Americans Lose $3.82 Billion to Crypto and ‘Phantom Property’ Investment Scam

The American public is being alerted to the proliferation of fraudulent investment schemes. Crypto and ‘Phantom Property’ scams have so far been responsible for $3.82 billion in losses.

Americans have been subjected to unprecedented levels of crypto and phantom investment scams, with $3.82 billion lost so far. It is estimated that 4,982 Californians lost $870 million to investment fraudsters in 2022, the highest amount lost among any state. From 2021 to 2022, investment fraud accounted for a 128% increase in money stolen. 

Based on a recent study by the investment fraud lawyers at Carlson Law, most losses are reported from California, followed by New York, Florida, Texas, Washington, and New Jersey. A total of $306 million was stolen from Florida residents, $235 million was stolen from Texas residents, and $173 million from New Yorkers, and $110 million from New Jersey residents.

Investing in a fraudulent scheme that promises lucrative returns is an example of investment fraud. Various forms of fraud are used to encourage victims to invest in fraudulent cryptocurrencies, ponzi schemes, and even phantom properties. During recent scams, artificial intelligence has been used to convince victims to invest in schemes that do not exist in reality. 

According to the Federal Trade Commission (FTC), investment fraud cost Americans $3.82 billion in 2022. In comparison, the previous year’s loss of $1.67 billion was an increase of 128%. Cryptocurrency investment schemes are thought to have contributed to the increase, with Americans losing $2.57 billion last year alone through these schemes. There was almost a threefold increase from 2021 to 2023.

Following a warning by the Secret Service, the announcement is the latest indication that cryptocurrency scams are on the rise. The scam involves luring victims into romantic relationships before convincing them to invest in fictitious cryptocurrency schemes.

Maryland, Washington, Arizona, Illinois, and Massachusetts have lost more than $435 million to investment fraud, making up five of the top ten states for investment fraud losses. Many states lost the most money last year, especially the most populous ones. Investment fraud was also most prevalent in California. San Francisco is known as the American cryptocurrency capital because it is home to the tech haven. Besides ranking first in total losses, it was also ranked second in average losses per victim – $176,463, and fifth in highest people impacted with a 12.6% rate per 100,000 residents, respectively. 

Among the states with the greatest average losses per victim, New Hampshire topped the list – with each victim losing on average $204,447. Approximately, $163,565 was taken from Nebraska residents, whilst $161,472 and $156,790 were taken from Wyoming and Kansas residents. 

There was a high prevalence of fraud in the District of Columbia. Among the 100,000 residents of the district, 26 complaints were filed with the FBI in 2022. According to complaint data, Maryland had the highest number of investment fraud complaints, with 17.5 per 100,000 residents, whilst New York had the lowest number, with 17.1 per 100,000 residents. Further, the study warns Americans against ‘Phantom Property’ scams, in which criminals trick investors into believing they are investing in a real investment opportunity when it is not.

Fraudsters advertise online properties at low prices with the promise of quick profits and then demand an upfront payment before disappearing. Artificial intelligence is increasingly being used by scammers in order to trick individuals into investing in ill-advised projects through the creation of deep fake celebrity videos.  

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