Investment Scam: Carol & Ralph’s Story
A retiree loses $4 million on a fake investment scheme recommended by a new friend he met on social media.
This story is part of Operation Shamrock’s Survivor Stories series.
“When Dad started talking, the alarm bells started ringing.”
Friday, March 7, 2025 is a date Carol won’t ever forget. That’s the day she caught on to what was happening with her father, Ralph.
Almost exactly a month earlier, she’d read The Economist’s exposé on international scammers. As she listened to Ralph ask family members to borrow hundreds of thousands of dollars that Friday, Carol’s heart dropped. Her mind raced back to that article.
“When Dad started talking, the alarm bells started ringing,” Carol told the Operation Shamrock team.
A New Online Friendship
Six months earlier, Carol’s father had taken an overseas trip and posted a picture from the holiday on social media. Among the likes and comments on the photo was one from Alice Xiao, who said, “I love this photo.”
That seemingly innocuous comment from a stranger led to an online relationship. In the months that followed, Alice generated over 800 pages of text messages with Ralph. She was prolific.
After a few months of this text-based relationship, the hook was set. In November, Alice mentioned she knew of a great investment platform her uncle, a famous trader in New York City, used. Through her uncle, she had the inside track on how to trade commodities successfully.
Alice offered to let Ralph do a simulated trial investment on her platform. That was quickly followed by an investment of Ralph’s real money. He made a little bit of money on that initial investment and was able to withdraw money from the platform. It seemed like a good deal.
Millions Are Lost
In late January, as Ralph made more money on this trading platform, he naturally invested more. He liquidated his entire Traditional IRA account in a single transaction, moving $1.6 million from his account and investing it in Alice’s platform via cryptocurrency.
The website showed that his $1.6 million investment quickly grew to $3 million. But at some point, the scammers told Ralph that his account was locked due to illegal activity. It would take more money to clear things up, access his funds, and keep investing. Ralph said he’d already put in every liquid dollar he could. There was no more money.
The Scammers Go Even Deeper
A lack of liquid capital wasn’t about to stop Alice and her team of scammers. She suggested Ralph take out a Home Equity Line of Credit (HELOC). He did, putting another $220,000 into the fraudulent trading platform.
According to Alice, Ralph needed to put in more money to withdraw his funds. She suggested a second mortgage broker. Ralph signed off on a commercial loan with a 12% interest rate and an end-of-year balloon payment. He was approved for $800,000 within five days. All that money went immediately into the trading platform.
“It was just relentless. They just come up with multiple ways to overcome barriers. They don’t give breathing space to stop and reflect,” noted Carol.
By the time Carol and her family caught on, her Dad had put more than $4 million into the investment scam. He went from a secure retirement and paid-off home to empty IRAs and multiple mortgages.
“It was just relentless... They don’t give breathing space to stop and reflect.”
The System Failed
In a span of less than six months, Ralph transferred a lifetime of accumulated wealth into an investment scam. He was approved for multiple loans, he sold stocks, and he emptied retirement accounts. As the money moved into his bank account, it immediately flowed out in the form of wire transfers to buy crypto.
Banks and financial institutions have a fine line to straddle in situations like this. The money they hold doesn’t belong to them. In this case, it belonged to Ralph. And Ralph had the right to spend his money as he saw fit. But there were red flags: Most retirees don’t transfer millions of dollars from retirement accounts to checking accounts to crypto accounts in a matter of a few months. Surely these financial institutions are capable of monitoring to throw up some safety checks.
Ralph and Carol’s story is particularly haunting, but it’s far from uncommon. Operation Shamrock’s mission is to educate the public, mobilize collective action, and disrupt the operations networks of transnational organized criminals to prevent further harm.
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