‘I was heartbroken’: Two Canadians lose $2.3 million to crypto scams

W5 investigates how Canadians are being aggressively targeted by AI-generated videos and images to invest in cryptocurrency scams.

Canadians are being aggressively targeted by Artificial Intelligence (AI) generated videos and images to invest in cryptocurrency scams, a W5 investigation has found.

Some investors have lost their entire life savings by the time they realize it’s a scam.

“I was heartbroken. Broken in pieces,” said a woman who W5 is naming Denise as she didn’t want to be identified after losing her life savings in a cryptocurrency scam.

Denise, a 51-year-old woman from Markham, Ont., said she is devastated and embarrassed to have lost $1.7 million in a cryptocurrency scam after viewing a AI-generated video online.

In July 2023, she saw a video on Facebook featuring billionaire Elon Musk claiming that by following his instructions, she could get rich fast.

But the clip was a AI-generated scam video created by criminals to get Denise to invest. The video was manipulated, and Musk’s voice was altered to appear as though he was telling people to invest in his platform.

“It was Elon Musk, and he said you just have to invest $250, and you get on his platform, and you are going to make money daily,” said Denise.

Denise claimed that after e-transferring $250 to what she thought was Musk’s platform, she was told she received US$30 in profit from her investment, two days later.

This was enough to convince her it wasn’t a scam and was told if she invested more, she would make more.

“They said people are making so much money and that I should put in more and I said OK,” she explains.

Denise was shown documents that made it appear her investments were growing. Convinced she was making money, she took out a second mortgage on her home.

“I applied for a second mortgage on my house for a million dollars and I took it out and sent it to them. At times, I would send $300,000 and then $350,000,” said Denise.

She needed her husband to sign off on the second mortgage, and while he had concerns and was apprehensive, she said she convinced him to do it, and he agreed.

After spending $1.2 million, she thought her investments had grown to more than $3 million, but when she tried to withdraw the money, she was told she needed to pay taxes and fees.

Denise borrowed another $500,000 from family and friends, as well as maxing out her credit cards.

She ultimately lost $1.7 million to the scam.

When she pleaded with the scammer on the phone that she was going to lose her home, he told her, “Well, I guess you’ll have to sell it,” and hung up on her, she said.

“I don’t have no retirement savings, everything is gone,” said Denise.

Fake crypto ads luring victims

There are many AI-generated cryptocurrency videos featuring former prime minister Justin Trudeau, current Prime Minister Mark Carney, as well as actors, celebrities and news anchors.

Criminals use AI-generated videos to make it appear as though someone is saying something they are not.

Donald Hanrahan, of Charlottetown, P.E.I., said he saw a story when he was online last year about investing in cryptocurrencies that appeared to be promoted by the popular TV show Dragon’s Den.

“They were investing in cryptocurrencies, and you could invest for as little as $250,” said Hanrahan.

The Canadian version of Dragon’s Den currently has a warning on its website stating it was targeted by several fake advertisements on Facebook that appeared to be endorsed by the show but were not.

Hanrahan believed the AI-generated video he saw at the time was genuine and he started investing with small amounts into the cryptocurrency platform, but eventually put in everything he had.

“I was giving them at one point $10,000 a day and it eventually added up to $600,000,” said Hanrahan.

Hanrahan thought his investments had grown to well over $1 million, but like Denise, when he tried to withdraw his funds, he couldn’t and that’s when he realized he had been scammed out of the entire amount.

“I was scammed by professional people, but that doesn’t give you much consolation when you lost all that money,” said Hanrahan.

According to the Canadian Anti-Fraud Centre, Canadians have lost $1.2 billion to investment scams in the past three years and that’s only what’s been reported -- it’s believed to be much higher.

Many cases involve people investing after seeing AI-generated scams.

“It’s really hard to know what’s real now because the technology is so sophisticated. It’s almost impossible to know what is real and what is fake in some cases,” said Jeff Horncastle, acting client and communications outreach officer with the Canadian Anti-Fraud Centre.

In part two of this series airing tomorrow, W5 profiles a cryptocurrency investigator who says many of the scams targeting Canadians are coming from southeast Asia, and there is a shocking reason why the scammers may have no choice but to break the law.