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Personal Finance: The year in AI investment scams | Chattanooga Times Free Press

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Personal Finance: The year in AI investment scams | Chattanooga Times Free Press

American consumers surrendered over $12 billion to fraudsters in 2024 according to the Federal Trade Commission. Nearly half of that or just under $6 billion was due to investment scams, and 2025 is proceeding on pace to eclipse that number.

Over half of that financial fraud now involves the use of artificial intelligence, making these crimes easier to fall for and harder to detect before the damage is done. And while financial institutions and regulators are themselves employing AI to identify and mitigate investment fraud, the only truly effective prevention is to avoid becoming a victim. Here is a look at some of the most successful AI-enabled financial scams of 2025.

Phantom AI trading bots. Investors have long chased the holy grail of a fool-proof trading system that could generate consistent profits (in the finest tradition of Ponce de Leon). A host of new automated trading programs have appeared, claiming to harness the power of artificial intelligence to beat the market. Called “bots,” short for robots but essentially a software program capable of processing huge amounts of data to detect patterns, many make outrageous claims including guarantees or touting astronomical records of success.

While the track record of legitimate trading bots has been mixed at best, bad actors create programs that lure investors into depositing increasingly large sums to a broker dealer of their choosing. Once the pot has grown large enough, the bot may disappear or cease functioning, taking the investor’s funds with them, a scheme called a “rug pull.” Another variation is a pump and dump, where the bot promotes a little known cryptocurrency to artificially pump up its value until the bot sells its own holding, crashing the price. Others may trick the target into granting access to their digital wallet and then draining the account.

Celebrity deepfakes. A deepfake is a manufactured image or video that uses a type of AI called deep learning to replicate a real person and manipulate what they are saying. Fraudsters love to use fake celebrity endorsements because the familiar visage creates a sense of trust by the victim. Many people form what are called parasocial relationships with public figures, a one-sided connection in which the fan feels they know the celebrity and therefore trusts their recommendation.

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An AI generated bogus celebrity might offer a free product, asking only that the customer pay shipping by logging onto a counterfeit website. Poof, a $300 charge. Or worse. Other schemes involve promoting risky or fraudulent crypto investments or penny stock offerings.

According to cybersecurity firm McAfee, 72% of Americans have seen a deepfake pitch, 31% have clicked on the link, and 10% have lost money to the scam. According to McAfee, the top 10 most frequently faked celebs include Taylor Swift, Tom Hanks, Scarlett Johannson, Sydney Sweeney and Lebron James, pitching everything from free cookware and cosmetics to magic pink salt or even soliciting donations for victims of the Los Angeles fires. And the rise of deepfake scams doesn’t stop there. McAfee also lists the 10 most impersonated social media “influencers” including such household names as Pokemane, MrBeast, Karina and Brooke Monk, obviously targeting the younger set (as if the real TikTok influencers aren’t bad enough). Caveat emptor.

Crypto recovery room scams. What could be more fun for a lowlife criminal than to swindle an unsuspecting mark? How about swindling the same victim again?

Fraudsters pose as law enforcement agencies, law firms or crypto recovery specialists offering to assist in reclaiming cryptocurrency lost in a previous scam, hence the term “recovery room.” These chisellers often create flashy websites including AI-manufactured testimonials from nonexistent clients and charge a hefty upfront fee, typically payable in cryptocurrency as well. Any red flags here?

Tech support and fake QR code scams. It used to be the case that phishing emails were easily recognizable by their poor grammar and spelling errors. No more. Using AI, criminals produce professional looking pitches to entice gullible targets into signing up for tech support services they do not need and then fleece the victims. They often pose as well-known firms in the cybersecurity industry and convince their victims to grant remote access to infest their devices with malware.

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Another twist is the fake QR code. Perpetrators advertise or distribute handbills or emails with a QR code that once scanned can implant malicious bugs or infiltrate your personal information for nefarious purposes.

How to protect yourself. Bad guys are always a step or two ahead of regulators and law enforcement when it comes to deployment of artificial intelligence. Consumers need to be aware of the increasingly realistic solicitations to avoid falling victim.

Warning signs of AI investment fraud include guarantees of impressive returns. Representations that an investment is a sure thing or without risk are almost always fraudulent. If it sounds too good to be true …

Demand for upfront payment is another alarm bell, especially if payment is requested in cryptocurrency. Also be highly skeptical of any unsolicited offer to make money or recover lost assets, especially if they employ high pressure tactics. Always independently verify the identity of anyone with whom you are considering a financial transaction. And never scan a QR code from an unknown source.

Investment fraud often involves solicitation to invest in a hot stock or digital asset. Remember that it is illegal for an unregistered individual to solicit securities investments. Before opening an account, do a background check on the individual at BrokerCheck.Finra.org to review the disciplinary history and work experience of legitimate representatives.

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If you are the victim of a scam, report it as soon as possible to law enforcement. Contact the Federal Trade Commission at ReportFraud.FTC.gov, or the FBI Internet Crime Compliant Center at IC3.gov. They have online resources to direct you to your next steps. And although it is unlikely that you with be reunited with your money, you might help someone else avoid the same fate.

Christopher A. Hopkins, CFA, is a co-founder of Apogee Wealth Partners in Chattanooga.

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Finance

Departing inspector general targets Council Office of Financial Analysis

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Departing inspector general targets Council Office of Financial Analysis

The $537,000-a-year office created in 2014 to advise the City Council on financial issues and avoid a repeat of the parking meter fiasco has failed to deliver on that mission, the city’s chief watchdog said Tuesday.

Days before concluding her four-year term, Inspector General Deborah Witzburg said a shortage of both adequate staff and financial information closely held by the mayor’s office prevents the Council’s Office of Financial Analysis from helping the Council be the the “co-equal branch of government” it aspires to be.

In a budget rebellion not seen since “Council Wars” in the 1980s, a majority of alderpersons led by conservative and moderate Democrats rejected Mayor Brandon Johnson’s corporate head tax and approved an alternative budget, including several revenue-generating items the mayor’s office adamantly opposed.

But Witzburg said the renegades would have been in an even better position to challenge Johnson if only their financial analysis office had been “equipped and positioned to do what it’s supposed to do” — provide the Council with “objective, independent financial analysis.”

“We are entering new territory where the City Council is asserting new, independent authority over the budget process. It can’t do that in a meaningful way without its own access to financial analysis,” Witzburg told the Chicago Sun-Times.

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Chicago Inspector General Deborah Witzburg’s latest report focuses on the Chicago City Council’s Office of Financial Analysis.

Jim Vondruska/Jim Vondruska/For the Sun-Times

But the Council’s financial analysis office, she added, “has never been equipped or positioned to do what it needs to do. It needs better and more independent access to data, and it needs enough staff to do its job. It has a small number of employees and comparatively limited access to data.”

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The inspector general’s farewell audit examined the period from 2015 through 2023. During that time, the financial analysis office budget authorized “either three or four” full-time employees. It now has a staff of five .

Witzburg is recommending a staffing analysis to identify how many people the financial office really needs — and also recommending that the office “get data directly” from other city departments, “ rather than having it go through the mayor’s office.”

The audit further recommends that the office develop “better procedures to meet their reporting requirements” in a timely manner. As it stands now, reports are delivered “sometimes late, sometimes not at all,” the inspector general said.

“We find that those reports have been both not timely and not complete in terms of what they are required to report on and that those reports therefore have provided limited assistance to the City Council in its responsibility to make decisions about the city’s budget,” she said.

The Council Office of Financial Analysis responded to the audit by saying it hopes to add at least three full-time staffers in the short term and has made “some progress” over the last three years in improving their access to data, but not enough.

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The office was created in 2014 to provide Council members with expert advice on fiscal issues.

For nearly two years the reform was stuck in the mud over whether former 46th Ward Ald. Helen Shiller had the independence and policy expertise to lead the office.

Shiller ultimately withdrew her name, but the office was a bust nevertheless. In an attempt to breathe new life into it, sponsors pushed through a series of changes.

Instead of allowing the Budget chair alone to request a financial analysis on a proposal impacting the city budget, any alderperson was allowed to make that request.

The office was further required to produce activity reports quarterly, not just annually.

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Now former-Budget Chair Pat Dowell (3rd) then chose Kenneth Williams Sr., a former analyst for the office, as director and gave him the “autonomy” the ordinance demanded.

Two years ago, a bizarre standoff developed in the office.

Budget Committee Chair Jason Ervin (28th) was empowered to dump Williams after Williams refused to leave to make way for a director of Ervin’s own choosing.

The standoff began when Williams said he was summoned to Ervin’s office and told the newly appointed Budget chair was “going in a different direction, and I’m putting you on administrative leave” with pay.

“He took all my credentials and access away. I would love to come to work. I wasn’t allowed to come to work,” Williams said then.

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Williams collected a paycheck for doing nothing while serving out the final days remainder of a four-year term.

Ervin’s resolution stated the director “may be removed at any time with or without cause by a two-thirds” vote or 34 alderpersons. He chose Janice Oda-Gray, who remains chief administrator.

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Finance

Reilly Barnes Returns to Little League® as Purchasing/Finance Assistant

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Reilly Barnes Returns to Little League® as Purchasing/Finance Assistant

Little League® International has announced that Reilly Barnes accepted a new role as Purchasing/Finance Assistant, effective April 6, 2026. Barnes transitions from a temporary Purchasing Assistant to this full-time position to assist in the year-round demands of purchasing for the organization, as well as the region and Little League Baseball and Softball World Series tournaments. 

“We are thrilled to welcome back Reilly to our team as a full-time Purchasing/Finance Assistant. Reilly’s prior experience, time management, and attention to detail make him an invaluable asset to the purchasing team,” said Nancy Grove, Little League Materials Management Director. “We look forward to the positive contributions he will have on our organization.” 

In this role, Barnes will be responsible for processing purchase requisitions, coordinating souvenir products, and tracking order fulfillment. He will also assist with evaluating suppliers, reviewing product quality, and negotiating contracts for effective operations.  

After most recently working as a Logistician Analyst at Precision Air in Charleston, South Carolina, Barnes, a Williamsport native, returns after honing his skills in the fast-paced environment. Prior to his time at Precision Air, Barnes served as a Procurement Specialist at The Medical University of South Carolina, where his expertise and knowledge were instrumental in supporting both education and healthcare needs.  

“I am thrilled to return to Little League in this full-time role,” said Barnes. “Coming back to my hometown and having the opportunity to work for an organization that has played such a special part of my upbringing means a lot. I can’t wait begin this new opportunity.” 

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Barnes graduated from the University of Pittsburgh in 2022 with a B.A. in Supply Chain Management, Finance, and Business Analytics.  

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Finance

Why this sleepy Swiss town has become a ‘bolt-hole’ for the Gulf elite

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Why this sleepy Swiss town has become a ‘bolt-hole’ for the Gulf elite

As conflict continues to destabilise the Middle East, the Gulf States elite are seeking solace in European alternatives that offer comparable financial benefits with a far lower risk of war on the doorstep. One such destination is the small Swiss town of Zug, which is becoming a “bolt-hole” for Gulf-based wealth, said the Financial Times.

‘Swiss Monaco’

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