STERLING HEIGHTS, Mich. (WXYZ) — Sterling Heights has become ground zero for cryptocurrency fraud in metro Detroit, with police reporting nearly two dozen cases totaling more than $500,000 in losses since January.
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The city leads Macomb and Oakland counties with 27 cryptocurrency machines — the most of any community in the region. But Sterling Heights Police say fraud connected to those machines has increased significantly this year.
"I believe we had a lady in her 70s who was scammed in a romance type scam, she met someone online the person started asking for money they were in need of money," said Chief Andy Satterfield of Sterling Heights Police.
The woman lost more than $70,000 to the scammer.
"She would just send him money, I believe, over 70 thousand dollars worth," Satterfield said.
The chief described the loss as "horrible and not uncommon" in what Sterling Heights Police call predatory virtual currency scams.
From the Federal Trade Commission: What To Know About Cryptocurrency and Scams
Sterling Heights Police Captain Colleen Hopper is part of the department's crypto task force, formed in September to combat the 23 fraud cases. She says the scams begin with an unsolicited message or call designed to create pressure.
The victim — typically an elderly person — is told to deposit cash into a cryptocurrency ATM.
"Once that money is submitted, it is gone," Hopper said.
Last week, Hopper helped introduce an ordinance in front of city council that would add new licensing and operational regulations for cryptocurrency machines.
"To see the level of scams and theft tied to them in our community, these are long overdue, and I'm happy to support this," said Sterling Heights Councilman Michael Radtke.
The ordinance, which will be voted on next week, would require a photo ID for transactions, display fraud warnings, maintain a customer service hotline, and create a first-time user transaction limit of $1,000.
Satterfield advises residents to be cautious before sending money to unknown individuals.
"If you feel like you may be a victim, call local police before you send a lot of money to someone you may not know, consult with someone, make sure this is legitimate business," Satterfield said.
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