CLEVELAND, Ohio — A Northeast Ohio man lost $1.3 million in a cryptocurrency scam after using an app that looked almost identical to a real app.
Scammers tricked the 68-year-old Holmesville man into believing his cryptocurrency investment had reached $15 million. When he tried to withdraw his money, the group refused, according to court records.
FBI agents arrested a man last month on suspicion of being a courier for the scammers. Lin Kai, of New York, is charged with conspiracy to commit money laundering.
U.S. District Judge Amanda Knapp ordered Kai released on $20,000 unsecured bail and turned his case over to a federal grand jury to decide how it would proceed. A message left with Kai’s attorney, Jeffrey Lazarus, was not returned.
The 68-year-old Holmes County man told investigators the scam began in late August or early September, when someone with the pseudonym Caitronia Lee sent him several messages on Facebook regarding interest in man for hunting.
The two men discussed man’s desire to hunt wild animals in Africa. Lee said she had an investment opportunity that would allow her to do so, according to court records.
She asked him to download a cryptocurrency app that, at first glance, appeared to be the legitimate app from crypto.com. The app displayed the name Indoda-x, a name similar to the real Indonesia-based company Indodax.
A person claiming to be the app’s service manager told him to deposit cash to a courier who would upload it to a cryptocurrency account. The man made his first transaction on Sept. 27, handing $100,000 to a courier in the parking lot of a Lowe’s hardware store in Mount Vernon, according to court filings.
This happened three more times, with the man losing up to $400,000 on each trade through December 7.
On December 8, he checked his account on the fraudster’s app and saw his investment climb to $15.1 million.
The man attempted to withdraw the money, but the department manager he spoke with kept giving excuses why he was not authorized to withdraw the money, according to court records. The service manager eventually told the man he could withdraw his money if he added another $2.4 million to the account.
The man realized he was being scammed and reported it to the Holmes County Sheriff’s Office.
The FBI began investigating and asked the man to arrange a $1.5 million deposit. The officers watched as Lin walked up to the man in the Lowe’s parking lot and took the bag of money.
Officers arrested Kai, who told them he didn’t know who he worked for and that he made about $2,000 for each van he did.
He told officers someone would send him an iPhone and two SIM cards, along with instructions on how to collect money. Kai said he was instructed to destroy the SIM card after recovery and replace it with a new one.
He was then expected to drive for 30 minutes to an hour, before calling someone else to arrange for the money to be collected.
Adam Ferrise covers the federal courts of cleveland.com and The Ordinary Merchant. You can find his work here.