Prison based crypto scam

SMITH COUNTY – A Georgia inmate orchestrated a $13,000 scam by directing an elderly Smith County woman to a local crypto kiosk. Now, the Sheriff’s Office is pushing for legislation to outlaw the machines they say enable financial crimes.

The Smith County Sheriff’s Office took a theft report on March 31 from an elderly Lindale woman who said she received a call claiming she had missed a subpoena from the sheriff’s office.

According to our news partner KETK, officials said the caller used the name of a real sheriff’s office employee and told the woman she needed to pay $13,000 to avoid being arrested for missing her summons. The caller then instructed her to deposit the money into a Bitcoin kiosk at 302 West MLK Jr. boulevard in Tyler. The suspect used a 903 area code and also sent the victim a text message showing the amount she allegedly owed.

“After the phone conversation, the victim removed $13,000 from her bank account and deposited the cash into the Bitcoin machine on W. MLK in Tyler,” the sheriff’s office said.

A White Collar Crimes investigator, along with the sheriff’s office and the United States Secret Service, was assigned to the case. Investigators identified the suspect as Marcus Allen Daniels, an inmate in the Georgia Department of Corrections.

The Georgia DOC confirmed Daniels has a prior armed robbery conviction and is housed at Wheeler Correctional Facility. A shakedown on April 14 uncovered a cellphone inside Daniels’ cell, which was confiscated.

Evidence from the phone showed multiple messages between Daniels and others discussing Bitcoin wallet numbers and payment methods such as CashApp and Bitcoin QR codes.

Daniels had been disciplined twice last year, and Georgia DOC criminal analysts told local authorities they have seen a growing number of similar scams originating from inmates using illegal cellphones.

A probable cause affidavit was obtained on Wednesday for theft from the elderly, and an arrest warrant with a $1 million bond was issued.
Daniels is currently serving a 20-year sentence in Georgia; the warrant will be served when he is released or paroled.

Authorities attempted to recover the victim’s money, but investigators say the funds had already passed through several private cryptocurrency wallets, making recovery extremely difficult. Now, the Smith County Sheriff’s Office is calling for Texas to ban cryptocurrency kiosks, following states such as Indiana, Minnesota and Tennessee, citing FBI data showing high levels of fraud associated with the machines.

Sheriff Larry Smith and the sheriff’s office plan to reach out to state officials to pursue similar legislation in Texas.