Houston is home to hundreds of Bitcoin ATMs found inside convenience stores, liquor stores, and shopping malls.

But 2 Investigates reporter Amy Davis uncovered a troubling trend: unsuspecting consumers are feeding hundreds of dollars into these machines—not to buy bitcoin, but because scammers are tricking them out of their money.

This is happening to people here in Houston and across the country every day.

In just 11 months last year, people lost more than $333 million to bitcoin ATM fraud nationwide.

How does Bitcoin ATM fraud even happen?

One Houston elementary school teacher, who asked to remain anonymous out of fear that the thieves already know too much about her, shared her experience.

She said that she received a call from someone claiming to be a U.S. marshal, telling her she had a bench warrant for missing a court date and needed to pay before being arrested.

The caller sent what appeared to be court documents and gave step-by-step instructions to clear the warrant.

“I was worried… definitely worried,” she said. “I’ve never been in any type of legal trouble.”

He directed her to a Texaco gas station on Belfort, telling her to deposit money at a bitcoin ATM inside.

Security camera footage shows her on the phone, heading straight to the machine. She deposited $1,000 in cash. The caller then instructed her to go downtown to the Harris County Sheriff’s Department to present the receipt and take a signature test. When she arrived, exhausted and afraid, officers told her she had been a victim of fraud.

Cindy Quintanilla, a forensic accountant with the FBI’s Virtual Asset Unit, explained that bitcoin ATM fraud is the new wire service scam.

“With crypto, money is in the control of another person in another country in 5 minutes, 3 minutes, 10 minutes,” she said.

She added that elderly victims are especially targeted because they have 401(k)s and homes they can borrow against.

An 80-year-old veteran in Florida was caught on an officer’s body camera depositing large amounts of cash into a bitcoin ATM. The officer stopped him, but couldn’t stop the transfer of money already fed into the machine.

No one from Coinhub, the owner of the bitcoin ATM involved in the Houston case, would comment on the fraud.

The state of California fined the company for violating consumer protection laws. In Washington, D.C., the attorney general sued Athena, one of the largest bitcoin ATM companies, claiming 93% of transactions on its devices in the district were outright fraud, with a median victim age of 71.

The Houston teacher said, “I spent a lot of time just kind of beating myself up about a thousand dollars that, you know, I just basically gave away. No one has money lying around just to give away.”

How Bitcoin ATMs work and how scammers use them

Bitcoin ATMs allow people to buy Bitcoin by depositing cash or using a debit card. The Bitcoin is then loaded onto their digital wallet. In fraudulent transactions, scammers trick victims into loading money into the scammers’ digital wallets instead.

Unless you want to buy cryptocurrency, you would never use one. Unlike traditional banks and investments, cryptocurrency is not regulated by the federal government. Your bank or law enforcement will never ask you to put money into a Bitcoin ATM.

What to do if you see someone being scammed

If you see someone depositing money into a bitcoin ATM and suspect they may be a victim, the FBI urges you to call the police immediately.

Cindy Quintanilla said, “Just make a phone call to the local police. You don’t have to interject yourself into the conversation… just say, ‘Hey, maybe you should send somebody to talk to this person and make sure that they’re not being victim of a crime.’”

Last year in White Settlement, Texas, a woman saw an elderly woman depositing cash into a bitcoin ATM and called the police. Officers intervened before the victim completed the transaction, recovering $23,000.

What to do if you or someone you know falls for a Bitcoin ATM scam

Getting money back after depositing it into a cryptocurrency ATM can be very difficult. Your best chance is to report it immediately.

• First, contact the Bitcoin ATM company that owns the machine. Check your receipt for contact information. (The contact information may be on the machine.)
• Call the police, the FBI or any authority that can help right away to contact the bitcoin ATM company.
• Report the fraud to your bank or wherever you withdrew the cash.
• File a report with the Internet Crime Complaint Center at ic3.gov. This agency tracks and traces scams to bust rings of scammers.

Quintanilla said Houston has had some success recovering funds recently because victims reached out instantaneously.