The scheme starts with a phone call and a frightening message.
You鈥檙e about to be arrested for tax fraud or deported from the country鈥攗nless you head immediately to a Bitcoin ATM and pay a fine or fee.
The person on the other end of the line is neither a Canada Revenue Agency agent nor an immigration officer, but a criminal looking to defraud you, according to a on Friday.
Toronto police issued a warning after noticing 鈥渁 significant increase鈥� in calls from victims who report having been defrauded of thousands of dollars in this way.
The phone calls often come from fake numbers created online through technology that allows the perpetrators to change phone numbers and spoof caller IDs.
This technology makes it challenging for law enforcement to track down the numbers, but the task becomes even more difficult if the schemes operate overseas.
While similar schemes have been around for a number of years, the requested method of payment is changing.
鈥淚n the past, [the scammers] would ask people to send wire transfers or to buy iTunes cards,鈥� Det. Sgt. Ian Nichol with the Toronto Police Service鈥檚 Financial Crimes Unit told CTVNews.ca. 鈥淧eople would take the number off the card and then send it to the person involved, and it would find its way onto a website where it would be sold for profit.鈥�
Now, scammers are asking victims to make their payments in Bitcoin or other cryptocurrencies.
Bitcoin is an almost perfect instrument of crime, Nichol said.
鈥淥ne of the advantages of using Bitcoin is that once you pass it along to another e-wallet, it is very difficult鈥攊f not impossible鈥攖o trace,鈥� Nichol said. 鈥淭here are some possibilities that we can exploit, but if the wallet happens to be located outside of the country, our chances of identifying the person who is receiving the funds is next to none.鈥�
Toronto police do not have statistics on the number of victims of such crimes, but say that there has been 鈥渁n uptick鈥� in reports from victims.
In Edmonton, police say that from January 2017 to February 2018, and said that fraudsters took more than $300,000 from them. More than 75 per cent of the cash that went to the perpetrators during that time was sent using Bitcoin.
Part of what makes these crimes so difficult to track, Nichol said, is that the vast majority of them go unreported.
鈥淭he people who are victimized by it actually believe that they are in some kind of difficulty and don鈥檛 question it,鈥� Nichol said. 鈥淲hen they do figure it out, they are less inclined to report it out of embarrassment. Many of them don鈥檛 even know that they have been victimized.鈥�
Toronto police stressed that the CRA does not send payment notices or ask for personal information through phone calls, text messages or emails, and added that it will never ask for payment of a fee or fine in Bitcoin or any other cryptocurrency.
鈥淭he CRA will never, ever phone you up and threaten to throw you in jail,鈥� Nichol said. 鈥淚t will never happen.鈥�
Toronto police is asking anyone who may have been a victim of such schemes to contact the police and is advising shop owners with Bitcoin ATM machines to display messages on their machines warning users about the existence of these schemes.
