Philanthropist Scott gave away billions, scam artists followed

NEW YORK • Ms Danielle Churchill needed help. She was raising five children in Sydney, Australia, and had to cover thousands of dollars in therapy fees for her 10-year-old son, Lachlan, who has autism.

She tried crowdfunding on the site GoFundMe, but raised a tiny fraction of what she had hoped for.

Late last year, she received the message that seemed to solve her financial problems. It was purportedly an e-mail from billionaire philanthropist MacKenzie Scott, a novelist best known as the former wife of Amazon founder Jeff Bezos, saying that she was giving away half her fortune and that Ms Churchill had qualified for a grant.

Ms Churchill searched Google for Ms Scott's name and the word "scam". Instead of warnings, she found numerous news articles describing how Ms Scott's representatives had e-mailed hundreds of non-profit groups out of the blue with offers of monetary support.

"People were thinking they were scams, but then they came true," Ms Churchill, 34, recalled thinking.

Over the course of last year, Ms Scott announced gifts totalling nearly US$6 billion (S$8 billion).

Her unconventional model of giving was praised for its speed and directness. But some of the seeming advantages - no large, established foundation, headquarters, public website or indeed any way to reach her or her representatives - are exactly what made her ripe for impersonation by scammers, as Ms Churchill would soon find out.

To get the money, Ms Churchill had to fill out a "membership form" sent by an group calling itself the MacKenzie Scott Foundation and set up an online account with Investors Bank and Trust Co.

She could see that the foundation had transferred US$250,000 into the account in her name, but because she was in Australia, she was told that she had to apply for a tax number and pay some associated fees before she could get access to the money and begin spending it on speech and occupational therapy for Lachlan.

"I was doing my research, looking up everything they were telling me," Ms Churchill said. "Everything you ask, they send you proof. The online bank says everything is secure." What she did not know was that there is no MacKenzie Scott Foundation. The Investors Bank and Trust Co, once based in Boston, had been folded into State Street Corp over a decade ago.

And she was not dealing with Ms Scott and her team but a sophisticated group of scammers adept at preying on vulnerable people.

In Ms Churchill's case, the scam involved not just the fake bank portal but counterfeit Facebook pages, WhatsApp messages and the use of a Bitcoin cryptocurrency app to whisk the money away, roughly US$7,900 in all, so she could not reclaim it with the help of a bank or credit card company.

An e-mail-security company in Israel, Ironscales, said messages purporting to be from representatives for Ms Scott had targeted roughly 190,000 e-mail accounts belonging to its customers. It began seeing the scam after Ms Scott's announcement on Dec 15 of nearly US$4.2 billion in donations.

Now, months after she set up an account at a bank that does not exist, Ms Churchill is aware of other apparent victims.

She continued to watch the Facebook pages purporting to belong to Ms Scott, and would notice people asking for help in the comments. Then the comments would disappear. One man posted photos of his debit card. "Snap its back and front and the location of the bank," read the instructions next to a smiling photo of Ms Scott.

Amount of gifts announced by Ms MacKenzie Scott over the course of last year

And on Ms Scott's Medium post from December announcing her latest grants, one man posted a comment asking about the same supposed business manager who solicited funds from Ms Churchill.

Professor Marti DeLiema, from the School of Social Work at the University of Minnesota, Twin Cities, said the method that Ms Scott used, notifying groups of a grant essentially out of the blue, was ripe for scammers to exploit.

"What a gift she's given them by this crazy way of giving that she's developed," Prof DeLiema said.

Even people with Ms Scott's resources cannot prevent swindlers from using their names.

Ms Scott gives to institutions - universities, food banks, front-line charities - not individuals. She has no accounts on social media like Facebook and Instagram, only her Medium page and a verified Twitter account with just three tweets.

Her organisation would never request fees upfront from grant recipients, said a person with knowledge of her giving. The person declined to comment directly on online deception taking place in Ms Scott's name or what actions she might take to help prevent it.

Ms Churchill did more research and realised it was highly unlikely that Ms Scott had been in touch with her directly, but still she could not cut herself off from the scammers right away. She had invested everything she could pull together in unlocking those promised funds. "My son needs it for a better life. And I have already lost so much," she said at the time.

After a few weeks, Ms Churchill went to the local police. They told her she had been conned and that there was no way to get her money back. "This experience has ruined my life, to be honest," she said.

"It's not a single scam involving one lone wolf," said Ms Kari-Anne Liebling at ScamSurvivors, a group where volunteers track online schemes. "After the initial point, the victim is scammed into another scam and another scam and another scam.

NYTIMES