How a Connecticut woman lost an estimated $1 million in crypto scam

Jacqueline Crenshaw thought she had met the perfect man for her on a dating website.

He was attentive, she said. There were songs and poems. He sent pizza to her house when she mentioned she was hungry. They prayed together. 

“This would have been, I would say, the best husband, boyfriend in the world,” said Crenshaw, of East Haven.

Eventually, almost a year into their relationship, the subject of investing in cryptocurrency came up. The two had never met in person, but she had gained his trust. The man sent Crenshaw a check for $100,000 and, with that, Crenshaw created an account on what she believed was a cryptocurrency trading website.

“This other guy with an English accent who was supposedly a broker, showed me how to open this account and where my money was and how much money I was going to make from crypto,” she said.

She took money out of her own retirement accounts to invest. As her 60th birthday approached, the pair planned a birthday party on a yacht.

By the time her birthday rolled around, Crenshaw’s love interest, and her money, had disappeared.

“I got an anonymous call from someone with a thick accent saying you were being scammed,” she said. “Of course, my world just fell from underneath me.”

The $100,000 check she’d received turned out to have come from another woman, also an alleged victim.

In total, between the money she put in the cryptocurrency investment account and what she had to pay out of pocket for the birthday party, Crenshaw said believes she lost close to $1 million. She reported the alleged scam to East Haven Police in September 2023, telling them about someone she thought was a Florida man, their relationship and the details of the scam, according to a police incident report. That investigation was referred to state police and the investigation is ongoing.

A manager at a local hospital’s radiology department, Crenshaw said her money had been withdrawn against her 401k and other retirement accounts. She’d scrimped and saved for years, but it’s all gone now.

“My credit is ruined,” Crenshaw said. “I’m now in foreclosure, and I can’t even file for bankruptcy.”

Crenshaw is believed to be the victim of what is referred to as a “pig butchering scam,” in which a victim is “fattened up” over a long period of time. 

“They’re making them feel really comfortable and like they should make these investments,” said state Rep. Jaime Foster, D-East Windsor. “The next thing that they do is, in this fake app, they transfer their money in real cryptocurrency to the criminal. And in a fake app, they show that their money has tripled, quadrupled, significantly increased, and then when they go to withdraw their money, they find out that the app that showed them that their money increase was all fake.” 

The scam works like this: The scammer will reach out via text message, then get the victim to move to a more private platform, like WhatsApp. Slowly, over a long period of time, they begin to feel like a friend. 

The goal is to convince the victim to buy cryptocurrency through a dummy app. The victim thinks they’re making a sound investment, but soon find out that their money and their newfound friend are both long gone.

“They talk about ‘pig butchering,’” Crenshaw said. “I was slaughtered.”

Foster has proposed legislation that would, she said, make investigating cryptocurrency scams significantly easier. 

The problem, Foster explained, is that the law is woefully behind the times. 

“In our banking statutes, we have a definition of ‘cryptocurrency,’ but interestingly, in our penal code, we don’t,” she said. 

So, the first goal of her proposed bill, is to make sure “that the penal code recognizes crypto.”

Much of the time, the scammers are nowhere near Connecticut. Often, they are in Asia and, often, the cryptocurrency scams are tied to other crimes.

“In China, there’s actually reports of women who are computer science students, who are being kidnapped off of college campuses and forced to commit these crimes, and they’re being held hostage,” Foster said. “It’s very unusual to have a Connecticut situation where you can defund international criminal organizations.”

Foster’s bill would allow investigators and prosecutors to freeze an accused scammer’s assets, usually contained in something called an “e-wallet,” if they don’t show up at a hearing, and then put it in what Foster called “a victims restitution fund.”

Present Connecticut law does not allow for easy asset forfeiture in cases like these, even when investigators find a victim’s money.

“What’s happening in these situations is, they can find the money in an e-wallet that belongs to a criminal who’s not domiciled in Connecticut, and under our current asset forfeiture laws, they cannot take that money without due process,” Foster said. 

If Foster’s bill passes and a victim’s restitution fund is created, it’s possible that investigators would “forfeit assets greater than what we need for victims compensation,” Foster said, in which case the extra funds would be used to help investigators fight cyber crime. 

“Sometimes things like this can fund themselves,” she said.

There are only two state police investigators currently working on cryptocurrency crimes, and it’s only a part of their jobs. Det. Matt Hogan is primarily a major crime detective for the eastern district. His partner in crime prevention is assigned to the organized crime unit. 

Hogan said that’s pretty standard. In fact, if you don’t count the larger states, like New York and California, Connecticut is “probably ahead of the curve,” he said.

“I wouldn’t call this a side hustle, but we do this when we have as much time as we do, you know, which is not much,” he said.

Last year, their cryptocurrency crime caseload was “well above 100,” Hogan said. Since they started, about three-and-a-half years ago, they’ve recovered over $4.4 million in victim assets.

Hogan and his partner were friends at the academy and shared an interest in financial crimes, so they educated themselves on cryptocurrency and blockchain analytics.

“We had a couple troopers come in with complaints here and there. We searched our in-house reporting system, we looked at a couple cases involving it, and we started talking to other local agencies about the country, and they were all seeing the same thing,” Hogan said. “So, we were like, ‘You know what? We’re gonna do this ourselves.’” 

Grants followed, enabling outside training and some technology and, soon, cryptocurrency crime became a not-insignificant portion of their jobs. “It just kind of fell in our lap,” he said. 

It will probably soon take up more of their time. The Connecticut penal code does not have a “cryptocurrency crime” classification, but the official 2023 annual report on crime in Connecticut showed that fraud offenses nearly doubled in two years, with fraud offenses occurring in cyberspace increasing by 47 percent between 2022 and 2023, and increasing by 136.7 percent between 2021 and 2023. 

Hogan said he’s seen the number of cryptocurrency scams increase considerably. 

“The environment is so new that there’s just no way for someone that hasn’t been in this game for a couple years already to get up to speed quick enough,” he said.

To add to the problem, because many victims withdraw their money from retirement investment accounts, they then have to pay taxes on the money they were scammed out of. 

“I have constituents who are devastated on so many levels that this is what happened to them,” Foster said. “This one gentleman, for example, he had money set aside for his kids. He thought he was going to be the first generation of his family to leave his kids an inheritance when he passed away, and he’s in debt, because the amount he owes on taxes has offset what he had originally set aside.”

If you give someone $1 in cash, the money is guaranteed by the government. If you transfer $1 from one bank account to another, it’s the bank that is transferring the value.

With cryptocurrency, Bina Ramamurthy explained, the value transfer is peer-to-peer, using the underlying hardware and software protocols without the involvement of any government or outside organizations. 

“Cryptocurrency is peer-to-peer value transfer that is possible as long as you have an internet connection and wallet,” said Ramamurthy, director of the Blockchain ThinkLab at the University of Buffalo. “They’re not connected to your credit card or your bank. You hold the value in your e-wallet.”

That decentralization is what makes cryptocurrency so attractive to scammers. The e-wallet internet address is anonymous, just a series of numbers.

“That’s the reason why it is so easy for scammers, all these people, to send huge amounts of money and hide behind it,” Ramamurthy said.

But, likewise, because it’s not connected to a government or institution, investigators can follow the chain of deposits even if they don’t know who is behind them. The data is all traceable, like tracks in snow, but permanent. 

“You can track patterns,” Ramamurthy said. “You can track where it went, how was this money transferred, how much money was transferred, or you could query the blockchain, what are the big transfers that happened today?”

After she reported the scam to East Haven police, Crenshaw got an unexpected visit from a social worker, making sure she was OK. 

“I know people that have killed themselves for less,” she said.

Crenshaw has joined a support group for victims like her, and has reached out for help to the AARP, local and state police and the office of U.S. Sen. Richard Blumenthal, D-Conn. 

It’s more than a year later and she’s still writing letters to the IRS, still attempting to get her finances in order. She’s trying as best she can, she said, not only to build her life back but to help others who have also become victims, to recover. Whether she will ever see any of that money, however, is unclear. The case remains under investigation by state police.

“I love life,” she said.” I worked my whole life, traveled, did all these things, but, of course, that’s come to a halt. I just feel like I’m not going to let this break my soul. It almost did, but that’s where my fight comes in.”