For nearly three months, Barry Heitin, a 76-year-old retired lawyer, thought he was part of a government investigation that seemed like something out of a movie. In fact, he was helping criminals steal hundreds of thousands of dollars – his own money.
Last fall, he spent virtually every weekday doing the legwork and making withdrawals from his bank accounts as part of a complex scam, believing he was helping the government protect his money and catch thieves who were after it.
“They kept telling me, 'This is a big case and we're going to stop a whole ring of people,'” Heitin said. “It was like a rabbit hole. I went down the hole with them.”
It cost him almost all of his retirement savings: about $740,000.
Americans invest a lot of energy in saving for retirement and fear losing money due to the volatility of the stock market. But today, sophisticated criminals – on dating sites, social media, messaging apps, or through malware – pose an ever greater risk to people and their savings.
The nature of these schemes makes it almost impossible to get the money back, leaving victims with little recourse. The stolen funds are often transferred to foreign accounts or laundered through cryptocurrency wallets that are quickly emptied.
Mr. Heitin was one of many people interviewed by The New York Times who were involved in scams that could be so sophisticated that they seemed to have been conceived in a writers' room where different plot elements were being tried out. Fraudsters can pose as government officials, technical support representatives or mistresses. They train victims on how to circumvent fraud prevention measures at financial institutions, and they use manipulative psychological tactics – isolation, a sense of urgency or exploiting people's willingness to trust or form a bond – to keep the scam going.
“The crime doesn't end until they take all your money,” said Erin West, a prosecutor with the district attorney's office in Santa Clara, Calif., who heads a cybercrime task force. “It will affect every victim the same way until they lose everything they have, whether it's $5,000, $50,000 or $15 million.”
To make matters worse, they may even face a hefty tax bill after they deplete their retirement accounts.
According to the FBI's Internet Crime Complaint Center, potential losses from cybercrime exceeded $12.5 billion in 2023, a 22 percent increase from 2022 and more than triple the 2019 level. However, these figures underestimate the problem because many victims do not report their losses.
People over 60, who are often targeted by cybercriminals because they supposedly have the largest savings, suffered the highest losses of all age groups in 2023, with more than $3.4 billion, according to the FBI
Involved in a false investigation
For Mr. Heitin, it started in September when he couldn't log into his 401(k) retirement account. When he tried again a few days later, he was able to log in, but the screen quickly changed and told him to call the 401(k) provider's fraud department. He called the number on the screen that had the company logo on it.
He then contacted a man who called himself Charles Hunt and said he was a fraud investigator for the company. (Mr. Heitin and his lawyer said they did not want to name the institutions because they were in talks about a possible refund.)
Mr Hunt informed Mr Heitin that someone had tried to gain access to his account.
He then named a large bank where Mr. Heitin had an IRA account, as well as checking and savings accounts. That money, he was told, was also at risk. Mr. Hunt then connected him with a man who called himself Hayden Smith and said he was at the bank where Mr. Heitin had his checking account.
Mr Smith said he had identified two transactions valued at $10,000 for the purchase of child sexual abuse images through a website in China. He bombarded Mr Heitin with questions. “Have you ever been to China? Do you know anyone in China? Do you buy anything in China?”
He had not. Next, Mr. Heitin was told that financial institutions often worked with the federal government in these cases. Would he be willing to talk to them?
Then a third man, who identified himself as Finn Whitrock, answered the phone and said he was from the Internal Revenue Service. He gave his service number and said that Heitin's other accounts were at risk, but that the government could protect his money by putting it in a federal safe deposit box.
If he was willing to cooperate with the investigation, Whitrock explained, Heitin could play a crucial role in stopping a crime ring from exploiting others – while also ensuring it didn't lose the $20,000 the thieves were trying to steal. But they had to act quickly.
“Let's do it,” Mr. Heitin said he told them. “Then I gave them access to my computer and they initiated a series of withdrawals from my bank accounts.”
He began withdrawing his retirement and other savings and transferring them to what he thought was a safe place, mostly using bitcoins, ATMs, and electronic transfers to other accounts.
Mr Heitin, who lives alone, was instructed not to tell anyone, including his three adult children.
The scammers kept a close eye on him. Mr. Smith accompanied him on all transactions, so they spoke daily. Mr. Hunt called him every morning and evening. They developed a friendly relationship and exchanged stories about cars and bad knees.
Throughout the ordeal, Heitin's computer was running 24 hours a day – the criminals had loaded an image of a world map onto his computer, with flashing lines sprouting in different directions. Hunt referred to this map and gave him regular updates on the fictitious thieves. Interpol had caught at least one of them. Another was tracked to Singapore.
Use up your pension
After withdrawing a total of $113,000 from his checking and savings accounts, Mr. Heitin was instructed to transfer his retirement money to accounts where he could more easily conduct transactions.
These transfers would prove more tricky: He had more than $830,000 in his IRA and brokerage accounts, and his advisor, with whom he had worked for over 20 years, would have questions.
But the fraudsters had an excuse ready. Mr. Heitin explained that he wanted to buy a property in Canada and presented the bank with a list. “It was a surprise for my children,” he was supposed to say.
His advisor didn't buy it. The bank called him and told him that the property had not been sold. There hadn't even been any inquiries.
At Smith's suggestion, Mr. Heitin said he needed the money to buy gold, and the bank asked him to step in.
Before he left, his superiors sowed doubts, leading Mr. Heitin to believe that his personal information might have been leaked through the branch. Mr. Whitrock – the man claiming to be from the IRS – rattled off a list of five names and asked if he recognized any of them.
Heitin knew the latter: it was his advisor. He had not been accused of anything yet, Whitrock said, but he was on a watch list.
“That put me on the defensive,” recalls Mr. Heitin.
At the bank, he pressured his advisor, the branch manager and a compliance officer to simply give him his money, but he went home empty-handed.
Mr Smith had another idea: transfer the IRA to another institution. It worked.
Mr. Heitin now had $834,000 in the new IRA account, which he emptied in less than two weeks, with no questions asked by the new provider, and transferred the money to bank accounts.
“This type of activity is a classic sign of potential money laundering activity and should have raised alarm bells,” said Robert Rabinowitz, Mr. Heitin's lawyer. who is trying to help Mr. Heitin get some of the money back.
Investment firms must “make reasonable efforts” to identify a trusted contact when opening or updating accounts – someone who can be notified if the firms have reason to believe a customer is being exploited. Firms are also permitted – but not required – to temporarily freeze transactions or withdrawals.
In Mr. Heitin's case, the institution that suspected something was wrong had no contact on file, but by the time it tried to locate one, he was already deeply involved in the fraud.
Once the money was easily accessible, Mr. Heitin set about getting it to safety.
On some days he commuted between two bank branches, He withdrew $5,000 from each one. When the banks asked questions, he was instructed to wire money to a gold dealer in New York who also wanted to warn him.
“I am worried about you,” Mr. Heitin recalled the dealer saying when the dealer told him about another customer who had been tricked into buying gold for a fraudster.
Mr. Heitin ultimately made three purchases – totaling approximately $416,000 – of gold bars and coins.
Within hours of each purchase, the gold was gone. With Mr. Smith in his ear, he waited for a car to pull up to his apartment building and placed the gold in a brown paper bag in the back seat.
“It felt very James Bond-like,” he said. “I wanted to get to an end point.”
The plot unravels
That moment came in late November, when he received a call from a New Jersey detective who had found his name and address on a receipt for gold in a car.
“I'm pretty sure you're a victim of a scam,” he recalled her saying. “I was almost disappointed or relieved,” he said. “I felt good and bad at the same time. It's hard to explain.”
He eventually met with two FBI agents at his daughter's home and later learned that he was among at least seven other victims involved in a plot based in India.
“My father had a very comfortable retirement ahead of him, but that is no longer the case,” said Liana Loewus, Mr Heitin's daughter. “The worst part about the consequences of such a fraud is that you feel like no one cares.”
Her father's ordeal is not over yet.
Withdrawals from tax-advantaged retirement accounts such as traditional IRAs are taxed as ordinary income, so to the state, it looks like Mr. Heitin lived large last year: He still owes nearly $285,000 in federal and state taxes.
Victims of personal injuries, disasters and theft used to be able to receive relief in the form of a tax deduction, but this was eliminated as part of the Republican-led tax reform in 2018.
A bill introduced this year would reinstate the deduction, and Mr. Heitin's lawyer said he plans to seek an individual tax ruling from the IRS.
Today, Heitin's infected laptop is hidden in his kitchen pantry. But he still thinks about his ordeal.
“Do I look back and say I probably should have done other things?” Mr. Heitin said. “Of course. But I have to get over it. If I don't, I'll be stuck in a horrible depressive loop. With the help of my family and the support of the people around me, I got through it.”