Lawsuit says Bitcoin Depot, Circle K knowingly facilitated swindle of elderly
March 21, 2024
HAMPTON, S.C. – Parker Law Group has filed a lawsuit in Richland County Court of Common Pleas alleging that Bitcoin Depot, an operator of “Bitcoin ATMs,” and Circle K Stores are knowingly providing the technological means for criminals to swindle life savings from vulnerable people, especially the elderly.
Elderly financial scams are a major issue, resulting in billions of dollars lost to victims each year. They have only grown worse in recent years, as technology has created new opportunities for scammers to defraud their victims. Many of these scams involve cryptocurrency, and Bitcoin is involved in about seven out of 10 of those. The FTC reported that between January 2021 and June 2022, more than 46,000 people reported they had been victims of cryptocurrency scams, amounting to losses of more than $1 billion.
One common scam involves a scammer impersonating the victim’s bank, a government agency, law enforcement, a relative, or other trusted party. The scammer convinces the victim of a scenario that requires urgent action – saying that the victim’s bank account has been hacked, or that the victim owes the government money; accusing the victim of a crime; or claiming to be a relative in need of cash to handle an emergency. The scammer tells the victim that to fix the problem, the victim must deposit cash into a “Bitcoin ATM,” and provides directions to the ATM. The scammer tells the victim that the funds will be deposited into a “Bitcoin wallet” assigned to the victim, for safekeeping. However, the Bitcoin is actually routed to an untraceable Bitcoin wallet owned by the scammer.
The suit was filed on behalf of a recently widowed 73-year-old South Carolina woman who lost $30,000 to a Bitcoin scam. Scammers, impersonating her bank and the Federal Trade Commission, convinced the victim that her savings account had been hacked, that the account was being investigated by the FTC, and that to protect her money she must remove it from the bank and deposit it into a bitcoin wallet the bank had created for her. The scammers instructed the victim, step by step via her cell phone, to withdraw the money in cash and then deposit it into a Bitcoin ATM at a nearby Circle K store. The scammers warned the woman that employees of the local bank branch may be involved in the hack, and so not to disclose to them why she was withdrawing her money. Terrified, she complied.
According to the lawsuit, Bitcoin Depot and Circle K bear responsibility for the scams, for knowingly facilitating and profiting from the scams without taking meaningful steps to prevent them. According to SEC filings, Bitcoin Depot had admitted it knows its Bitcoin ATMs are used “to facilitate illegal activities such as fraud, money laundering, gambling, tax evasion, and scams.” The company claims it takes steps to prevent the scams, but the scams are still happening.
The lawsuit also asserts that convenience store operator Circle K bears equal responsibility for the thefts because it has entered into an “exclusive partnership” with Bitcoin Depot to house Bitcoin ATMs in more than 2,000 stores across the United States and Canada. According to the lawsuit, Circle K also knows of the scams but has not taken sufficient steps to prevent them.
The lawsuit says the two companies knowingly derive significant income from the scams by selling the Bitcoin involved at a substantial mark-up, sometimes as high as 30 percent more than Bitcoin’s actual market value. This exorbitant profit, the lawsuit alleges, is the reason the defendants have not taken meaningful action to intervene in the criminal use of the machines.
“Public records show that hundreds, if not thousands, of South Carolinians are victims of these schemes,” said Derek Tarver, an attorney with the Parker Law Group. “It’s unacceptable that these companies know this technology facilitates these crimes, and they knowingly derive a profit from it, and take no meaningful steps to prevent it.”
“This is far from an isolated case,” Tarver noted. “Public records and online complaints show a pattern of similar scams across the country.”
Attorneys in the case expect it to be broadened into a class action suit as more victims are identified. Tarver urges those approached by such scammers to immediately contact law enforcement officials for help and advice.
About Parker Law Group
Parker Law Group, LLP, is a progressive law firm dedicated to helping clients in communities across South Carolina. Its attorneys practice in a wide range of areas, including personal injury, abuse and neglect of special needs children, car accidents, defamation, defective products and vehicles, insurance litigation, medical malpractice, sexual assault and harassment, workers’ compensation, and many others. The firm maintains a workplace culture that fosters creativity, teamwork, inclusion and philanthropy. Learn more at https://parkerlawgroupsc.com/.
