Bitcoin scam sees man lose nearly half a million dollars, calling banks and
The brother of a man scammed out of more than $400,000 has issued a warning to people to be more aware of bogus bitcoin traders.
Key points:
- Mr Barraclough lost nearly half a million dollars when he signed up to a scam without understanding what he was doing
- Westpac initially put a hold in his account used to make the transactions, then lifted it allowing the payments to proceed
- Kevin’s brother Allan is fighting the bank for a more just compensation and wants the case to act as a warning to others
Kevin Barraclough, 67, inherited a small fortune when his mother died and thought he would invest it to give the profits back to the community groups he supported.
“I wanted to scoop the money off [the top] and give it to the poor,” he said.
“It was about investing to help other people.”
While scrolling through Facebook late one night Mr Barraclough said he stumbled across a site offering him the chance to make millions of dollars on bitcoin.
He said he typed in his name and phone number “out of curiosity”.
Within half an hour he got a phone call from overseas from a man saying he wanted to do business, and it would only cost him $250.
Mr Barraclough said he foolishly handed over his email address and bank account details to a person he did not know.
“They seemed very convincing, they seemed very personal, very caring,” he said.
An initial $250 transaction was made on February 13 last year, but when Mr Barraclough tried a week later to access his Visa Westpac account it was blocked.
He was called into his local branch in southern Sydney and was told two suspicious transactions of $1,490.39 each were attempted.
Hundreds of thousands gone
Mr Barraclough discussed the transactions with a bank representative who told him the bank believed the transactions were genuine.
The block on his account was removed which gave Mr Barraclough the green light to make dozens
The next transaction on March 2 was for $7,773.62.
Between April 3 and May 15, Mr Barraclough made a total of 43 transactions for bitcoin via companies with names including Veritex.io, Bluesnow.ou, Simplex-Elastum and Simplex-Bitstamp.
He lost almost all the money, totalling $451,397.41.
According to his brother Alan, Mr Barraclough is a vulnerable, single man living alone who lacks the capacity to assess misinformation and is easily taken advantage of.
He has no expertise in bitcoin trading.
Allan wants to know why his brother did not get a stronger warning from the bank and why more thorough checks were not carried out.
A simple Google search reveals Veritex is based in Estonia and is commonly suspected to be linked to internet scams.
The same applies for Bluesnow, Simplex-Elastum and Simplex-Bitstamp.
Confidentiality is key
Due to confidentiality, the bank refused to discuss any details of Mr Barraclough’s situation but did release a statement in response to an ABC enquiry.
“Westpac invests heavily in scam prevention and has robust processes in place to alert and protect customers,” it said.
Allan has become his brother’s financial guardian.
He said he was furious when he found out what Kevin had done.
But it was already too late.
Allan says he does not accept the bank’s explanation that it was transferring Mr…
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