Cryptocurrency trial put spotlight on internet schemes, U.S. attorney says

Ian Freeman

Ian Freeman outside U.S. District Court in Concord the day before he was convicted on money laundering charges. (Photo by Rick Green)

The Dec. 22 federal conviction of Keene resident Ian Freeman for his role in a money laundering scam strikes a blow against a growing problem, said Jane Young, the U.S. Attorney for New Hampshire.

“The culture of scamming through the Internet has become a pervasive societal problem,” Young said in a written statement. “These scammers get away with their crimes, which often victimize some of our most vulnerable citizens, by hiding their tracks, including the money trail.”

Prosecutors said Freeman laundered proceeds of fraudulent internet transactions by exchanging U.S. dollars for bitcoin, a type of digital currency backed by computer code rather than a central banking authority.

“Money launderers such as Ian Freeman are the ones who help hide the money for these scammers,” Young said.

Jurors found Freeman guilty of all the criminal charges he faced: operating an unlicensed money-transmitting business, money laundering and tax evasion, as well as conspiracy charges in connection with the money-laundering and unlicensed money-transmitting allegations. A sentencing hearing is set for April 14.

“Today’s swift verdict sends a strong message that this type of money laundering will not be tolerated,” Young said. “Stopping scammers by disrupting their methods for hiding their tracks is an important federal objective. This prosecution is an important step in meeting that objective.”

The trial included witnesses who said they fell victim to so-called “romance scams” in which someone on the Internet feigned interest in them and persuaded them to send money.

“As a member of this criminal conspiracy, Mr. Freeman took advantage of the emotions and bank accounts of unwitting victims to line his own pockets,” Joseph R. Bonavolonta, special agent in charge of the FBI Boston Division, said in a written statement.

For his part, Freeman testified he never knowingly aided a scammer, and tried to protect people from scams when he was suspicious.

In a news release in February, the state attorney general’s office said “romance scammers often troll online dating and social media websites using fake personas.”

“These scammers often target single individuals, including those recently divorced or widowed,” the office said. “They ingratiate themselves with the victim by claiming to share common interests or circumstances. The scammers get this information through a victim’s public social media accounts as well as other online resources such as obituaries.”

The AG’s office said those running romance scams typically:

  • Provide too much personal information quickly.
  • Hastily lure victims off a dating website or social media to communicate through other means, like text or email.
  • Use poor spelling and grammar.
  • Make excuses why you cannot meet in person.
  • Say they’re living or traveling outside the U.S.
  • Claim to be stranded overseas and need money to get back home.
  • Seek gift cards, cell phones or cryptocurrency.
  • Claim to need money to access to millions of dollars in funds.

A man who testified at Freeman’s trial said he lost thousands of dollars because he believed someone who persuaded him to move around his money, telling him his Social Security Account had been compromised.

This is another frequent internet scam, the AG’s office said:

“They ask to confirm the victim’s Social Security number, or they may say they need to withdraw money from the victim’s bank and to store it on gift cards or in other unusual ways for ‘safekeeping.’ Victims may be told their accounts will be seized or frozen if they fail to act quickly.”

Another common scam involves people who claim to be technicians who will fix your personal computer and seek payment for services that aren’t needed.

There are also “grandparent scams,” in which a fraudster contacts an older adult and poses as either a family member or someone calling on behalf of a family member. Call recipients are told that their family member is in jeopardy and urgently needs money.

On Dec. 9, Elvis Guzman, 45, of Albany, N.Y., was sentenced to at least five years in NH State Prison for his role in perpetrating “grandparent” scams in 2020, including one that defrauded a Keene man.

According to the FBI’s Internet Crime Report 2021, a record 847,376 complaints of cyber-crime were reported to the FBI by the public, a 7 percent increase from 2020.

The U.S. Justice Department maintains a National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311), for those age 60 or over to report suspected fraud.

Also, the NH Bureau of Elderly and Adult Services maintains a hotline, at 1-800-949-0470, for anyone with knowledge that a vulnerable adult has been scammed or financially exploited.

Fraud can also be reported on the Federal Trade Commission website: reportfraud.ftc.gov. The NH Attorney General’s office also provides a toll-free consumer protection hotline, 1-888-468-4454.

This article is being shared by partners in the Granite State News Collaborative. For more information visit collaborativenh.org.