Scam Victims Taxed on Stolen Money

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[00:00:01] Bob: This week on The Perfect Scam.

[00:00:04] Chester Frilich: I constantly was waking up in the middle of the night, during the day I was shaking a little bit, I was just totally distraught. My mind was just spinning every day. I was just trying to hold it together. You know, I just go in, I can't express how sick my stomach felt doing this. Because you don't, you know, sometimes the government doesn't do the right thing and clear you properly or clear you right away. And I'm thinking, oh my God, if they don't find evidence that I'm innocent, then what? Am I going to jail?

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[00:00:44] Bob: Welcome back to The Perfect Scam. I'm your host, Bob Sullivan. Imagine you've just had everything stolen from you. Every last penny from your checking account, your retirement accounts, taken by a criminal. You're staring into that abyss, wondering how you'll survive in the future, buy food, pay any of your bills. And then, at your lowest moment, one more bill arrives, from the IRS. You owe taxes on the money that was stolen from you. Tens of thousands of dollars in taxes. How can this possibly be real? Unfortunately, it's not my imagination or a nightmare that you can wake up from. It's all too real. In fact, it's a trend. Scam victims around the country are getting hit with huge tax bills thanks to what seems to be unintended consequences of a change in the tax code a few years ago. There are proposed legislative fixes for this shocking state of affairs. In a moment, you'll hear from two U.S. Senators, one from each side of the aisle, who have introduced a bill in Congress to fix this situation. But first, I want you to meet Chester Frilich, who is living this very nightmare.

[00:02:00] Chester Frilich: I did work in the security field and I also sold forensics and I worked in marketing.

[00:02:06] Bob: Forensics? What does that mean?

[00:02:08] Chester Frilich: Basically, when the police go to a crime scene, they need all sorts of specialized things like powder for fingerprints. Lifters for footprints, casts for footprints, forensic, uh, lights for detecting where people have been and what they've touched. And I used to make the catalog and find the products and sell it to them.

[00:02:33] Bob: This sounds like you worked on a crime TV show.

[00:02:36] Chester Frilich: Uh, it may, but it wasn't. It was a private company that sold all the forensics to different, I sold it to the FBI, to local law enforcement, to sheriffs, to Department of Justice, everybody around the country.

[00:02:52] Bob: This means you know a lot about crime, I guess.

[00:02:54] Chester Frilich: I, about the crime, as far as what they need to investigate different crime scenes, yes.

[00:03:02] Bob: And you're retired now?

[00:03:03] Chester Frilich: Oh, yes.

[00:03:04] Bob: How long have you been retired?

[00:03:06] Chester Frilich: Well, let's see, about 10, 11 years.

[00:03:07] Bob: Oh, good for you. That's great. What, what have you been doing in your retirement?

[00:03:13] Chester Frilich: Um, I have a dog and I visit the dog park every day and I help people train their dogs there for free.

[00:03:18] Bob: Do you really? That's great.

[00:03:19] Chester Frilich: Yeah.

[00:03:20] Bob: I'm a dog person as well. Not, not enough people spend the energy they need training their dogs, I don't believe it. Do you have, as long as I have you here, you have one 60 second dog training tip that most people don't think of?

[00:03:30] Chester Frilich: Most people do not realize they'll start to train. And they, they don't do it all of the time. If you are not constant, you're not going to have a dog that's going to respond to you continuously. That's the biggest issue in training people. As I said to one lady who wasn't consistent, I said, well, are you consistent? And she said, most of the time. And I said, that's wonderful because you're going to have a terrible dog. For 16 years, the dog's like a two-year-old. If you do not train it within the first two years, you're going to have a terrible time in life.

[00:04:10] Bob: Uh, you are, have a lot of wisdom, I can tell. So yelling, stop eating all of my socks, that's not going to work.

[00:04:16] Chester Frilich: No, that is not going to stop the dog.

[00:04:21] Bob: Chester was on his way home from some training sessions at the dog park one day this March, when a phone call knocked him for a loop.

[00:04:29] Chester Frilich: A phone call from Xfinity. And they said their system detected large amounts [00:04:00] of data being transferred off of my system, and they suspected I was being hacked.

[00:04:42] Bob: He'd been hacked. Chester is immediately alarmed, but the man on the other end of the line tells him he can get the situation under control.

[00:04:50] Chester Frilich: He suggested I change the router's password, the Xfinity router's password, and the Wi Fi section. And I didn't have the Xfinity passwords. He did. So he gave me Xfinity passwords so I could change the passwords.

[00:05:10] Bob: Were you shocked? How did you feel?

[00:05:11] Chester Frilich: I was a little surprised that, uh, well, I felt that he was for Xfinity. So actually I thought, that's pretty good. I didn't realize that the settings were set too low. So I thought, okay, this, this guy's legit.

[00:05:26] Bob: Sure. Sure.

[00:05:27] Bob: The operator asks Chester if he can take control of his computer. So we can help with some necessary security changes. Chester agrees. And after he gains remote access, things go from bad to worse.

[00:05:42] Chester Frilich: And they got onto my computer and they started to run programs to analyze the computer. After they finished, they informed me that somebody had hacked the computer, they had gotten in via the router hotspot, and then entered to my portion of the router, and that somebody had opened a crypto account overseas. I think it was, uh, I forget where they said what, I think it was Nigeria, they said it opened up.

[00:06:13] Chester Frilich: And they were going to have to send somebody out, to change out my equipment, and that normally it would cost 1,000, but it wasn't, they weren't going to charge me, it was all going to be done for free, and they were going to come out in two days.

[00:06:27] Bob: So he doesn't have to worry about the computer, it'll be fixed, and Chester figures he's dodged a big bill for that.

[00:06:33] Bob: But, because of the crypto account opened in his name, well, the case is more complicated.

[00:06:40] Chester Frilich: Well, he says, yeah, and he said they're going to notify the FTC because there's wire fraud involved. Uh, within an hour, a gentleman called James Brown calls and he says, I'm James Brown from the FTC. He gives some ID number and he says, you've been accused of wire fraud. Have you ever been to Texas? And I said, no, why? And he says, well, somebody opened up an account in your name and rented an apartment in Texas three months ago. And I said, well, I haven't been out of the state of California for 10 years. And he said, okay. And he says, um, He had the Xfinity information, and then he said, well, you're being accused of wire fraud plus selling pornography overseas. And I'm going, what? And he says, what we have to do is we're going to start an investigation, but we're going to have to freeze all your accounts, including your social security. Now I'm starting to panic. And I go, if you stop my social security, I have nothing, and close all my accounts, I have nothing to live in, live on. How am I supposed to pay all my bills? And he goes, well, if you cooperate with us, we'll allow the security, the social security to continue. So at this point, I said, of course, I'm going to cooperate with you. All of what you're accusing me of is false.

[00:08:15] Bob: Of course, I'm going to cooperate. All of what you're accusing me is false. So what do I have to do? Chester asks.

[00:08:21] Chester Frilich: Okay, so what we need you to do is sign a non disclosure agreement. Because we don't want you to talk to anybody about this, because they will be part of the investigation. We will be having people watching your home, and possibly following you, until the investigation is finished. And at that point, I'm pretty shooken, you know. He says, whenever you leave the house, and come back, you have to call me. And whenever you, you make a transaction to pay a bill, you have to notify us. Uh, it was like big brother,

[00:09:02] Bob: so he can't spend a penny without calling this man. But, there's more.

[00:09:08] Chester Frilich: And so I start to do as he says, and I go, he says, you're going to have to go to a bank and pull out some money and we'll tell you which bank and what funds to take out and how much. Then you'll return to the house, wrap it up in a box, label the box with the code number we will give you, which is your account number. We're going to take your money and put it into a secure wallet with the U.S. Treasury, and it'll be held there until the investigation's over.

[00:09:37] Bob: His money will be held in a special account until the investigation is over? Chester is panicky, but he hangs up the phone and awaits more instructions. That call, from someone else who says he works at the FTC, comes quickly. Withdraw thousands of dollars from your bank account, the caller says, then put the cash in a box. He does that, and then gets another call.

[00:10:03] Chester Frilich: He says, okay, we've sent out a courier. The courier will be at a certain time. He came. He says when the courier comes, the only thing you're to ask him is for the password. And I will give you the password. Don't give him the box unless he gives you the password. And sure enough, a man appears, he gives me the password, and I hand him the box.

[00:10:25] Bob: So Chester has put a large percentage of the money in his checking account into a box, and given it to a stranger at his house, hoping it will go into this protected account with the U.S. Treasury. Sure enough, he gets a confirmation email for the deposit. Then, he's asked to withdraw more money, much more, in this case, from his retirement IRA, and follow the same procedure, put the cash in a box, and then hand over the box to a stranger with a password. He does this a couple more times until, after a week or so, the instructions change slightly.

[00:11:00] Chester Frilich: In one case, they had me buy gold from a company, and before I bought the gold from the company, I verified the company was valid, and when I got to the bank uh, and took out the money and had them transfer the money while I was there. They, uh, said yes, they recognized the company, and it was a valid company to, to purchase gold from. They mailed me the gold, and when I got it, I called the FTC, and he says, before you do anything, photograph the bars and photograph the information that you're giving. That comes with it prior to giving it to our couriers.

[00:11:38] Bob: And they just a day or two later, just somebody came by and picked up the gold.

[00:11:42] Chester Frilich: Yeah. The next day, the guy came over, the courier came over, had the, had the security word for the day and I gave him the bars.

[00:11:52] Bob: But all the while, Chester is feeling worse and worse about everything that's happening, about the accusations, the visitors, the gold.

[00:12:02] Chester Frilich: I constantly was waking up in the middle of the night, during the day I was shaking a little bit, I was just totally distraught. My mind was just spinning every day. I was just trying to hold it together. You know, I just go in, I can't express how sick my stomach felt doing this. Because you don't, you know, sometimes the government doesn't do the right thing and clear you properly or clear you right away. And I'm thinking, oh my God, if they don't find evidence that I'm innocent, then what? Am I going to jail?

[00:12:38] Bob: Am I going to jail? The thought haunts him everywhere. And still, he keeps following instructions and hands over the boxes of money to visitors. Until the instructions change one more time.

[00:12:52] Chester Frilich: They said, we don't have somebody in your area. You're going to have to mail the package to one of our agents in Huntington Beach, California. So, we don't want anybody to know what's in the box. What I want you to do is write down that it's photographs and some other stuff. Take the money, wrap it up in bubble, put a shirt around it. and mail it UPS to this gentleman down south.

[00:13:21] Bob: But something different happens when he mails the cash this time, and it's the second time in a couple of weeks that Chester's life is suddenly turned upside down.

[00:13:31] Chester Frilich: After the package got sent, the Concord Police Department shows up at my door. And the officer says, uh, are you Chester Frilich? I go, yes. And he says, well, we have some questions about a package that you mailed. Down to Huntington Beach. And I said, yes, I mailed that package. I was informed to do so by the federal government. Uh, it contains $8,500. And he says, well, I hate to inform you, but that's all a scam. And I can't explain how sick I felt at that point, um, because I've at that point lost over $200,000. All my life savings is wiped out.

[00:14:15] Bob: $200,000. His life savings. All gone. But in the shock and terror of it all, there's a tiny silver lining. Someone at the UPS had flagged the package as suspicious, and that led to this visit from the police, which ended his nightmare. For now.

[00:14:35] Chester Frilich: And the strange part is, after I realized it was a scam, I felt a little bit of relief because it was over. I, you know, yes, I lost all the money, but this guy wasn't calling me up, terrorizing me every day. And that's what it felt like. I mean, I'm dealing with the loss of the money, but at least I'm not being terrorized.

[00:14:57] Bob: Chester now follows the instructions the police give him. He fills out a police report. He talks with detectives. He contacts the UPS facility where the package was sent. But nothing works. That $200,000 is gone. Forever. Even with all the paperwork, even with some video footage he had shared with police.

[00:15:19] Chester Frilich: And I gave that to Concord PD who contacted the Secret Service, and they said, "Yeah, it went overseas, and the minute the money got there, they took the money and closed the account, and there's no way to track them."

[00:15:33] Bob: Chester walks around in a fog for a few days trying to figure out how he'll live without his savings, how he'll get by on social security alone when he realizes the nightmare might not really be over. Something's gnawing at him, something he heard from his financial institution when he cashed out his retirement accounts.

[00:15:53] Chester Frilich: Well, what I did was I wondered if what I took out was taxable, because when you take out from your IRA and CD's, they say, do you want us to take out the tax? So I called the IRS, and I called the state, and I said, here's what happened. The IRS says, well, yes, all of that money, even though you were frauded, is taxable because you pulled it out. And between them and the state, they figured it was about $32,000 that they owed in taxes. And I said to the federal guy, I said, well, how do you expect me to pay for this? I've been wiped out. And he says, “Well, we have different programs, which you can uh, borrow money from us and pay it back over time, if you have enough income to pay for it. But if you don't, then we're going to have to lien your property.”

[00:16:51] Bob: A $32,000 tax bill? We're going to put a lien on your property? How could that possibly be? But it's true. And that's not all.

[00:17:02] Chester Frilich: So I called Medicare and I had told them, “Gee, I got scammed.” And the IRS told me, one, because of the amount I took out, what was it, $6,000 or more of my social security was going to be taxed because I took out over $100,000. And my Medicare bill would also go up because they would show all that money that I took out as income, and Medicare is based on income. So I'm thinking, well, how am I supposed to pay double? The Medicare payment, plus pay somebody back for all this money that I've got on social security and still be able to buy food and take care of my household, and the answer is I haven't completely figured that out yet.

[00:17:54] Bob: Chester, his savings now reduced to nothing, finds himself with huge tax bills, facing a Medicare increase, and even more taxes taken out of his social security check. It sends him to a very dark place.

[00:18:12] Chester Frilich: Oh, that cost me a lot of sleep and a lot of night terror. Fortunately, there were people at the dog park that I knew very well. Um, I, I almost felt like committing suicide. And I had considered it. Because I just wanted out. I'd lost everything. And it was my intention to give that to somebody that I love, my house when I die, and money so that they could have a good life. And it was gone. My dream of doing that was gone. So I'm just going, what do I have? Um, and I have the dog, and I thought about it, and I said, I can't leave the dog.

[00:18:56] Bob: Now is a good time to share that if you or someone you love is in crisis, you can get immediate help by dialing or texting 988, the Suicide and Crisis Helpline, where trained professionals will talk with you right now for free and offer a sympathetic ear and that important immediate help. Chester's love for his dog helps keep him going.

[00:19:18] Bob: What's your dog's name?

[00:19:21] Chester Frilich: Cassie.

[00:19:21] Bob: Cassie. How old is Cassie?

[00:19:23] Chester Frilich: Cassie is 12 years old and she's a female alpha Siberian Husky.

[00:19:29] Bob: Oh boy. You wouldn't dare leave her.

[00:19:33] Chester Frilich: Oh, no. She's wonderful. She protects puppies, and pregnant ladies, and babies. If a dog comes near it, she runs over and makes sure that dog does not bother it.

[00:19:50] Bob: And Cassie protects you, too?

 [00:19:53] Chester Frilich: Yes.

[00:19:54] Bob: Chester's story sounds, well, it doesn't make sense that a victim whose money was stolen from their retirement account would have to pay income taxes on that money. But it's true. A recent report commissioned by the U.S. Senate Committee on Aging, called Scammed Then Taxed, has found endless examples of this.

[00:20:15] Bob: Okay, so somebody who's listening to this has to think to themselves. You've been through hell and now the IRS is saying, well, you owe us $30,000 or whatever. What do you think of that?

[00:20:28] Chester Frilich: I'm just trying to go day by day and do the best I can. And that's how I'm living right now is day to day.

[00:20:36] Bob: I mean, do you think that's fair?

[00:20:37] Chester Frilich: No, because I was brought up that the government protects you. And that has turned out to be false. Not one agency has gone after these people. To this day, the phone numbers they use to scam me are still active. I talked to the FTC. I talked to the FBI. I talked to IC3. I wrote letters to the congressmen. I wrote letters to the senators. Everybody came back and said, well, there's nothing we can do. And the government agency said, we don't help individuals. And I'm thinking, What good are you if you're not helping and going after these bad guys and you still haven't shut them down and it's been months later?

[00:21:25] Bob: It's just utterly remarkable, but it's also it's such a kick in the teeth when you're at your worst.

[00:21:30] Chester Frilich: Yep. But there's nothing if if you get scammed and you take out the money, there's nothing you can do about it. You're wiped out. I don't think people should be victimized multiple times after they've been scammed. I mean, the IRS and the state and Medicare are all victimizing the victims of fraud. I don't see how that's really just in our society. You know, the government is supposed to take care of you, not penalize you for thieves stealing your money.

[00:22:09] Bob: This tax penalty exists because tax agencies view the withdrawals from these tax advantaged retirement accounts as income, even if the money just flows right to a criminal.

[00:22:22] Chester Frilich: It's income because I took the money out of the bank. And even though I can prove it's a scam, the IRS says it still counts as income. You pulled the money out. And the state says the same thing. And Medicare says the same thing. And then these agencies say, no, we can't help you. So you're on your own. You get scammed, you're on your own.

[00:22:49] Bob: You get scammed, you're on your own. That's a lonely feeling.

[00:22:52] Chester Frilich: Yeah.

[00:22:53] Bob: That report from the Senate Special Committee on Aging cited other victims like Chester. One had $765,000 stolen. And though the IRS More than $220,000. The report also included the example of romance scam victim Kate Kleinert, whose story we've told on The Perfect Scam. She had $39,000 stolen from her, and then her tax accountant delivered the shocking news that she owed $5,000 in federal taxes on the losses. The report found other kick em when they're down impacts of scams, too. They may impact eligibility for public benefits, like subsidized housing and the Supplemental Nutrition Assistance Program, or SNAP, benefits. Some scam victims who withdrew retirement funds have been forced to pay up to $419 more per month for their Medicare Part B premium, according to the Senate committee. But there is an effort to change the law. And to stop these secondary impacts on scam victims, several pieces of legislation have been introduced in Congress which would prevent scam victims from ending up with big tax bills. One of those proposals, called the Casualty Loss Deduction Restoration Act, was introduced in 2023 by a bipartisan group of U.S. Senators led by Republican Bill Cassidy of Louisiana and Democrat Richard Blumenthal of Connecticut. Both Senators are here today to explain to us what their legislation would do. But first, here's AARP government affairs official Clark Flint-Barr to offer a little context. It turns out, things haven't always worked this way.

[00:24:33] Clark Flynt-Barr: There used to be a tax deduction that people could leverage here that helped to sort of mitigate. what you owed. So prior to 2018, households who itemized their deductions could deduct their unreimbursed losses that arose from property losses like fire, storm, flooding, etc. or from theft losses from their income when they were filing their taxes. But in 2017, Congress passed the Tax Cuts and Jobs Act, and one of the things that they did was they consolidated and removed a number of deductions, including the casualty and theft loss deduction, which they tweaked. So, what they did is, for theft losses, they mostly removed that.

[00:25:17] Bob: Clark thinks taxing scam victims was an unintended consequence of the tax law.

[00:25:23] Clark Flynt-Barr: I think truthfully, fraud was just not at the forefront when this tax bill was being written and when these deductions were being considered. And I think if you look at the, the lost numbers that we see now reported from federal agencies, they have all jumped dramatically since 2018. And so I think it's just something that Congress perhaps wasn't doing intentionally, but They weren't hearing from people that this was needed because I think fraud has really, and fraud losses, have really taken off in the past five or six years.

[00:25:58] Bob: But given the large number of victims now, and advocacy from organizations like AARP, lawmakers in Washington, D.C. are taking notice.

[00:26:10] Senator Blumenthal: These kinds of fraud losses are so common and heartbreaking.

[00:26:15] Bob: That's Senator Blumenthal, a Democrat of Connecticut, who talked with us about Chester's situation and his $32,000 tax liability.

[00:26:24] Senator Blumenthal: It is hard to swallow, almost beyond words. It is so contrary to what we think are the basic notions of justice that a government agency should be living by. You know, it adds additional injury to the injury already suffered by Chet and his family.

[00:26:50] Bob: Senator Cassidy is a physician and practiced medicine before becoming a lawmaker, so he's got a particular interest in making sure people like Chester are able to continue to live a full, independent life.

[00:27:03] Senator Cassidy: Our goal as Americans should help fellow Americans. Our goal should be that people live in independence, not in dependence. Being financially secure is part of living independently. So our goal here with our legislation is to allow someone like Chet to continue to live independently by getting a credit for the fraud that he has been subject to.

[00:27:26] Bob: Even if Congress doesn't act on the Blumenthal Cassidy proposal, it's possible that relief will come for future victims. The 2017 tax cut legislation is set to expire in 2025. And if Congress does nothing, federal tax law will revert to pre-2017 provisions, meaning deductions for fraud losses will be restored.

[00:27:48] Senator Cassidy: There will be a tax bill next year, and so it can be included in that. Now, it's also possible that if, for whatever reason, nothing happens in taxes next year, that the previous law comes back into effect, and once more there'd be coverage for fraud and for casualty loss. And so either way, I think we're going to be able to address this next year.

[00:28:11] Bob: But, if the old deduction is restored by default in 2025, that wouldn't help people like Chester, who've been hit by scams and faced this tax liability for the past eight years. So, the Casualty Loss Deduction Restoration Act, introduced by Senators Cassidy and Blumenthal, would be retroactive. It would basically, overnight, relieve the tax burden that Chester, and people like him, are staring down right now.

[00:28:37] Senator Cassidy: And of course, it's more expensive to go retroactively, but again, we're about Americans helping Americans. So I can't guarantee that we're going to be able to pass this law as it is. But again, something positive is going to happen next year, and I hope it's a law that Blumenthal and I are working on.

[00:28:51] Senator Blumenthal: We want, basically, fairness done for those people who suffered losses between 2018 and 2025, and there still exists the possibility that it could be extended.

[00:29:01] Bob: Senator Blumenthal said he's not giving up hope that their legislation might be considered before this legislative session ends.

[00:29:08] Bob: What are the obstacles to passing that, and can you, can our audience do anything to help?

[00:29:13] Senator Blumenthal: Our audience can contact their senators and members of Congress. To urge that this measure be adopted in the closing days of this legislative session. We have only a limited amount of time between now and the end of the year when this legislature goes out of session. A new one begins in January. We could, again, consider it in January, but I still have the hope that we may be able to pass it this year. And the obstacle really is. The limited amount of time and also the potential fiscal impact. In other words, the IRS is collecting money from seniors who've suffered losses unfairly and unjustly, but it's still money coming into the coffers of the United States, and that fiscal loss may weigh on the minds of some of my colleagues. That's one obstacle. The other is simply, potential partisan politics, you know, the politics that seem to cause dysfunction. This measure is bipartisan. Senator Cassidy and I, he's a Republican from Louisiana, have led this effort to restore the tax credit, helping victims of fraud as well as natural disasters. There should be a big constituency for it because a lot of people have suffered losses as a result of the recent hurricanes and other natural disasters which are also covered here. That's one of the reasons why I mentioned it at the outset.

[00:30:47] Bob: Mm hmm.

[00:30:47] Senator Blumenthal: But we need support.

[00:30:50] Bob: But you're hopeful that there's a chance it could get taken up before the end of the year, the end of the session?

[00:30:54] Senator Blumenthal: I'm always hopeful, particularly with a bipartisan measure like this one, and the pressing, heartbreaking losses suffered by people as a result of the recent hurricanes and other natural disasters, and potentially even ongoing in the next couple of months as we go through the beginning of winter. So yes, I'm, I'm very hopeful and I'm going to be fighting for it.

[00:31:21] Bob: AARP supports the Blumenthal Cassidy legislation, by the way. Now I know contacting legislators, sending letters, making phone calls, can seem hopeless. But it's not, Clark says. She recommends reaching out to your representatives in both the Senate and the House, where there is a companion bill. As Perfect Scam listeners know, losses due to fraud are skyrocketing, endangering Americans of all ages. I asked both senators what role Congress should play in dealing with the crisis.

[00:31:52] Senator Blumenthal: I've been fighting this kind of fraud for a long time. And what I think is necessary is essentially more resources devoted to agencies like the Federal Trade Commission, the Department of Justice, the Attorneys General of our states need more resources so they can prosecute more effectively. And second, more public education. That's why I'm so grateful to the AARP for this Perfect Scam podcast. I think that you're alerting seniors as to the dangers out there can do tremendous good. You know, an ounce of prevention is worth a pound of cure.

[00:32:32] Bob: I asked Senator Cassidy what role he thinks large tech companies could play in stemming the tide against fraud.

[00:32:39] Bob: Every single scam story that you hear begins with an instant message, an image that's stolen, email, cryptocurrency, all those technology tools which can do wonderful things but they can also enable crime. Do you see a bigger role for big tech in protecting people from these things?

[00:32:55] Senator Cassidy: Absolutely, and we know that with the advent of AI, it's going to be even more difficult. AI can mimic someone's voice. So we're all used to the scam of somebody who's in Nigeria, who wants to give you a lot of money, da da da da da. But what if it's now mimicking your daughter's voice? And she's calling you from some place with panic, saying, Mom, Dad, my car is broken down. I'm in the middle of the road.

[00:33:15] Senator Cassidy: Can you Venmo me money? My phone's stolen, but my friend's here with me. So we've got to come up with, one, people need to be aware of this. But I do think as we look at AI and its great potential, we also have to recognize it has some potential for harm. And we have to think about how to regulate that.

[00:33:32] Bob: Chester is aware of legislation that would help him in his situation, but at the moment, he's still staring down a huge tax bill and has little hope of paying it. So, he's living day to day.

[00:33:46] Bob: People are going to want to know, how are you doing now?

[00:33:48] Chester Frilich: Some days I'm doing okay, and some days I really am in a dark place. But going to the dog park every day and being with the dog and talking with people I know and people helping me really gives me hope. And so that's what I'm working on. And some days are really good and some days are really dark.

[00:34:13] Bob: He has received help from friends, especially friends at his local dog park. One woman even set up a GoFundMe campaign for him. It's been a mixed bag.

[00:34:24] Chester Frilich: And people have been very generous. Some people have accused, have actually online accused me of scamming. Some people have called me senile or I have dementia. It has taught me a lot about human nature. You have people out there, even if you do nothing wrong and something happens to you, for some reason, they think they have the right to attack you. Fortunately, there's a lot of good people out there who are not like that, but it's still shocking that people will attack you when you're down.

[00:34:58] Bob: I asked Chester what he would say to government officials if he had the chance to speak directly to them.

[00:35:04] Chester Frilich: I would say to them, why are you allowing people that have been scammed out of their life savings to be penalized by our federal agencies and put them in a worse situation than they already are? Why aren't you at least taking the tax burden off of them and the Medicare burden of extra payments off of them so they can have a chance at existing? Because they're starting with nothing and they have to pay their bills. I'm lucky I have a good network, a lot of people don't, and a lot of people will probably commit suicide over this thing. I know I contemplated it, and it's not a fair system. It's not why they're in government, they're there to protect the individuals, not to just go for the money.

[00:35:59] Bob: And that's why Chester agreed to share his story with The Perfect Scam. Because he's worried others who end up discovering this kind of terrible double punch to the gut might be suffering silently.

[00:36:12] Bob: If somebody else is going through exactly what you're going through right now, and hopefully it'll reach them at just the right time.

[00:36:17] Chester Frilich: I hope so. Because This is extremely embarrassing, but after a while, I thought about it and thought, if I don't speak out, and people who've gone through this do not speak out, these scammers are going to continue to get away with it. We've got to get the government to go after these people more briskly. Because now I know it happened to me, and as I'm sitting here, it's happening to somebody else.

[00:36:47] Bob: For The Perfect Scam, I'm Bob Sullivan.

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[00:36:57] Bob: If you have been targeted by a scam or fraud, you are not alone. Call the AARP Fraud Watch Network Helpline at 877-908-3360. Their trained fraud specialists can provide you with free support and guidance on what to do next. Our email address at The Perfect Scam is: theperfectscampodcast@aarp.org, and we want to hear from you. If you've been the victim of a scam or you know someone who has, and you'd like us to tell their story, write to us. That address again is: theperfectscampodcast@aarp.org. Thank you to our team of scambusters; Associate Producer, Annalea Embree; Researcher, Becky Dodson; Executive Producer, Julie Getz; and our Audio Engineer and Sound Designer, Julio Gonzalez. Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts. For AARP's The Perfect Scam, I'm Bob Sullivan.

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