'That's why it's so diabolical': Scammer uses a Chicago celebrity's name to bait people and con them out of thousands in cash
Chicago (CBS) – Ibi and Lulu Cole are sisters and successful businesswomen in the financial banking industry.
One cold day in January, a man was trying to get Lulu's attention in the Bank of America parking lot on 83rd Street.
"He called me over to his vehicle," she said. "Initially, I was very hesitant to even, you know, engage with conversation with him."
Then the small talk started. "He asked me about my car and if I liked it. He said that he was interested in possibly purchasing one for his mother."
That's how it started -- a conversation that ended up costing Lulu and Ibi $36,000 in cash. The Chicago Police Department began really investigating this case after the CBS 2 Investigators started asking questions. Sources say the same scam has been going on for nearly a decade.
THE PITCH
She started to walk away, but then, "He asked me if I had any bills," Lulu said.
The man, who called himself Jeffrey Washington, claimed "CEDA [the Community and Economic Development Association] and Chance the Rapper were working together in a program to pay off mortgages and other financial obligations for residents in the area, including light bill, gas bill, insurance, car insurance, telephone bills and things like that."
She emphasized this man told her he was working with CEDA and Chance.
She initially said no thanks, because "you're always leery of anybody approaching you -- you know, under that guise."
Washington then began weaving a tale of community service, according to Lulu, along with this urgent need to give away $600,000.
"He was like we have to use this money before the end of the day. If we don't spend this money, we lose out on the opportunity to help more people in the coming year." He further explained, "They'll reduce the amount of funds that we'll get, and that reduces the amount of people that we can help. "
Washington's apparent commitment to community struck a chord with Lulu. "It's an underserved area if there's a chance that letting him pay one bill for me is an opportunity for a mother to be able to feed their kids for another month, or anybody to be able to stay in their housing for an additional month or two months … it was a small sacrifice for me, and a big opportunity for others."
THE BILLS
Lulu agreed to let the man pay one bill.
"He asked me to call my cell phone company," she said.
She did.
"And he got on the phone with them. He rattled off a list of numbers he had memorized," Lulu said.
And then it was done.
"He made a payment for $350," she said.
Lulu immediately called her cell phone provider, T-Mobile, back to confirm the payment. She said the representative told her a payment had been made. Her sister immediately received a text message indicating the same thing.
But, this mystery man with the money wasn't finished yet.
"He was like, 'You don't have a mortgage?'" Lulu said. "And then it dawned on me. I have a rental property."
So Lulu called Wells Fargo where she owed $45,000 on a small house in Roseland.
"They asked if he had authorization to interact with the representative for that call only," Lulu said. "So he knew very specific terms to ask or to say to the representative so that he could gain access to making payments on these accounts."
Once again, through follow-up phone calls and emails received from Wells Fargo, the $45,000 payment was confirmed. Still, Lulu found it hard to believe it really worked.
"I was completely floored," she said. "All I heard from the representative was, 'Oh my God, congratulations,' and I'm frozen in shock," as she realized this mystery man just paid off her only debt.
"I felt ecstatic. I felt happy. I felt hopeful," Lulu said.
She couldn't wait to tell her older sister Ibi Cole all about the unexpected windfall.
"You got scammed," is the response she got from Ibi.
Ibi said she did not believe it: "Surely in 24 hours the whole thing is gonna fall apart."
But the next day, Lulu called Wells Fargo again while Ibi listened.
"And they're telling her no, it's paid off. It's still there," Ibi said.
Lulu showed her sister documentation and online statements revealing the payments had been made and the balances reduced.
"I'm floored. I'm like, well, I guess I have to shut up. At that point I'm convinced." said Ibi.
Now convinced, she agreed to let Washington pay off her biggest bill. Ibi had a $150,000 mortgage on an Englewood two-flat.
That's when Ibi agreed to meet the generous stranger outside the Chase Bank also on 83rd Street. "He said hello. He said, call your bank. We don't have a lot of time."
So, she calls her lender, New Rez.
"Same thing -- one, two, three, four, he gets on the phone and says, 'I'm calling on behalf of CEDA and Chance the Rapper with a three on his hat. I'm here to pay this mortgage,' and the whole thing's on a recorded line," Ibi said. "That was another thing. I'm like, well certainly he wouldn't commit this type of fraud on a recorded line with a very powerful institution. He's going to get into so much trouble. He wouldn't do that."
But he did, and Washington made a $100,000 payment. Ibi said the whole interaction between Washington and New Rez was on speakerphone. She heard the whole thing.
"You're listening to the operator receive this information," she said. "You're listening to the operator later then say, 'Congratulations. We have accepted your payment of $100,000.' "
Just like Lulu, she received an email confirmation almost immediately afterward.
"So, oh my God. He says what else? What else can we pay off?" Ibi said. "Time is running out. I've got to get back to the office."
So called up two banks and another lender so he could make payments for two credit cards and a smaller mortgage. The same thing happened three more times. He made a payment, Ibi got a confirmation number.
THE BAIT
What made the sisters trust this stranger?
There were two things did, they said. First, Washington claimed he was affiliated with Chance the Rapper, and in Chicago, Chance's name is synonymous with charity.
FACT: Chance the Rapper is a multi-Grammy award winning performer.
FACT: Chance the Rapper runs Social Works, a charity devoted to empowering youth.
FACT: Chance the Rapper is a big supporter of social justice programs.
FACT: Chance the Rapper is a huge donor to Chicago Public Schools. In 2016, he gave the CPS Foundation a $1 million check.
"You hear all of these news stories about Chance the Rapper, giving insane amounts of money to help people," Ibi said.
So the sisters believed it made perfect sense Washington could be helping someone like Chance give away money.
However, neither Chance nor CEDA ever worked with Washington.
Harold Rice, the CEO of CEDA said: "We're not walking along the street, grabbing individuals … and saying: 'Hey, look, I'm a CEDA representative, I can hook you up.' No, no. We don't do that."
Even more convincing than the celebrity and nonprofit name drop was the response from every financial institution Washington supposedly paid.
"We got confirmations from every single banking institution," said Ibi.
Confirmations came through texts, emails, letters and/or online statements:
- Wells Fargo email: "Thanks for making a payment to your account ending in XXXX. Here are your payment details."
- New Rez email: "Your payment of $100,000 has posted." [put in bold by New Rez]
- Bank of America online statement: "PAY BY PHONE PAYMENT" [All capital letters by Bank of America]
- Chase online statement: "Payment Thank You Special"
- PHH Mortgage online statement: "Principal Only Payment Applied Jan 27, 2022"
- T-Mobile text: "thanks for your electronic payment of $350 to T-Mobile from bank account ****6666!. It was successfully authorized and processed on 1/25/22."
And, over the phone from representatives: "We called those four institutions and then we call both Chase and Bank of America for the credit cards," Ibi said. "There is no way I would have given him the time of the day if the banks had not confirmed so many times."
The CBS 2 Investigators took this case to Jack Gillis, the Executive Director of the Consumer Federation of America, an advocate for consumers.
"When you see 'posted,' you can legitimately assume that everything is kosher," he said. "This is the most clever scam that I've heard in a long time."
Gillis told CBS 2 what makes this one so different is that the fraudster "got the banks to participate in the scam unbeknownst to them."
By the companies sending the emails and their representatives verbally confirming the payments, they added legitimacy to the con.
"That's powerful," Gillis said. "That's why it's so diabolical."
THE SCAMMER'S REWARD
But it was more than just the confusing confirmation notices that helped the scammer ultimately reap his rewards.
Bank of America acknowledged that its standard operating procedure to actually apply the payment can take up to "two business days" to happen.
But for Ibi, that notification from Bank of America didn't show up on her online statement until four business days later.
During that gap, which was different for each company involved, Washington convinced the Cole sisters to pay the charity forward.
"He was like. 'Well, you know, if I do this for you, what will you give me?'" Lulu said. "Now, the bank has already confirmed that they've paid off almost $45,000 worth of debt for me. So, I'm like, 'I don't know, what do you want?'"
Lulu and Washington agreed on an amount.
"You're still kind of buzzing off on the high of, 'Oh my God, this is gone,'" Lulu said. "I walked into the bank and I pulled out $9,000 cash. Handed him the money and thanked him."
Her sister did the same thing. Only thing is, Ibi gave Washington much more.
"I went into the bank and I pulled out $27,500 in cash and gave it to this person," Ibi said. "There was no transfer of anything to this person until after we received confirmations, and that's really important."
THE REALITY
"It was day number four, business day number four. January 31. I got an email from my bank like 7:30 in the morning that said we couldn't process your payment," said Lulu.
"And then one by one by one by one, started getting messages, started getting emails," said Ibi. "Suddenly, we're getting a text message like, 'Oh, there's a problem with your payment please contact us.' And it was right at that moment where I knew it's over."
CFA's Jack Gillis told CBS 2 this shouldn't have happened to the Cole sisters.
"When most of us deposit checks, either in our accounts, or to pay off certain loans, we're notified that nothing is going to transpire until that check clears," he said.
Gillis looked over the initial confirmations the sisters received from the banks, lenders and T-Mobile and added: "They simply told these victims that everything was good; that they were paid off. So, there's no reason in the world for them to have doubted notices from an institution such as Wells Fargo, or New Rez."
The sisters lost more than just money. Remember their commitment to community?
"We were in the middle of building an afterschool community center. And the funds that I had set aside to build that community center. I'm no longer going to be able to build it," said Ibi.
THE SUSPECT
So, who is Jeffrey Washington, the man who convinced the Cole sisters to hand him $36,000 in cash?
Police sources tell the CBS 2 Investigators the mystery man's real name is not Jeffrey Washington. But they said the same man has used the same scam since 2014. He didn't start name dropping Chance the Rapper until 2018. He swindled eight other people out of money, from as little as $500 to as much as $8,600 each time.
That was all before the Coles got taken. And, since then, we've learned the man has scammed at least one other person out of $3,000. That happened in March, more than a month after the Cole sisters filed their police reports and a complaint with the Illinois Attorney General.
THE SOLUTION?
The Consumer Federation of America told the CBS 2 Investigators it is concerned about the inconsistent and confusing messaging surrounding initial confirmation notifications.
"What these banks communicated to these women indicated for all intents and purposes that this was a legitimate payoff," said Gillis. "Obviously, the bank discovered after some period of time, and New Rez discovered after some period of time was that there was no money in this bogus account."
So, what's the solution? The CFA is looking into urging banks to clarify the language on those first notices.
"The banks definitely bear some responsibility," Gillis said. "What the technical definition of posted versus pending is I don't know. But that needs to be pursued. If it's posted does that mean it's been verified and it's done?"
Gillis told us he's also interested in exploring the delay in officially confirming payments.
"The ineffective way the banks are processing these payments may have the biggest impact," he said.
The CFA told us it plans to tackle the issue of disclosure.
"Full transparency is our meat and potatoes. We work all the time to make things more transparent for consumers," Gillis said, "and this type of scam gives us the wherewithal to try and change public policy and try to get banks to be much more responsive."
CBS 2 also contacted U.S. Rep. Bill Foster (D-Illinois), who is a member of the House Financial Services Committee.
"The confirmation should be more clear. You shouldn't confirm payments that have not actually been made," he told us in a phone conversation. "For example, if the statement balance goes down to $0 when it is, in fact, the check has not cleared. That's just wrong. That's factually incorrect. And, there should be, if they're not going to clean up their act, there should be either state level standards or national standards to make sure that the consumer gets a correct impression of whether the payment's been made."
He continued: "I don't understand how T-Mobile can get a 'payment' from an account that does not exist. That is a mystery to me and I'm actually going to ask some of my staff to figure that out."
T-Mobile released this statement: "It's awful that a scammer took advantage of a customer in this way. We've provided support through our Care team and recommended that the customer to work directly with law enforcement. We encourage consumers to be cautious with engaging with unknown callers and unexpected messages. Customers can learn more on protecting themselves from scam calls and SMShing/phishing at https://www.t-mobile.com/privacy-center/education-and-resources/online-safety."
PHH Mortgage did not respond to our questions.
Full statements from the other banks and lenders are below:
New Rez:
"Thanks for reaching out.
"We are unable to comment on this. It is our policy and priority to protect our customers, and therefore we cannot disclose or discuss any customer information with outside parties."
Bank of America:
"It's unfortunate when people fall for scams like this. We provide information online about avoiding scams and do caution customers about accepting unsolicited offers of money, especially from people they don't know. As I mentioned, we can't share information about an individual account, but we do disclose that payments may take up to two days to post to an account. Customers see this information when they look at their account statement online. (You will see it on the attachment you shared.) We also disclose in our cardholder agreement that, if a payment is returned for any reason, the customer is responsible for the full amount. Below is the link to the information we provide on our Security Site alerting people to potential scams."
Wells Fargo:
"We were very sorry to hear about Ms. Aboyadecole's experience, and have reached out to her directly to review the situation and discuss her concerns.
"We never want to see anyone become the victim of a scam, and we are actively working to raise awareness of common scams to help prevent these incidents. As this matter demonstrates, everyone needs to be extremely careful about sharing their financial information or granting access to their mortgage or bank accounts to prevent scammers from taking advantage of them."
Chase:
"We're sorry to learn that Ms. Cole was the victim of a scam. We hope law enforcement can help recover her money.
"Our card payment process is designed to benefit the customer – we credit payments when we receive them. If the other bank later cancels the payment, we reverse the credit we gave our customer. We regularly remind all of our customers: know who you are getting money from and sending it to. We also tell them when something sounds too good to be true, it probably isn't true."
