AI Deepfakes Escalate Investment Scam Risks

Hey guys, Dan Roth over here with Courtney Wernig, who's a principal at Meyer Wilson Wernig. They're a law firm that kind of specializes in all kinds of stuff related to cybersecurity and scams in particular. Courtney, how you doing?

Welcome to the show. I'm doing great. Thanks for having me.

Scams have been with us since, I think, the first day the internet ever got turned on, but it seems like things are getting a little worse in the age of AI. The scams are getting more sophisticated. There's a lot of deep fakes now, and it's getting hard to distinguish who's real and who's not real.

What's your sense of how bad is all this getting, and how bad might it get? I think it's fair to say it's a global crisis. We saw the 2025 numbers come out from the FBI report earlier this year, and the growth year over year is staggering in terms of what's being reported for cybercrimes, reaching $22 billion a year.

But again, we have to think that that number is wildly under-reported because there's so many victims of cybercrimes that don't come forward and report it anywhere. So the true numbers are probably likely much higher than that. And we have seen with such a growth of AI technology and what it's capable of doing, that's really just making it quicker, faster, easier, all of the things in terms of helping these criminals steal money.

Are there types of scams that are more prevalent than others that people are falling for, or is it just all across the board? We're seeing a tremendous growth in what we would call the pig butchering schemes, which is a really horrific name for sort of a long confidence scam. So a direct message comes in from some sort of social media platform, then a relationship develops, whether it's just a friendly relationship or a romantic relationship, and weeks are spent building up that trust.

And the reason that AI is so helpful in that is because it makes these conversations really tailored, really believable, no typos. You really think you're dealing with an actual person. I've even seen video chats that are very persuasive.

And so it's over those few weeks that the soon-to-be victim, the targeted victim really, is becoming confident in this person, and casually, they'll drop something about an investment opportunity, make it seem like they themselves, the scammer themselves, are very successful, and they'll show them platforms that look and feel very much like the real thing. " And then we see sort of these long confidence scams just really, really working in terms of starting off small, and then they see, wow, I've made money. They're looking at a platform that they think is their account.

And then they'll invest more money, and then they'll be asked to invest more money. And then at some point, there becomes a negative event where they want to get their money out and they have to pay fees to do it, or they're under investigation for insider trading, and they have to pay a fee to be exonerated. And by then, the scam has reached its sort of pivotal point where they can't get their money out.

That's usually when people realize they've been scammed. But we're talking weeks, sometimes months-long conversations to build up that type of trust, which we find is really, really working with our senior population, who I think just has a harder time understanding the scope of what tech and AI can do these days. And they really do have this belief that they're talking to a real person, and this person is trustworthy.

And so that's the type of scam that I see day in, day out, this pig butchering sort of targeted against seniors who have a big nest egg to lose. That's really what we've been seeing. To your point, the long con has been around, well, I don't know, forever.

There was even back in the day, a Paul Newman, Robert Redford movie talking about long cons, essentially. But have the cyber criminals become more patient? Because it seemed like for a while there in the age of the internet, one of the tells was there was always this sense of immediate urgency that I needed to go do something.

But in talking to you, it sounds like now they're willing to hang in there for weeks at a time before they finally strike. Yeah. And I think it's because it's become more industrialized.

For the first time ever, what used to be sort of a cottage industry with typos and problems is now an assembly line where you can have less people churning out more contacts. So you can spend the time to do it. All they need is a computer.

They don't really need more people. And so you're casting a much wider net. And I think that the criminal playbook is finding that it really works, that people are less likely to trust somebody who introduces an investment opportunity on day one or two than they are in the fourth month they've been talking.

So the fact that it works and the fact that it's cheap and easy to do these days, I think is why we're seeing more of it. What is law enforcement doing about any of this stuff? And is it possible to actually maybe reclaim some of these funds somewhere, or are they just always generally lost?

Yeah. So the good things about cryptocurrency and these types of cybersecurity scams from the point of a criminal is that it's Very fast and essentially irreversible, right? That's how the digital asset industry was built.

Hey, we want things to be very fast and irreversible, which creates a scammer's paradise. So once the funds are gone, and they move through some of these mixers, and they go through 2,000 wallets, and they get to where they're going to be in Southeast Asia or whatnot, it's almost like there's not a whole lot that law enforcement can do. They're really starting off with a handicap in terms of going out and getting any of this money, which is why I think it's become so prevalent as digital assets hit mainstream America.

So, we've seen instances, I think we've all seen instances online of the FBI being able to raid a particular wallet or whatnot. But what I tell people when I get calls about this is that it's very unlikely that law enforcement is going to be able to do anything to recover your $100,000 or $200,000, whatever it may be. Still worth reporting to law enforcement because the more people that report for the same type of scam or the same type of wallet, would generate more ability and interest in terms of law enforcement getting involved to take down that particular enterprise.

So it's still important that we report, but unfortunately, unless a miracle happens, it's not likely that they're going to be able to get that money back. In terms of what people can do next, I would caution people against what looks like crypto recovery services, because we see a lot of sort of secondary scams that happen after people have been scammed, probably from the same people. I have no evidence that they are the same people, but certainly they get targeted a second time on a different social media platform saying, "Hey, I lost my money too.

I got it back through XYZ recovery service. " What I tell people is that, don't throw good money after bad money. Hiring these services is oftentimes the next step in the scam.

In fact, the FBI identified that as a new sort of line item in their report for 2025, that these recovery scams are generating many billions of dollars of losses as well. So at least for my part, when I represent clients who were pursuing investment losses as a result of these scams, we do it on a contingency fee basis. So they're not paying more money out of their pocket to try to recover these funds.

And that's what I would recommend that people sort of stick with so that they're not scammed again into providing more money into the scam. We've had people on WhatsApp, impersonating my law firm saying, because we're out there as we represent victims of investment scams, and we do. " Well, we never do that.

We never ask for people's money. So as soon as something like that happens, then you know it's a second scam. Every now and again, you see a report about how law enforcement worked with, I don't know, Interpol or whoever it might be, to break up one of these rings.

But it seems like to your point about the... It doesn't take them very long to spin it back up again, or somebody else just emerges next, and we wind up playing a bad game of Whac-A-Mole. I was just going to say, it's exactly like Whac-A-Mole.

You whack them down here, and they pop up there. And it's kind of what we've done to ourselves in this market and this industry of digital assets. Very little control over what happens overseas, and with how inexpensive and fast it is, it's just like anybody can open up whatever mixer they want and decentralize exchange, and there's nothing we can do about it.

We can whack one down, and the next one pops up. So, what I typically tell people is that protect yourself, protect your family. Work with your own financial institutions to make sure that they understand your circumstances.

Most of what we do is holding the financial institutions who let the money go responsible. For instance, if 93-year-old widow, under a government impersonation scam, goes to her longtime financial advisor and says, "I need money for XYZ," and it's some crazy reason, there are a whole host of obligations and responsibilities that the brokerage firm has to ask to potentially notify their fraud department to get the right protective services involved before that money leaves. Because they know once the money leaves, it's gone forever.

So, talking to your family, becoming a trusted contact on your parents' investment accounts, getting copies of their statements to make sure you're not seeing any kind of crazy withdrawals. In terms of the deep fake where we see granddaughter calls grandma, and it's an AI-generated voice file saying that she's in trouble and needs money. Well, the simple tool against that is actually embarrassingly non-techy.

It's just have a safe word, right? Establish some sort of, if you need money and it's real, there's got to be a safe word involved. So, those are just a couple of things that we can do to protect ourselves, because at this point, I think the scammers and the criminals are so sophisticated that it is like Whac-A-Mole, and there's not a whole lot that law enforcement can do or has been able to do to protect the investing public.

And so it's kind of been up to us. And these scams are as old as time. " It's not like the motion itself is all that different.

Yeah. Investment scams have been around since the beginning of time, and AI certainly didn't invent them, but like I said, it's industrialized them to a level that has reached essentially all of the living rooms of the senior citizens in our country. So it's just the scope, I think, is what's making it such a big problem.

Should we be concerned that as this continues, that the whole social fabric that kind of makes the web and the internet work will break down because people will just stop engaging or trusting each other, and there's more at stake here than just loss of funds. It seems like the very fabric of the thing that we built and society now revolves around is breaking down. Could be.

And from a philosophical standpoint, I think we see some of that already, that there's sort of a deep-seated mistrust of what goes on the internet. I actually hope that that continues to a level that people stop engaging in this way. But you're right, it could potentially break down how we treat other people, how we view the world, how we view ourselves.

And so yeah, I think it does have pretty far-reaching implications, especially for the people who have engaged in these scams. The level of shame and vulnerability that these people feel, like I talk to people who may never trust another person ever again. It has completely destroyed their lives, results in suicide or suicidal ideation, or just really horrible mental abuse and manipulation.

And the financial losses are really significant and important, but the mental toll and the psychological toll it takes on people is something we don't talk about a lot, but it's still very real. Should we get to the point, therefore, where we just assume that everything is false until proven otherwise, and we need some way to kind of validate those interactions? " That's true.

I have a very firm trust but verify, verify always policy, and I tell people that if anybody reaches out to you on the internet, whether it's somebody you think you know or not, it's not them. Because I do this for a living. I live in the world of skepticism.

But because almost all of these scams result from some sort of unsolicited message, I tell people that any message they get is a scam, and that's how we should live our lives. Which is kind of sad, but the reality that we're living in. So what is your best advice to corporations about their role in all of this?

A lot of times they get caught up in the middle of this thing. Either somebody's impersonating them or they're involved in the fund transfer, but are there things that they should be doing? Yeah.

So we take on Wall Street all day, every day to try to hold them responsible for their failures with respect to their customer accounts. So my advice to them, and they've been talking to me through their lawyers for a long time now, is that the frontline workers, the employees that deal face-to-face with these customers, need to be appropriately trained to identify, detect, and escalate to prevent this type of investment scam. So it's going to be the people at the banks, it's going to be the people at the brokerage firms, the financial advisors that have the multi-year relationship with these people who are going to stop this fraud.

Because unless they say yes, the victims can't get their money. And it's met with an air sometimes of, "Well, if Mr. Smith asks for his money, I have to give Mr.

" No, you don't. There are plenty of regulatory obligations, specific FINRA rules that you have to comply with if you have a reasonable suspicion that somebody has been scammed. " That is not how the system is supposed to work, because people who are being scammed don't know that they're being scammed.

And they're typically coached by the scammers to do something a certain way, to say something a certain way. And so these fraud departments, especially at sophisticated institutions, are training their people to say, "You can't take their word for it. You have to ask probing questions.

" And they make them sit through these case studies, and these case studies look and feel very much like the cases that we bring all the time. So my encouragement to the corporations are to keep training and enforcing your frontline employees who deal with these people, especially these senior citizens, to detect and stop the financial scam when they start to see it. All right.

Folks, there's two things to remember. One is, if it's too good to be true, it probably isn't. And then secondarily, if you work for a company, do not be complicit because you will be held accountable by Courtney and her friends here.

That's right. Hey, Courtney, thanks for being on the show. Thanks for having me.

All right. And back to you guys in the studio.