CHANDLER, Ariz. — Police have arrested two individuals this week for their alleged involvement in a phone scam that tried to swindle over $100,000 out of an 88-year-old Chandler man by persuading him to buy gold coins and deposit cash into bitcoin ATMs.

The man's son contacted the police on Oct. 5 after discovering that the father had possibly lost about $180,000 from an alleged scam, court records show. 

Two days earlier, the man noticed an alert on his computer that instructed him to call a phone number. He spoke to someone claiming to be an employee of Microsoft online services and was allegedly told that fraudulent activity had been detected in his Bank of America account.

The Chandler man was allegedly told to move his assets to a more "secure" location like a bitcoin ATM located inside a liquor store on Arizona Avenue, records show.

Scammers using cryptocurrency ATMs and QR codes to dupe money out of people has become increasingly prevalent in recent years, according to the FBI. It can be more difficult for law enforcement to recover funds exchanged through this type of transaction so the FBI advises citizens to be cautious of entities demanding cryptocurrency as payment.

The man in Chandler allegedly deposited about $60,000 into the bitcoin ATMs before he objected to the process and then was instructed to make alternative forms of payment. 

Records show the man placed $40,000 in a cardboard box and was told to give the box to a woman who later visited his neighborhood.

The following day, the man was contacted again and encouraged to buy up to $78,000 in gold from a local jewelry shop. After buying the gold coins, the Chandler man would get instructions on how to hand off the gold. 

After Chandler police were contacted, they decided to create a "bait package" containing a GPS device that would be delivered to the unknown person picking up the gold. 

On Oct. 9, the Chandler man was told to meet someone at a location and hand off the parcel. Undercover detectives then trailed the car that picked up the package and followed it to a local hotel, records show.

Police eventually conducted a traffic stop and detained two men. Court records identify the individuals as 24-year-old Jeet Panchal and 28-year-old Farhan Shaikh.

In an interview with police, Shaikh allegedly told investigators that Panchal had agreed to pay him $200 for a ride to Arizona. He denied having knowledge about the package picked up by the other suspect. 

Both men were booked into jail and are facing charges of theft and fraud. 

A list of common scams involving bitcoin ATMs can be found here.

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