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Sheriff’s detective warns of AI-enabled fraud, urges public to attend county ‘fraud school’
Summary
Winnebago County detective Lt. Mike Seelmo told the Judiciary and Public Safety Committee that AI-driven scams, deepfakes and cryptocurrency kiosks are scaling fraud and that the sheriff’s office has acquired tracing software and is expanding fraud-education sessions.
Lieutenant Mike Seelmo, who supervises the detective division’s special victims and fraud work, told the Winnebago County Judiciary and Public Safety Committee on April 6 that fraudsters are increasingly using artificial intelligence and cryptocurrency to target residents.
"Fraud is no longer just in all scams ... it's technology driven and it's scaling quickly," Seelmo said, arguing AI tools make scams more believable and allow fraudsters to reach thousands of victims at once. He described deepfake voices and AI-personalized phishing as new mechanisms that can trick people of any age.
Seelmo described a string of fraud patterns the sheriff’s office is seeing locally and statewide — spoofed calls purporting to be the IRS or other agencies, identity-theft-driven student loans, romance scams that target older adults, sextortion and synthetic identities — and the rapid use of cryptocurrency kiosks to launder proceeds.
"About 90% of all transactions out of these machines is fraud," Seelmo said, arguing that crypto kiosks make recovery difficult because funds quickly move through multiple wallets. He told the committee the office recently acquired TRM tracing software to identify and, where possible, freeze suspect wallets and recover funds for victims.
Seelmo said the sheriff’s office is using signage at kiosk locations and outreach to clerks to interrupt transactions and has started fraud-education sessions, called "fraud school," to help residents recognize scams and take immediate steps after a victimization. He urged simple consumer protections: pause before acting, verify the caller by looking up an official number, and never send money under pressure.
On legislative remedies, Seelmo said state bills due for signature would impose consumer protections and transaction limits on crypto kiosks, including a daily limit and receipt and identification requirements intended to give law enforcement a better chance to intervene.
The committee and members of the public asked whether the kiosks could be banned at the county level; presenters said municipal regulation is the common avenue but described the current state-level work as a significant step. Seelmo said the sheriff’s office would continue outreach and training and expand fraud-school dates if demand warrants.
The sheriff’s office distributed flyers about a fraud-school session scheduled for the next day and summarized three years of high-value fraud investigations, including a multi-case crypto fraud the office said involved about $6,000,000 in alleged losses.
