July 24, 2024

Gary Kruglitz, as I shall call him to maintain discretion about him and his unique attire choices, is the owner of a pool and spa business. Standing above 6 feet tall, he’s a large man with a unique high pitched voice, dressed in thin dress shirts showing a hint of his body. His workplace, a pool warehouse filled with manuals, brochures and invoices, is his domain. However, his digital presence was nearly nonexistent, something I was soon to find out in a hard way.

Having paid $31,500 to Gary for a pool construction project, my wife and I were startled to face his vanishing act. We managed to get hold of three women who were part of the office; Cheryl, Cheryl, and Sheryl. Yet, Gary remained elusive. As urgency grew, I tried again to contact him, only to be met with an icy response from Cheryl, who promised to pass the message to him.

This was far from our initial agreement. In the beginning, we approached Gary in his Massachusetts office and signed off a contract for constructing a pool in our backyard. Our interest in having a pool was not determined by an aspiration to ostentatious wealth, rather it was stemmed more from a wish for personal satisfaction. We dreamt that a pool could be an enticing attraction for acquaintances.

Initially, the construction process was set to start in April 2020, yet given the upheaval brought about by the pandemic, matters were delayed. As Spring 2021 arrived, we all started making up for lost time. With delays due to the pandemic renovation boom, we grew ever anxious and we started calling Gary, hoping to secure our place in the rapidly rebuilding construction business.

Our calls in April and then May went in vain and, by June, our frustration was at its peak with Gary becoming completely non-responsive. We voiced our exasperation via email, expressing our displeasure at not getting a response from him. Relief came on July 5 when Gary replied to our email and assured us he was ready to start working on the project. He instructed us to make the payment of $30,000 before the commencement of the project.

However, the message instructed that the payment needed to be conducted via what seemed an unfamiliar method – it was to be sent through Zelle.

**Frequently Asked Questions (FAQs)**

**H2: What is Zelle, and how does it work?**

**H3: Zelle is a digital payment network that enables you to send money seamlessly and quickly.** The platform is supported by more than 30 banks in the United States and simplifies sending money to friends, family, or others you trust.

**H2: What could make transactions via Zelle risky?**

**H3: One potential risk with using Zelle is that the transaction is instantaneous and essentially irreversible.** If you send money to the wrong person, or if you fall for a scam, it can be challenging to retrieve your funds.

**H2: What steps did the bank take after being informed about the Zelle scam?**

**H3: In the case shared, the bank declined to take any responsibility for the scam.** They essentially washed their hands off the matter. This tends to be a common issue with Zelle transactions, which is why caution is urged when using the service.Gary, our pool builder, asked us to pay him via Zelle, a popular payment platform. As there were daily limits on the amount we could send, we started to pay him a little each day. We transferred $ 3500 on the 6th and 7th, and $5000 on the 8th and the 9th. Despite being more responsive as he started receiving his money, Gary’s emails raised our eyebrows. However, we chalked it up to him being more invested in pools than grammar.

After multiple transfers amounting to approximately $23000, we asked Gary for a signed receipt, which he sent promptly. He assured us work would start soon, but when the start day rolled around, Gary was a no-show. We finally got hold of him, only for him to claim he hadn’t emailed us in a month.

Zelle is owned by a company, Early Warning Services LLC, owned by a consortium of America’s largest banks, such as Chase, Bank of America, Wells Fargo, etc. The banks are not liable for losing money, thanks to this complex structure. They probably regretted inventing Zelle, born out of the need to combat the threat of free to use peer-to-peer apps like PayPal. Today, Zelle is America’s most used payment platform, recording a whopping 2.3 billion payments last year!

Sadly, the Zelle platform has also become popular among fraudsters due to the same advantages that made it popular among the customers. However, Zelle rarely discloses how often this happens. Couple this with the fact that the banks, police, federal agencies, and even industry professionals don’t take responsibility, it’s easy to see how these fraudsters operate with impunity.

## FAQs:

1. **What is Zelle?**
Zelle is a digital payment network that enabled us to send money to Gary. This platform enables peer-to-peer money transfers, providing a fast, safe, and easy way to send and receive money with others.

2. **How did Gary scam us using Zelle?**
Gary had us believing he was ready to start the pool construction soon; hence, we began transferring money in installments as suggested. He communicated via emails, though they were a bit strange. But when it was time to start the project, he disappeared and claimed he hadn’t emailed us in a month, indicating that we had been interacting with a fraudster.

3. **Why is Zelle popular for committing fraud?**
The structure of Zelle allows for speedy and straightforward transactions. Unfortunately, this works in favor of defrauders too because they can trick people into sending money and swiftly get away with it. It becomes even more problematic because banks, the police, and even federal agencies don’t take responsibility, allowing these fraudsters to operate without any real challenges.
While examining an email from our contractor, Gary Kruglitz, we realized there were significant differences compared to his usual communication style. The receipt we received from Royal Palace Pools and Spas, Gary’s company, was littered with typos. But most notably, the payment information was different. Gary hadn’t asked us to transfer payment as usual, but to a pair of unfamiliar email addresses via Zelle.

We couldn’t believe our naivety. We had transferred a total of $30,500 to two strangers, one who goes by `sunshineyasmin48@gmail.com` and another to `personalbreezy@gmail.com`. On reflection, we saw our trust in Gary as the catalyst for such an error, laughing at our elderly parents for falling victim to similar scams.

![An illustration of an invoice on the left and someone sending money through Zelle on the right](https://i.insider.com/650cb69412dc4f001a17a712)

We were quick to rationalize the situation. Contractors are known to cut corners so, so requesting an unconventional form of payment didn’t seem too out of character. We figured we were helping Gary avoid some red tape. This wasn’t the first time a contractor asked us for a favor. But as we looked closer, we realized our mistake.

Our trust was the very fabric holding these transactions together. Usually, we’re dealing with a nameless network of faceless entities, trusting that what is supposed to happen, will happen. But now we had been exposed to the corners of this trust-based ecosystem we didn’t want to know existed. All our digital interactions now seemed laced with a hint of suspicion.

However, we strived not to feel sorry for ourselves. We are privileged individuals in a capitalist society, and we believed we had solutions. We just needed Chase to retrieve the funds from the recipients’ account. So, we wasted no time in contacting them.

![An illustration of a man yelling operator into a phone](https://i.insider.com/650cb17619f33e0019045c4b)

Chase’s voice-operated system felt like entering a black box. We tried to reach a human representative, bypassing the built-in robot. Finally, a woman with a southern accent answered our call. We asked for help, only to be redirected to a different department.

### Frequently Asked Questions
#### How can I keep my email secure?
To ensure email security, you should have strong, unique passwords and two-factor authentication turned on for all accounts. Regularly update your passwords, avoid clicking links or opening attachments from unverified sources, and ensure connected software or services are also secure.

#### How to recognize a scam email?
Scam emails often have urgent, threatening or extreme language designed to encourage immediate action. They can include requests for sensitive information, have attachments, or propose unusual payment methods. Rich details like spelling mistakes or unprofessional design can also indicate fraud.

#### What to do once I realize I’ve been a victim of an online scam?
Firstly, you should contact your bank immediately to cancel transactions or freeze your account. Change your passwords to prevent further unauthorized access. You may wish to contact the police, who can liaise with the appropriate cybercrime unit. You should also report the scam to your email provider to block the sender’s address.In order claim a refund from an online scam or secure a gin and tonic on your flight, it’s unnecessary to be unpleasant to someone who is likely working for a meager wage and has other responsibilities like taking care of a toddler.

When our funds were stolen, we reached out to a specialist in an out-of-reach call center. He was sympathetic, although his empathy seemed monotonous. He was probably located in a country six time zones away and balancing his job with higher education. He promised us that a case would be opened and that his team would be right on it.

We expected an immediate response of shock and urgency from the staff at Chase to recover our stolen funds. But the reality of customer service was far from our expectations. The fraud-investigation team got back to us after a long while only to confirm our worst fears: the stolen money was gone, likely irretrievable.

We did confront the prime suspect — Gary Kruglitz. However, his lack of technological knowledge and his incredulous question, “What’s a zelle?” made us drop him as a suspect.

The question that lingers is how someone made away with $30,000 and remained elusive from any investigations. This involves a complex process, but with the dark web, it’s accessible to anyone with a bit of pluck.

The first step, the fraudsters targeted Gary, but not as an individual. They likely targeted several others with similar technological ignorance, those often conducting large transactions, and likely to fall for phishing scams. The culprits might have made him click a malicious link or even bought his hacked credentials off the dark web.

Once the fraudsters gained access to Gary’s email, they had all the details they needed to carry out their scam. But instead of illicitly approaching us directly, they used middlemen — those possibly deceived themselves by ‘work from home’ scams or ‘romance scams’ — to funnel the money through to avoid raising suspicions.

Once the money was passed on, it was most likely converted into cryptocurrency — a virtually traceless and anonymous payment method less regulated than traditional financial flows. And once that conversion was done, the money was virtually irretrievable.

1. **How does the scam transaction take place?**
The scammers first target a technologically unsophisticated individual and trick them into revealing their mail password through phishing or buy it off the dark web. Once they have these credentials, they observe all the emails and transactions and have all they need to ask for money.

2. **How does a scammer prevent getting caught?**
To avoid suspicion, the scammer does not ask their victims to send money directly to them. Instead, they employ intermediaries who are usually almost as innocent as the targets themselves to funnel the money through.

3. **What happens to the scammed money?**
Once the money is funneled through intermediaries, the scammers move it on to another account or convert it into cryptocurrencies which are practically impossible to trace. Once they have successfully accomplished this, retrieving the losses is highly improbable.Cryptocurrency invited criminals and even nations like North Korea into its fold, making way for a problematic and imbalanced system. This form of money can’t function if anonymity is allowed to persist.

Reporting a cyber crime proved to be a big challenge. Nobody seemed willing or able to provide the needed assistance, at least not initially. Calls to the FBI, state and local police, and Massachusetts attorney general didn’t yield much. The only advice was to fill out a form online, and even two years after doing this, there has been no response.

![Couple sitting with a police officer](http://www.w3.org/2000/svg)

There was some hope when the local police department, which consists of a maximum of three officers, showed a willingness to investigate. But even their best efforts did not lead to the formation of an “internet crimes task force.”

Contacting the digital payment service Zelle wasn’t very helpful either. It was a game of passing the buck between the banks and Zelle, with no one wanting to take responsibility. The real problem is that nobody is taking ownership for such cases. The FBI, State Police, local police, Chase bank, Zelle – all were dismissive. This apparent apathy leaves victims in a virtually lawless environment unless the stolen amount is in the millions.

![Illustration of money being fished out](http://www.w3.org/2000/svg)

Evgeny Morozov, an author and researcher, believes that digital services such as Zelle should be required to protect users from fraud, akin to protections provided for credit card users with the Fair Credit Billing Act. Unfortunately, there doesn’t seem to be much political resolve for enforcing these regulations.

Eventually, it took the leverage of being a reporter writing about Zelle for Chase bank to find and shut down the fraudulent account, and recover a fraction of the stolen money.

### Frequently Asked Questions (FAQs)

**_How common are crimes related to cryptocurrencies?_**

Cryptocurrency crimes have become increasingly common due to the anonymity it provides. Cyber criminals, rogue nations and even organized crime groups have been attracted to it.

**_How can victims report their experiences with financial crimes?_**

Victims can report to local police authorities, the FBI, and their respective banks. Online forms are available for reporting to federal authorities. However, there appears to be a lack of effective response in many cases.

**_Should digital payment services like Zelle be held legally responsible for fraud cases?_**

While it isn’t currently required, some believe digital platforms should have some responsibility in protecting users against fraud. This could potentially function similarly to the protections available for credit card users. However, this proposition doesn’t appear to have much political or institutional support at this time.The event of having $30,000 stolen has left a lasting impact on us. We reasoned, in some consolation, those who took our money probably needed it more. However, the reality is that such thefts are commonplace today. Unsigned amounts of cash are falling into the pockets of unknown cyber criminals. These criminals utilize phishing approaches, manipulate love-struck individuals, and exploit crypto listings and password exposures on the dark side of the web.

The overwhelming prevalence of this issue may eventually force the government to take steps to shield customers from online frauds like those involving Zelle. More broadly, though, this highlights a pervasive problem in the modern world: distinguishing real from fake individuals and deciding who bears the consequences.

The race between those validating authenticity (through methods like passwords, two-factor authentication, and biometric scans) and those obscuring it, is moving at a seismic pace. An identity-protection firm, Clear, shared that they’ve formulated a tech they termed as “liveness detection”. To confirm one’s identity, everything proving their identity must be provided, and then one has to exhibit they’re alive, in the real world, during the transaction. This involves performing tasks in a typically human manner.

In today’s digital age, demonstrating our existence in a moment, the core of our security processes, has become complex. While identifying real individuals gets increasingly difficult, the trend to disconnect from real-world identities gets more enticing. Crypto anonymity, possible lifelike metaverse simulations, and the ever-evolving AI deepfakes all play a part in this. Determining anyone’s real identity seems to be turning into an existential question, as well as a logistical one. All this can be summed up as: anything could be accurate, nothing is real. The simulation is on the brink of a breakthrough.

Two years after the incident, we finally procured our pool, with Gary’s help. He seemed to understand the situation and never apologized for the theft that occurred under his name. His reaction when asked about changing his password was befuddled – he confidently declared that everything was fine. Ultimately, we paid him with a check.

Devin Friedman has contributed articles for renowned publications including GQ, Rolling Stone, and The New York Times Magazine.

#### Frequently Asked Questions

##### What should Gary have done to prevent the fraud?
Gary, like many others, should have been more cautious about his digital security.

##### What happens next with the theft crime in this case?
As we can’t be sure who was behind the theft or where they are based, it’s unlikely legal action can be taken. More often than not, cases like these are reported to the police and the bank, but the money is not returned.

##### What is “liveness detection”?
“Liveness detection” is a method employed by the identity-protection company Clear, which requires multiple verifications of identity and the individual’s real-time presence at the location of the transaction.