All Steve Beauchamp wanted was money for his family, and he thought Elon Musk could help.
Beauchamp, an 82-year-old retiree, saw a video late last year in which Musk promoted a radical investment opportunity that promised rapid gains. He contacted the company behind the ad and opened an account with $248. In a series of trades over several weeks, Beauchamp drained his retirement account, ultimately investing more than $690,000.
And then the money disappeared, into the hands of digital fraudsters who are at the forefront of a new wave of artificial intelligence-enabled criminal enterprises.
The fraudsters edited out real interviews with Musk and used AI tools to replace his voice with a replica. The AI was so sophisticated that it could minutely change Musk’s mouth movements to match a new script they had written for their digital impersonator. To the average viewer, the manipulation may not have been noticeable.
“I mean, his photo, that was him,” Beauchamp said of the Musk video he saw. “Now, I’m not sure if the AI made him say the things that he said. But as far as the photo goes, if someone said, ‘Pick him out of the line,’ that’s him.”
Thousands of these AI-driven videos, known as deepfakes, have flooded the internet in recent months, showing fake versions of Musk deceiving would-be investors. Deloitte estimates that AI-driven deepfakes could contribute billions of dollars to fraud losses each year.
Videos cost just a few dollars to produce and can be made in minutes. Videos are promoted on social media, including paid ads on Facebook, to increase your reach.
“This is probably the biggest deepfake fraud campaign ever,” said Francesco Cavalli, co-founder and head of threat intelligence at Sensity, a company that monitors and detects deepfakes.
Many of the videos are eerily realistic, featuring Musk’s characteristically raspy speech and South African accent.
Source: The Wall Street Journal (original clip)
Sensity, which analyzed more than 2,000 deepfake videos, said Musk was the most commonly featured spokesperson in the videos so far.
Sensity research found that he has appeared in roughly a quarter of deepfake scams since late last year, and in cryptocurrency-focused videos, he appears in roughly 90% of them.
The deepfake ads also featured famous investors such as Warren Buffett and Amazon founder Jeff Bezos.
Musk did not respond to a request for comment.
Prime Video India (Original Clip)
It’s hard to get an exact count of how many deepfakes are circulating online, but a search of Facebook’s ad library for common terms promoting scams turned up hundreds of thousands of ads, many of which contained deepfake videos. Facebook has already removed many of them for violating its policies and disabled some of the accounts responsible, but others remain online, and new ones seem to appear every day.
YouTube is also awash with fake videos, often with labels suggesting the videos are “live,” when in fact they are pre-recorded deepfakes.
“Live” YouTube Scam
A search for “Elon Bitcoin Conference” on YouTube turns up dozens of purportedly live deepfake videos of Musk promoting the cryptocurrency scam, some of which have been viewed by hundreds of thousands of people.
After former President Donald J. Trump spoke at a Bitcoin conference on Saturday, YouTube published dozens of pre-recorded deepfake videos using the “live” label that showed Elon Musk personally doubling cryptocurrency sent to his account. Some of the videos had hundreds of thousands of viewers, but YouTube says scammers can use bots to artificially inflate viewer counts.
A Texas man said he lost $36,000 worth of bitcoin after watching a “spoof” of Musk speaking in a YouTube Live video in February 2023, according to a report by the Better Business Bureau, a nonprofit consumer advocacy group.
“I sent bitcoin and never heard anything back,” the person wrote.
Source: CNET (original clip)
In a statement, YouTube said it removed more than 15.7 million channels and 8.2 million videos for violating its guidelines between January and March of this year, most of which were for violating its anti-spam policies.
In response to the proliferation of fake ads, Australian billionaire Andrew Forrest, whose video was also used to create Facebook’s deepfake ads, filed a civil lawsuit against Facebook’s parent company Meta, alleging negligence in the way it ran its advertising business. He argued that Facebook’s advertising business “lured innocent users into bad investments.”
Mehta, who owns Facebook, said the company trains automated detection systems to catch fraudulent activity on its platforms, but noted it’s a cat-and-mouse game with well-funded fraudsters constantly changing tactics to evade detection.
YouTube pointed to policies that ban fraudulent or manipulated videos, and in March the company required creators to disclose if they use AI to create realistic content.
The internet is filled with similar reports of people being scammed out of thousands of dollars, some even losing their life savings. Hong Kong’s Securities and Futures Commission issued a warning about Musk-impersonation scams in May. Earlier this year, the Federal Trade Commission and Federal Bureau of Investigation warned Americans about the rise of AI-enabled cybercrime and deepfake scams.
“Criminals are leveraging AI as a force multiplier to make cyberattacks and other criminal activity more effective and harder to detect,” the FBI said in an emailed statement.
Digital fraud is as old as the internet itself, but the new Musk-themed deepfake emerged last year after sophisticated AI tools became publicly available, allowing anyone to replicate public figures’ voices and manipulate their videos with eerily accurate results, drawing attention from pornographers, meme makers and, increasingly, con artists.
“Deepfake Elon Musk”
Thousands of ads circulating online feature an AI version of Elon Musk touting cryptocurrency products and promising big returns on investments.
Sources: TED Talks (first and second videos), Fox News (third video)
“That’s changing because organized crime is realizing, ‘There’s money to be made from this,'” said Lou Steinberg, founder of cybersecurity research firm CTM Insights. “So we’re going to see more and more of these fake attempts to steal money.”
The AI-generated videos are far from perfect — Musk sounds robotic in some videos and his lip movements don’t always match what he’s saying — but they seem convincing enough to some of the scammers, and experts say they’re constantly improving.
Sensity’s Cavalli said the videos cost just $10 to make, and the scammers, who are mostly based in India, Russia, China and Eastern Europe, use a combination of free and cheap tools to create fake videos in under 10 minutes.
“It’s working,” Cavalli said, “so they’ll continue to expand the campaign internationally, translating it into multiple languages and continually spreading the scam to more targets.”
Many scams promote fake AI-powered software and claim to offer incredible investment returns. Targets are encouraged to send small amounts, such as $250, at first, and then the scammers trick them into gradually increasing their investment, claiming that the value of their initial investment will increase.
In a deepfake video taken from a Tesla shareholder meeting, Musk is seen describing an AI-powered automated trading product that can double a certain investment amount every day.
Source: Tesla (original clip)
Experts who have studied the cryptocurrency community say Musk’s unique global fanbase of conservatives, dissidents and crypto enthusiasts is often attracted to alternative routes to wealth, making him an attractive target for scammers.
“There are certainly people out there who believe that the secret of wealth is hidden from them,” said Molly White, a researcher who studies the cryptocurrency community. They think “if they could just find that secret, that would be enough.”
Scammers often target older internet users who are familiar with cryptocurrency, AI and Musk, but not so familiar with the safest ways to invest.
“Seniors have always been a vulnerable and lucrative demographic for fraud,” said Finn Brunton, a cryptocurrency market expert and professor of science and technology studies at the University of California, Davis, adding that seniors were targets for fraud long before platforms like Facebook made them more likely targets.
Beauchamp, a widowed woman from Ontario, Canada, who worked in corporate sales until she was 75, came across the ad shortly after joining Facebook in 2023. Beauchamp remembers seeing the video live on CNN, but a CNN spokesperson said Musk hasn’t appeared for an interview in years. (The New York Times was unable to identify any videos matching Beauchamp’s description, but she said the story was nearly identical to another woman’s account of being duped online by a deepfake of Musk.)
According to emails between Mr. Baucham and MagnaFX obtained by The New York Times, Mr. Baucham transferred $27,216 in December to a company calling itself MagnaFX, which made it appear as if his investments were growing. At some point, a sales representative apparently used software to take control of Mr. Baucham’s computer and transfer the funds to invest.
To withdraw the money, Beauchamp was told he would have to pay a $3,500 administration fee and another $3,500 in processing fees. He transferred the money, but was then told he would need to pay $20,000 to withdraw some of the funds – about $200,000 – which he did.
Beauchamp told the scammers he’d maxed out his retirement savings, maxed out his credit cards, maxed out his lines of credit and borrowed money from his sister to invest and pay the fees, but the scammers wanted more than that. They demanded he pay more fees. Beauchamp called police.
Most evidence of MagnaFX has been taken offline, including its website and the phone numbers and email addresses used by the agents Beauchamp spoke to. Another company with a nearly identical name advertising a similar service did not respond to requests for comment.
“Now is the time to call me an idiot, a fool, a moron or any other term you can think of,” Beauchamp wrote in a report filed with the Better Business Bureau.
Beauchamp said he was managing to pay the bills using small retirement accounts and annuities that he did not disclose to the scammers, and that he had planned to travel the world after retirement.
Beauchamp said he filed a report with local police but has seen little progress on the incident.
“My case is on hold because of all the fraud going on everywhere,” he said. “I don’t have high hopes.”