Kindahl Larson, Chief Compliance Officer, MN of Veteran's Affairs

Host Bill Raker speaks with Kindahl Larson, the Chief Compliance Officer of Minnesota Veterans Affairs. 

•  Operation Shamrock | Educate - Mobilize - Disrupt Cyber Scams - https://www.operationshamrock.org/
• Minnesota Elder Justice Center | 651-440-9300
• Get assistance from AARP Fraud Watch Network at 877-908-3360
• Report fraud and scams to local law enforcement
• Report fraud and scams to MN Dept. of Commerce 800-657-3602 

Transcript

SPEAKER_01 0:18

Welcome to Access to Democracy. We're delighted that you're joining us. I'm your host for this edition of the program. I'm Bill Raker. I'd like to say thank you to our sponsors, the benefactors that helped make this program possible. ReCalibra Health, 45th Parallel Distillery, Sheridan and Dulas Law Firm, and True Stone Financial Credit Union. Today on Access to Democracy, we're going to be talking about the reality of cybercrime and crypto fraud in Minnesota and what can be done about it. And to hear here with us, to talk with us about that very important topic is our guest today, Kendall Larson. Kendall, welcome to Access to Democracy. Thank you for joining us.

SPEAKER_02 1:03

Thank you.

SPEAKER_01 1:04

So your work right now is with the Department of Veteran Affairs. Is that that correct?

SPEAKER_02 1:11

So I'm a state employee. I work for the Minnesota Department of Veteran Affairs as their chief compliance officer.

SPEAKER_01 1:17

Excellent for setting that up for us. We'd like to have our viewers meet you and learn a little bit more about you. So before we get into this very complex and frustrating topic, actually, tell us a little bit about your background. What brought you to the career that you have today and what it is that you're doing?

SPEAKER_02 1:37

Yeah. So in college I studied poly political science and psychology and then was deployed immediately right after college and did a 12-year or 12-month deployment in Operation Iraqi Freedom. And then coming back, I decided to go to law school and I got my law degree. In my time in the military, I spent 22 years. I did about 11 years as a finance specialist and a finance in the finance personnel. And then I did another 11 years as an officer doing signal operations, radios, and computers. After law school, or after retiring from the military, I took a job with the state. So I was an attorney for the general counsel's office for the Department, the Minnesota Department of Veteran Affairs. And when the position for chief compliance officer came open, I applied because in my experience, I have a bit of experience in finance. I have a bit of experience in IT. I have a legal background, and then I did work for a risk for risk management for a little bit doing disaster recovery and disaster recovery plans. So then I decided to combine all of my experience into one and go into compliance.

SPEAKER_01 3:01

Well, it sounds like you have a lot of the really important ingredients that would go into a role that is responsible for compliance.

SPEAKER_02 3:09

Yeah.

SPEAKER_01 3:10

How long have you been doing this type of work for the state of Minnesota?

SPEAKER_02 3:14

So I um have completed about a year and a half in the chief compliance officer role.

SPEAKER_01 3:20

And tell us a little bit more about what that entails. What's an average day or week in your life?

SPEAKER_02 3:27

Right. So I have one employee, he's an auditor, and we uh we work to um evaluate the programs within the Minnesota Department of Veteran Affairs to establish transparency, um, to prevent, uh, uncover, prevent fraud, waste, and abuse, and to improve um our standing within as as a government agency to show that we are doing the right thing with uh and and being responsible with government funds.

SPEAKER_01 3:59

So we know the scammers, the fraudsters are everywhere, and everybody really is a potential target for them, right?

SPEAKER_02 4:06

Yeah.

SPEAKER_01 4:07

So just how how many people do you think are victims of the kinds of fraud that you're trying to protect them from?

SPEAKER_02 4:17

Oh, um, yes. So with Operation Shamrock, um, I uh because I am the Chief Compliance Officer with the Department of Veteran Affairs, um I went to a fraud conference. And that was where I saw Erin West give a presentation. Her presentation uh was about statistics of the amount of money that's being lost, statistics about the victims. She talked about the the crime that is being committed, not only against the victim who's losing money, but also the human trafficking that's going on. Um and so um when I was exposed to that, I've been looking for a I've been looking for a an opportunity to um connect with my community. And um I saw the I saw this as something that I could do to bring light to a very real, very dangerous crime that is um happening kind of underneath all of the the focus of of um of our society.

SPEAKER_01 5:19

So you're talking about Shamrock.

SPEAKER_02 5:21

Yes, I'm talking about Operation Shamrock.

SPEAKER_01 5:23

Yeah, tell us a little bit more about that. How how did it get started and what's its objective and and how do you use the the tools and the information that comes available through this Operation Shamrock?

SPEAKER_02 5:36

Yeah, so um it was started by a woman named Erin West. Um, and after 26 years of prosecution work in California, she um in the last couple of years she realized that there was a lot of white-collar crime going on. Um, but unfortunately it was uh they were issues that could not be resolved by her office. So once she retired, she decided to dig deeper into this um into this problem. Um and so she traveled to some of these uh countries that have been accused of harboring um scammer, scammer organizations, um, and really tried to do um some investigative journalists. She actually brought journalists with her, um, and she looked at these compounds um that have been being run where the scammer, this the scams are being operated out of. Um and so then she founded Operation Shamrock to um to address this issue. So so the goal of Operation Shamrock is to educate the population about cyber uh cybercrime and cryptocurrency crime, um, to work with law enforcement and um and legislatures to uh if put in effect and and prevent this crime and or prosecute this crime, and then ultimately to to work with um businesses to um to help uh disrupt the ability for scammers to operate.

SPEAKER_01 7:00

So Shamrock is is a national endeavor, right? To to provide information to warn people about what to be alert for, what to watch for, to try to not become a victim of a scam. That is correct. So you mentioned some of these compounds uh where the the scammers were. Can you talk a little bit more about that? I mean, I've I know they've been in Laos and Cambodia. How do they operate?

SPEAKER_02 7:26

And the Philippines.

SPEAKER_01 7:27

In the Philippines.

SPEAKER_02 7:28

Um so essentially what they do is um they lure in victims who are looking to get a job or looking to get a better job. Um and these they they operate in um countries that have really lax law enforcement and and weak governments. Um they lure these people in and then they imprison them in a compound that is a humongous concrete building surrounded by barbed wire, um, and then force them to work uh scamming the world. I mean, it's not just the United States, it's the world. Um, and so these these victims then are human trafficked, they must perform these scams. They're uh the safety of themselves and their loved ones uh depends on how much money they bring in.

SPEAKER_01 8:13

So they're they're prisoners, they're they're slaves to whoever is operating this uh underground illegal operation, right?

SPEAKER_02 8:23

Yes. So I mean we're talking criminal syndicates, we're talking mass um organized crime are doing this.

SPEAKER_01 8:30

Um, do do they these compounds uh specialize in particular types of scams or frauds?

SPEAKER_02 8:37

Not that we can tell. So in essence, they have multiple manners in which they can defraud and scam somebody. They have a playbook, um, and so their interaction with you depends on whether they uh depends on who you are and what information that they can gather through social engineering. Um, when during my my presentations, I talk about the five top used scams, um, and I really focus on um what Operation Shamrock is is trying to put forth that like there are scams out there where you don't, you as the individual don't have a lot of control over business, email compromise, things where a hacker has hacked into your um your stuff or your account, right? But then there's other ones where they use psychological tactics in order to trick the individual into giving their money to something that they both they truly believe is real and it's not. And we focus on those scams. So the scams that I cover are investment scams, they were formerly known as pig butchering scams, um, romance scams, um uh and then um fishing scams. We talk about uh uh employment scams. Um, and I find employment scams pretty nefarious because these are people who are searching for a job. Um they want to make money and they're losing money as a result of trying to make money or they're being scammed and their uh their information, their per very personal and private information is being um taken from them because they're looking for a job. And then um the the phishing emails, which everyone knows what a phishing email is by now because they are so prevalent.

SPEAKER_01 10:18

Well, this may be the the point where we talk about how prevalent scamming is here. I think you have some statistics about Minnesota, right?

SPEAKER_02 10:26

I do.

SPEAKER_01 10:27

So we'll bring up the graphic, which is is an illustration of how prevalent this is, and you can tell us what this graphic is all about.

SPEAKER_02 10:35

Yes. So um when I perform my uh presentations, um I talk about uh how much money is lost and the statistics. All my statistics come from the IC3 uh government database, which um the Internet Crime Complaint Center is a section of the FBI that receives crime complaints. Um, they consolidate everything and put out a report each year. Um I use that report in order to validate the statistics in my presentation when I'm talking about it. And so um the graph that you are seeing now is the consolidated information from the IC3 government data report. Um and as you can see, um it the um it shows that we are losing millions, hundreds of millions of dollars each year. So um just to identify a few, um the entirety of cybercrime for 2025, Minnesota lost 248 million dollars, and that's only the reported number. Sure. Um and so people aren't always willing to report because um they are embarrassed about being duped. Um but we had 13, we were we have 13,000 Minnesotans report losing 248 million dollars. Our elderly population lost $111 million, and it was it affected 200, um 2,500 Minnesotans over the age of 60. And then our crypto fraud, which is something that I focus on during my presentations. Um, 1,800 Minnesotans lost $91 million in 2025 alone.

SPEAKER_01 12:06

Those are shocking numbers. You know, we we talk about the victim of a scam losing their money to the scammer, but actually their money was stolen.

SPEAKER_02 12:16

Correct.

SPEAKER_01 12:17

You know, they they didn't lose the money by dropping it or or misplacing it or something, it was stolen by a criminal.

SPEAKER_02 12:24

Correct.

SPEAKER_01 12:25

And those numbers are like we said, they're they're just shocking. So thank you for sharing with that and give uh giving us an idea of how big this this scamming business is. We'd like to take a short break for a message from our sponsors, and we'll be right back with Access to Democracy.

SPEAKER_00 12:45

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SPEAKER_01 14:28

Welcome back to Access to Democracy. Our guest today is Kendall Larson. I'm your host, Bill Raker, and we're talking about the nefarious affairs of scammers and fraudsters, particularly here in Minnesota. So Kendall, let's get back to some of the work that you are actually doing in this area. We have the contact information for you on our screen for our viewers if they're interested in contacting you. I know you can go out and put on programs for different organizations. Tell us how you do that.

SPEAKER_02 15:00

Yes, so I want to clarify if you are a victim of a scam, there are many resources that you should contact, and I am not one of them. I am not an expert. I am merely a voice. I'm a voice to bring light to this horrible type of crime. When I am asked to do a presentation, and I've done presentations mostly for senior centers, and I thoroughly enjoy it, I present on the uh five the top five scams that are currently being perpetrated on Minnesotans, and I talk about the statistics of the loss that we are experiencing. I talk about resources. When I'm talking about the scams, I'm telling people what they're going to see and how they can identify a scam.

SPEAKER_01 15:44

How the scammer works.

SPEAKER_02 15:45

Correct. Then I also have a list of resources. I am not the only one out there talking about scams. Um AARP constantly does presentations on scams. Um the uh the Commerce Department for the state of Minnesota has a place where you can report a scam. The um attorney general has a fund that can help people who have been scammed. So there are so many resources out there. Um, and I bring that information when I come and do a presentation.

SPEAKER_01 16:15

So I I'm glad you clarified that you're not the contact if someone has been a victim of a scam or they think they're in the process of being a victim of the scam, they really should contact the Department of Commerce or the Attorney General's office here in Minnesota. Is that right?

SPEAKER_02 16:31

They can. They can file a report. Um they could also file a report with the police.

SPEAKER_01 16:35

Their local police department.

SPEAKER_02 16:36

Their local police department there. Um there are many uh local police departments that have um that have units that are working on um computer-driven crimes. Um they can contact the FBI. The uh the IC3 directly is an organization that um that can accept these uh these complaints. Um the FBI has worked to get transnational agreements. So, in essence, if you report a crime to the FBI, if you have enough information, they can they can freeze accounts and stop the movement of assets uh throughout the world, um, especially if they have these transnational agreements. So I don't know if you recall, but India used to be a place that was um that was blamed for a lot of scams. Well, India and the United States have a transnational agreement, and um India will shut down um uh bank accounts and freeze assets when the FBI reaches out to them.

SPEAKER_01 17:34

Uh we hear that scammers like to be paid. Yes, if that's the right word to use for the criminal uh with a gift card or cryptocurrency. How tell us about cryptocurrency? And I know something significant just happened here in the uh state legislature here in Minnesota about cryptocurrency kiosks. Tell us a little bit about that.

SPEAKER_02 17:58

Huge success. Um, so it the cryptocurrency is a um is a currency that does not have a physical mana uh a physical aspect to it and it's not connected to any central banks. Um and as I point out in my presentations, things can be really good and done for a really good reason, but then they can be used to harm people. And so, in essence, cryptocurrency has been used by scammers to move large amounts of money and steal money from people because it is uh nearly irrevocable and nearly untraceable. So um, so the state of Minnesota saw the danger, um, and the danger really is to the elderly population who don't understand what a cryptocurrency and they don't they don't completely understand all of the um aspects that go into it and how irreplaceable it is. Um, and so they have uh voted to remove all cryptocurrency ATMs um that have been in place.

SPEAKER_01 18:54

And there were some 400 of them here in the state of Minnesota. Correct. Yeah, so as of August 1st, I believe they have to all be gone or deactivated. Is that right?

SPEAKER_02 19:04

Yes. Yeah. So that's a huge win.

unknown 19:06

Yeah.

SPEAKER_02 19:06

Um, but there's still more work to do. Um one of the aspects of Operation Shamrock is that um that Erin West and her team. Um so so to clarify, I am a volunteer. I go out and I do research and then I perform um presentations to bring light to what is happening to help um individuals identify a scam when they when it is being perpetrated on them so that they uh they can avoid becoming a victim. Erin is testifying in legislatures. She's going all over the country giving large-scale presentations uh to law enforcement, partnering with law enforcement, partnering with the banking industry, partnering with calling out businesses like cell phone companies and telling them, hey, what can you do to protect us better? Um and so there's still more work in Minnesota that we need to do, which would be, hey, what uh authority does the attorney general have to go and recover money? So in the state of California, they have a very limited ability to recover that money. Um so essentially the way that Aaron explained it, and I'm sure that um there's more a more technical aspect to it, but um, if she if there is money stolen and they identify the bank account that it's being held in, um, that they can recover only that money. But let's say there was other stolen money in that bank account, they cannot recover it. And so they are limited only to recover the money that's been identified. Right? So, what is the state of Minnesota doing to recover this money? Um, and that's the question, and and that's what needs to be um addressed in the legislature, and and there's like bigger conversations, bigger than what I'm doing. I I am, like I said, a voice. I'm talking about this, I'm bringing light to it, um, one speech at a time, one presentation at a time.

SPEAKER_01 20:52

So when you're out making these presentations, doing uh all kinds of good work to make people aware of the scams, how they work, and what to do to avoid becoming a victim. What are some of the key things that you you suggest or you recommend to your audiences about how to stay safe?

SPEAKER_02 21:10

Yes, thank you. Um that is my favorite question. And it's also the question of the hour, right? Um, so in essence, the the way that the scammer is going to contact you, especially with these scams, that they're looking to um they're they're looking to use social engineering and other deceptive practices to get you to give them money because you believe something that is an untrue. They're gonna talk contact you um through messaging and uh messaging platforms like um Facebook, um Signal, Wire, Snapchat, those kind of things. But it's gonna be kind of a cold uh text message. It's gonna say, hey Fanny, um it was great to see you yesterday, let's go out again. And um, we being the nice people that we are, we're gonna write back, say, not Fanny, and then they're gonna be like, so sorry, very sorry. Your and Fanny's number are one digit apart. My name's Miranda. What's yours? And the goal is to keep you talking. The goal is to keep you engaging with them. The social engineering, they're trying to figure out who you are, what drives you so that they can invent a fake persona to then entice you to either invest in them or to fall in love with them or to get a job from them. You know, so so they're going to take the steps to invest in you so that you feel that they are a real person. Loneliness, the World Trade, the World Health Organization has declared loneliness as an epidemic. And these scammers are taking advantage of that, right? And so my recommendations are radio silence. Even if you know it's a scam, do not respond. Because do you know what they know if you respond and say, hey, not Fanny, that there's a warm body on the other end of that email.

SPEAKER_01 23:03

That's right, that's right.

SPEAKER_02 23:05

Um and or or phone number. So radio silence. Put in place some safety so they can't even get to the people that you value. So you we've all heard about the uh grandma scam where they call up somebody and they're like, Oh, I'm I'm in uh a prison and you need to pay $20,000 to get me out. Um, so so then um let's let's use a safe word. Okay, grandson, I'm I'm so sorry, you must be so scared. Um, I'll wire you the $20,000. What's my safe word? Okay, a scammer's not gonna know that, but that but that scammer is going to have captured the voice of your grandchild, and it's really gonna sound like your grandchild. Um, I think it only takes about three seconds to capture somebody's voice and then replicate it.

SPEAKER_01 23:51

And we're talking about the use of artificial intelligence in scams, yes. Right? That's what that's all about. That's a great tool for the scammers. I mean, you know, artificial intelligence can produce a lot of good things for us, but it has a dark side as well.

SPEAKER_02 24:04

Correct.

SPEAKER_01 24:04

And the the safe word, the family safe word, is is a word that every family, where there's grandparents and children involved, should have a safe word that only the members of that family would know. That's one of the great suggestions that you make, right?

SPEAKER_02 24:18

Yes, so so then um the so you get to a point where like the scammer isn't the scam isn't going to continue because the scammer isn't going to know the family safe word. Um, and so um, and then the last thing is um they are targeting our children. They are using um a lot of social engineering, they're befriending a circle of friends within Facebook. Uh they'll pick a target. Like um one of the ESP, the ESPN that uh just did an article about this. They'll pick a target. Um, high school male athletes, though those are um kind of like the target right now, um probably because they're they're just out there, right? They're they're out there, they're on Facebook, they go to tournaments, there's um there's a lot of uh publicity there. So they'll pick one and then they'll work to get friends around that person. Um, and then uh when they go to friend that individual that they've chosen as their victim, the uh they'll send a friend request and the the guy will look at his face and be like, oh, I've got nine friends with this person. I must have met them at a basketball tournament. So they'll befriend them. And then the scam starts. And they start small by just you know saying hi, how are you doing? Um uh it was great to see you uh last night at the basketball tournament because these scammers know a lot more about us than we know about them. Um they use social engineering to pick up uh to to review our um Facebook, uh, to review uh all of our communications, anything that's out in the internet that they are looking at. So now you've got your victim, they've befriended you, and they're going to fo uh they're going to continue to talk to this victim until they get the victim to send them a compromising photo or tell them something compromising. Um and so, and once they've got that information, then they extort the child for money. Um, and and and there have been some very serious cases where people have taken their own lives as a result of not being able to pay or not being able to face the fact that they had sent in a compromising photo. And with AI, as you just said, it doesn't even have to be a compromising photo. It could just be a photo that then is photoshopped to something that looks very compromising. And and so then you have a child that is going through something very horrible. So, my last piece of advice is parents, talk to your kids about internet safety. Ensure that they are not communicating with people that they shouldn't be communicating with.

SPEAKER_01 26:50

Right. So, you know, to kind of net down your message here is what you're saying is that be very careful what you put out on Facebook or any social media platform.

SPEAKER_02 26:59

Yes.

SPEAKER_01 26:59

Because the trollers, the scammers are out there, they're looking for some piece of information or all the information they can get about you to put it together to create a profile to know how to get to you. Yes.

SPEAKER_02 27:13

And all of it will be fake. It will be fake. None of it is real. So, um, in essence, you may have somebody in your life who absolutely is going to marry Keanu Reeves. They just have to pay his $50,000 hospital bills, and they say that you are against them, that you uh are the person that is trying to prevent them from marrying Keanu Reeves. That is the time, that is the time to step up and get somebody else involved. Um, we have the senior fraud ombuds uh person and her team. They are wonderful. Um, sometimes even having a police officer come to that person and talk to them about we've had some scams recently. Are you gonna marry Kiana Reeves? Um, and I say Kiana Reeves because Keanu Reeves is the number one celebrity that is impersonated. Um and and there it's so bad that there's a book out there by Becky Holmes. Um, and so that is actually one that I forgot to mention. Um, one of the the third largest scam that is being perpetrated on Minnesotans is uh impersonations. So impersonation is a tactic that is used by the scammers, but it is also a type of scam, and that is a type of scam in which um the scammer impersonates authority. It could be your bank, it could be the police officers, it could be the FBI.

unknown 28:31

Go ahead.

SPEAKER_01 28:32

Kendall, there is so much to talk about on this topic, and we wish we had more time. Uh sorry to have to interrupt the message that you were giving, but we've come to the end of this particular program. But if any of our viewers would like to have you come make a presentation on this subject to any of their organizations, their senior living facility, the contact information is on the webpage and is on our screen. Thank you all for joining us on Access to Democracy. Thank you for being our guest, Kendall Larson.

SPEAKER_02 29:00

Thank you for having me.