the scammers were pretending to be, named Dhillon? He's actually the Acting Head of the entire DEA, and Attorney General Reyes has even seen scammers try to impersonate him.
[00:18:55] Sean Reyes: I've had people call and say, you know, "I think there's a scam. They're using the name of the Attorney General to say you owe this amount of money, or if you don't pay this, we will take a prosecutorial action."
[00:19:08] Michelle: His best advice is verify. Before you wire any money like this, call the DEA, call Social Security, call you State Attorney General's Office, or just start with googling or asking a friend. Something like that could be what saves you from a life-altering loss.
[00:19:25] Sean Reyes: Some prosecutors and some judges say, "Oh, white collar fraud, that's a victimless crime." I have seen families absolutely devastated. They've saved their entire working careers, their lives up and in one transaction, they have lost their entire life savings and now a husband can't take care of his sick wife, a father can't take care of his children, a, a mother can't take care of her kids. It's heartbreaking...
[00:19:53] Michelle: So Kyle Anderson, there in the Utah legislature, has been working on a bill that would require wire transfers overseas to get extra scrutiny from banks. He's not trying to shed any responsibility for this having happened, but you might be thinking, too, it was just stunningly easy for Machel Anderson to just, out of the blue, go to her bank and wire more than 100 grand from her local branch to some account in China.
[00:20:20] Kyle Anderson: If they would have asked questions and shared with her what they knew, that that would have helped.
[00:20:26] Michelle: I feel like I've had more problems, like I, it's been harder for me to buy a pair of shoes on my credit card from another country than it was for your wife to transfer $100,000 to China.
[00:20:40] Kyle Anderson: Oh, without, without a doubt. Yes.
[00:20:43] Michelle: Like my credit card comes back five times and says, "Are you sure? Are you sure this is a real pair of shoes?"
[00:20:52] Michelle: Kyle wants banks first to simply ask a few questions, tell a customer what banks commonly know about scams that are similar, and if they think the situation merits, they would be able to put a hold on the wire transfer while it's being looked into.
[00:21:06] Kyle Anderson: It doesn't require them to freeze the transaction, it says they may. Because what we're trying is, we're not creating a huge liability for them; there is a liability to them if they don't have the discussion and document the discussion. The freezing the transaction is, they can do that if they have reason to believe this person's being scammed. So it, you know, we're trying to make it not overly burdensome to the financial institutions, but to make sure that individual gets the information and to allow the financial institution to stop it if they feel like this person's being scammed.
[00:21:36] Michelle: As we saw in Machel's case, even just her friend asking a question was enough to wake her up from this scam fog she was stuck in. And just as the scammers would not be done with draining her accounts dry, Kyle's not finished with them yet either.
[00:21:53] Kyle Anderson: The other part of the bill is to prevent the financial exploitation of vulnerable adults and, and seniors. This part of the bill is, if a financial institution recognizes that a senior is being financially exploited, they can freeze their entire account until Adult Protective Services, law enforcement, family members have been contacted. So this is even if it's not a, a wire transfer, uh this is just, they can see that they're changing who's joined on their account, and it's a little nephew who's just befriended him, you know, all the things that happen when a, a senior is financially exploited, the banks are in a position to recognize that and so that it gives them the authority to do that again with, they, they have immunity if they, if they did this interacting in good faith.
[00:22:41] Michelle: This is all in the early stages, but Kyle's ideas are getting noticed and beyond Utah, in Washington and among groups that watch out for seniors. Kyle thinks he and Machel are going to be okay. Their plans have changed, but out of the ashes of their life savings has come a new mission.
[00:22:59] Kyle Anderson: You know, we had our cake and it was nicely iced. They got the icing, but they didn't get the cake, and so, you know, we'll still have our cake, we'll just need to re-ice it. Because it could happen to somebody who couldn't recover, who didn't have that pension, and, and probably has... that's the thing. Um, as a matter of fact, I, you know, as I, as I talk to people and one was a mother of six children who had $6,000 in the bank and they got that, but that was everything to her. So, you know, we're in a much better position. We're blessed, and, and there are others who are also suffering who are not in that same position. So, we just need to help everybody. We've had people call me and say, "I got those calls, and because of you, I hung up."
[00:23:38] Michelle: And you know what, that is the first piece of advice we get from the AARP, the FTC, you name it. When you get a call from the Social Security Administration, you should just hang up, immediately. If there is some problem or some information that's needed, the US government will contact you by mail, not phone. So don't believe it, just hang up. This goes for everyone, and it's easy to fall prey. Scammers of this type have netted cash most often from people between the ages of 20 and 59, and our Fraud Watch experts say, don't even trust your caller ID. It might say it's some big scary government agency, but even that can now be easily faked. Government agencies will also never ask you to pay with a wire transfer or a gift card; scammers do that. And that's a big red flag. What you can do if you get a message or even an email saying there's some problem, or maybe it's not a problem, maybe they're saying they owe you money, but to get it you first need to do a couple of things, is check with the agency directly yourself. That's always a pain and sometimes the waste of a perfectly good afternoon, right? But it's better than sending money to a scammer overseas and never seeing your savings again.
[00:25:00] Michelle: If you or someone you know has been the victim of a fraud or scam, call AARP's Fraud Watch Network Helpline, at 877-908-3360. Thank you to our team of scambusters; Executive Producer, Julie Getz; Producer, Brook Ellis; Associate Producer and Researcher, Megan DeMagnus; our Audio Engineer, Julio Gonzalez; and of course, Fraud Expert, Frank Abagnale. Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts. For AARP's The Perfect Scam, I'm Michelle Kosinski.
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