KELLIE NEWSOME: Even healthy minds are prone to false beliefs, and today we’ll cover a particular type that is draining billions of dollars from people’s wallets. Welcome to The Carlat Psychiatry Podcast, keeping psychiatry honest since 2003.

CHRIS AIKEN: I’m Chris Aiken, the editor-in-chief of the Carlat Report.

KELLIE NEWSOME: And I’m Kellie Newsome, a psychiatric NP and a dedicated reader of every issue. Let’s start with a scenario. You have a private practice in Chicago. A woman calls you and says she was referred by a colleague, that she had heard you work very well with college students and wants to see if you’d be a good fit for her son. After some questions, she decides you are the one. Her son will be in Chicago for the summer, and she wants to make sure he has weekly therapy established. In fact, she believes he won’t keep up with it unless she pays in advance, and she’s going to pay your private rates; money is not an issue, she gently reminds you. You ask her to send $8,000, but when the check arrives, it’s for $12,000. You call her up. She’s distressed and embarrassed and asks if you could send her the $4,000 difference first, so the check won’t bounce. You hesitate, but she’s been very kind and easy to work with. You send her the check, and when it clears, you deposit hers, but the $12,000 bounces, and she is nowhere to be found.

CHRIS AIKEN: Most likely, the woman doesn’t have a son. This is a common scam. In recent years, scams have grown up. They are as personalized as the ads we see on social media, and there is a scam for everyone, every woman child, man, and gender unspecified. This isn’t even the only scam that targets mental health professionals. Last year, a very believable voice called my emergency line saying the city had been trying to reach me about a fine for missing jury duty and that if I didn’t pay, I would be arrested. Apparently, it’s common for doctors to skip jury duty, and someone had been calling every emergency line in the city, or more likely the country, hoping for fake payouts. But this podcast is not about us, it’s about our patients, who may be victimized by scammers, and for whom we may be the only ones who can warn them, or who they feel safe talking to about it after the shame and betrayal of a scam hits.

KELLIE NEWSOME: We opened with a therapy scam because it illustrates a point. Scam victims are no longer limited to older people, lonely people, or people with mental illness. Everyone can be scammed, and more and more are. According to the FBI, more than 1 in 3 Americans report being scammed in the past year, and the Gen Zs are just as likely to be victims as the Boomers.

CHRIS AIKEN: That is a surprising statistic because for year’s we’ve associated scams with older adults. There are a lot of papers in the geropsychiatry literature, and they find older adults are more vulnerable to scams because of factors like social isolation, their economic affluence, struggles with technology, and cognitive impairments. Susceptibility to scams has even been identified as an early sign of dementia. But those studies are based on the scams of yesteryear, which were not sophisticated enough to rope the average person in. The scammers have gotten better, and you don’t need to have cognitive problems to fall into their trap. There is a scam for everyone, like the job scam where someone goes through interviews and background checks and is offered a job but then has to turn over money in the final step through some convoluted scheme like buying equipment. Sometimes, their phony employer sends them a fake check that is too large – as in the therapy example above – and asks for part of it back.

KELLIE NEWSOME: Among the 1 in 3 Americans who were scammed last year, a third suffered serious financial consequences, and less than half reported the scam. Today, we speak with Cathy Wilson, a therapist who specializes in victims of financial fraud from the Lifepaths Counseling Center in Colorado.

CATHY WILSON: I got working with scam victims a little over 10 years ago. I had a client who had been scammed, and I went looking for resources to help both of us and found nothing as far as the mental health impact. As a result, I wrote something and put it on my website since there was nothing else out there. That webpage got so much traffic it far surpassed all of my other pages combined. That led to writing a book and then creating training for mental health folks, and now I am in the advocacy realm as well. We all call ourselves fraud fighters. There is a scam for everyone, so we all need to be careful and on guard. Perhaps the most prevalent is romance scams, there is one in particular that combines crypto investing with it that we refer to as pig butchering. No one really likes that term, but it can start very innocently. I am referring to them personally as wrong number texts, when you get a text, and it is, Hey, are you on your way? and you don't know who this is, that is a scammer trying to start a conversation with you, and here is where our kindness can get us in trouble. When you respond, then they say, Oh, I am so sorry. I hope I didn't ruin your day, you know, Have a good day, and sometimes they might come back and say something more to try and get you talking. If they can get a conversation going, then they can eventually lead that to friendship or romance and investing talk, scammers are playing a long game with this. So, they may wait till three months before they bring up anything about investing, and then what a client might say about a romance scam, they might start talking about this person they met and they're falling in love quickly, but they haven't met in person, there's multiple reasons they can't meet in person. So, if a client starts talking about a new friend that wants them to invest, these are warning signs for us.

CHRIS AIKEN: Pig butchering can start with wrong numbers, social media DMs, or connections through dating sites. Soon, they will move the conversation off the platform where they might be detected and onto an anonymous texting app like What’s App. One victim was contacted by the supposed lead singer of an obscure 90s band she once adored. At first, the fuel is romance or friendship, but greed quickly takes over as the driving force. The scammer will casually mention that they have been making big money through a crypto trading service. Naturally, you want to know more. They will advise caution, suggesting you invest a small amount, like a few hundred dollars. Next, you are watching that money grow in what looks like a legitimate trading site. Scammers have created convincing trading interfaces that replicate the real thing. When your $600 grows to $1,500, you wish you’d invested more, and soon you’ve wired over your retirement fund. But the news is all good. The $50,000 you invested has grown to nearly $200,000. The scam can go on as long as you can pay, but when you try to take the money out, it usually hits a brick wall, but not right away. This is called “pig butchering” because the aim is to use every part of the big. So, they will tell you that the trading platform is based in Taiwan, and you need to pay international taxes before you can withdraw any funds. At this point, the scam changes to a good cop bad cop game. The person who introduced you to the crypto platform becomes the good cop, enraged on your behalf over the bureaucratic delay. They offer to help, and there’s more back and forth, and eventually, you borrow $10,000 from your relatives to pay the taxes so you can secure your gains.

KELLIE NEWSOME: In Shane Hane’s case, it wasn’t $10,000. As the CEO of a Kansas bank, Shane had access to serious money. Scammers robbed him of $47 million in a pig butchering scam that played out much like the one we described. But most of the money wasn’t his. The bulk of it came from customer deposits at the Heartland bank, with smaller change from other funds Shane had access to $40,000 from his church, $10,000 from an investment club, and $60,000 from his daughter’s college fund. Besides losing his job and his savings Shane is now serving a 24-year prison sentence for embezzlement. His story is unique only in the magnitude of the loss. Pig butchering is going on everywhere. Last month the Economist reported on lawyers, police officers, FBI agents, and professors who’ve been butchered – as well as a psychiatrist who declined to report the fraud because he was afraid his clients would find out and his reputation would be tarnished.

CHRIS AIKEN: I learned something from Shane's story. A few years ago, I was treating a patient who was being victimized by what looked to me like an obvious scam. This was before scammers got smart. It was a variation of the old Nigerian Prince scam – also known as the Spanish Prisoner – which dates back to the late 1600s. My patient had fallen in love with a man she never met. He was in Greece and wanted to come visit her, and she had sent him $6,000 for the plane ticket. Now, he needed more to secure some government papers so that he could fly, and she was about to send him another $3,000. Her sister had urged her to stop. Wait, I said, I think your sister is right here. This is a common scam. I was naïve. When people are deep in the scam, you can no more snap them out of it than you can convince a die-hard Democrat to vote for Trump or a MAGA voter that Kamala was right. The more people lose in the scam, the more they tend to double down – cognitive dissonance is a hard thing to break. So, my patient waited at the airport and waited again a second time.

KELLIE NEWSOME: The same thing happened with Shane. When the FBI got wind of his unusual cash transfers, they came knocking, Shane was unphased, convinced that he had much more money in his investing account than smaller seed money he had borrowed from his customers. When the FBI told him he had been scammed, he didn’t believe them. He didn’t even miss a beat. He went straight to his advisory board to ask for a loan so that he could pay the international taxes and collect his reward.

CHRIS AIKEN: Scams play on our deepest hopes and fears. Next week, we will learn how to help people untangle themselves from these psychological webs. It’s a lesson that applies to any self-destructive road or false belief.

KELLIE NEWSOME: Here’s. a preview of the CME quiz for this episode. Earn CME for each episode through the link in the show notes.TRUE or FALSE: In the U.S., victims of scams are as equally common in older and younger adults. Cathy Wilson is a Licensed Professional Counselor in Colorado. She offers online courses on helping victims of scams and is the author of The Emotional Impact of Being Scammed and How to Recover. Do you see patients with symptoms of ADHD who use cannabis? You are not alone, and in our April issue, we interview Sara Polley on how to manage this complex picture and when to use or avoid stimulants. Find it online and get $30 off your first year’s subscription with the promo code PODCAST. Thank you for helping us stay free of commercial support.