A bank scam involving a “gag order” is a form of extortion or impersonation fraud where scammers trick victims into withdrawing or transferring large amounts of cash by falsely claiming a judge, police officer, or government official has imposed a secret legal order.
How the Scam Works
- The Impersonation: Scammers pose as police officers, sheriff’s deputies, bank regulators (such as the FDIC), or court officials.
- The Emergency or False Claim: They claim a family member is in a serious accident/jail, or that the victim has missed a court date, has an active warrant, or owes unpaid fines. Sometimes they use AI voice cloning to make it sound like a distressed relative.
- The “Gag Order” Threat: The scammer tells the victim that a court or judge has placed a gag order or a strict secrecy rule on the matter. They demand that the victim stay on the phone continuously and lie to bank tellers or family members (e.g., claiming the cash is for “home repairs” or a car purchase).
- The Money Hand-off: Victims are pressured to withdraw large sums of cash from their bank, buy gold bars, or send wire/crypto transfers, then hand the money over to a courier or rideshare driver sent by the scammers.
Red Flags
- No legitimate court or law enforcement agency will ever issue a “gag order” by phone to stop you from talking to your bank or family.
- Police and courts do not demand cash, wire transfers, cryptocurrency, or gold bars over the phone to clear a warrant or fine.
- Pressure to stay on the phone or instructions to lie to bank staff are classic isolation tactics used to prevent anyone from intervening.
What to Do If This Happens
- Hang up immediately: Do not follow instructions from the caller, no matter how urgent or threatening they sound.
- Talk to your bank or a family member: Break the isolation rule immediately and tell bank staff or a trusted person what is happening.
- Report the fraud: If you have lost money or fallen victim to the scam, contact your local police department right away and file a report with the FBI Internet Crime Complaint Center (IC3)
Denver has an excellent new online resource to advise people on fraud and scams at www.denvergov.org/CyberSafe