Spotting a Scamcoin: Westland Storage
In this week’s edition of Spotting a Scamcoin, we cover the biggest crypto Ponzi to hit the markets since Bitconnect. The story of Westland Storage contains all the classic elements of a Ponzi: huge returns, an affiliate program, shady payout methods, dodgy customer service, and the grand finale of a sudden exit scam disappearance.
The premise of this particular Ponzi scheme: tokenization of real estate. Westland Storage claims that it is (was) a real estate investment platform through which investors can purchase individual square feet of real estate which is then rented or leased out. The profits from doing this are then returned to the investor at a rate of 1% of their total investment per day (later upped to 2%). Throughout its short-lived operation, the company always maintained its claim that profits are absolutely guaranteed to its investors and that there was no risk of any kind of loss whatsoever.
There had been several instances of such real estate tokenization scams already, the most famous of which was known as Richmond Berks, of which Westland Storage bore striking resemblances – most notably was the lucrative (yet unsustainable in practice) return on investment rate that lured many investors into it, and perhaps encouraged them to forget or ignore their better judgment. As we’ve covered extensively in previous Ponzi tales on this website, sometimes the promise of quick and easy profits has the ability to overwhelm the more critical senses, making some investors forget about trusting their inner voice or conducting thorough due diligence when it comes to finding a suitable investment.
The westlandstorage.com domain was initially registered in 2005, to a storage/moving company based out of Michigan, United States. In March 2018, the site changed servers, indicating a change in ownership, and by mid-April the platform was open for business. By June, the site was big enough to get noticed by Ponzi exposers, however, this did not stop thousands of people from pouring their money into it, whether it was through BTC, ETH, DASH, DOGE, XRP or even good ‘ol fashioned cash. Like was the case with Bitconnect that came to a grinding halt only a few months earlier, participants were just too caught up in the idea of fast, easy profits to consider the numerous things that could go wrong with their investment.
The original Westland Storage domain was for a Michigan-based storage business, which was purchased by the Ponzi scammers in early 2018. A listing for Westland Storage LTD was incorporated in the UK on February 1st, 2018. Westland Storage claims to have developed Diceland tokenization technology. According to a widely circulated description of the project, Diceland was going to be a major disruptor in the real estate industry:
“It’s simple math
DiceLandTM technology allows to equate 1 square foot of real estate to $1. In this way, the company’s customers can decide for themselves how many square feet they want to purchase.”
In theory, Diceland was supposed to be a streamlined way of investing that alleviates the middleman in real estate investing and allows for the tokenization of any real estate or building. However, there is no clear cut evidence that Diceland’s products ever actually existed. Neither was there any proof that Westland Storage actually owned any of the properties they claimed – kind of a big warning sign for any potential investors.
I went to London to find their office.
But they don’t have one. The local never heard of them and the address they provide is for a studio. #Keep_your_crypto_save
— The Crypto Detective ? (@BTCdetective) October 28, 2018
What’s worse: not only were their company headquarters founds to be fake (as confirmed by independent researchers), but their entire management team was found to be fake as well. They had simply used pictures of other people found on the internet and attached fake names to them. One person who was found to be real (though using a fake name for promotional purposes) was an English actor hired to be the “face” of the company.
Carl Owen – or known as “Matthew Boyd” in the role of CEO he played for Westland Storage – is listed on the talent showcase website Starnow, where he describes himself as an “Actor, Extra, Model,” among other entertainment-related professions. His video for the company hosted on the Starnow website has since been deleted, but it has been saved and propagated through other video hosting services of which neither he nor the real masterminds of Westland Storage have control. Using fake names and anonymous people to further a scam is a pretty commonplace tactic but hiring an actor/model with a public profile to do it for you is both brazen and novel.
The company also came bearing all the other hallmarks of a Ponzi scheme. In addition to offering a ludicrously high rate of return (1% at the beginning, upped to 2% as new membership started to dry up), Westland Storage also featured a comprehensive, multi-tiered affiliate program, meaning investors could get small cuts of the amounts deposited by future investors which they referred. And of course, no Ponzi advertisement would be complete without a dude standing next to an expensive car or yacht they had purchased using the proceeds from their investments.
On top of all of this, the site contained several spelling and grammatical errors that indicate a hasty development, a lack of thought or care about professionalism, and the likelihood that the scam had origins in a non-English speaking country (despite its status of being registered as a business in the UK). Also unsurprisingly, Westland Storage employed a bounty program in order to help promote their project:
SIGN UP EARN.
— Engr. Deodivine (@deodivine1) April 2, 2018
Interestingly, the WLS token probably never even existed. All bounty participants were paid in the form of the project’s token, which could only be traded on the Westland Storage website and could not be withdrawn. Also interestingly, a mobile app touted by the company was deemed to be “fake” by its own creators, though still left available for download from the Google Play store. One user recounted their experiences in dealing with the app and bounty program:
“Westland strorage (sp) is definitely a Scam
This company made a bounty for app downloading. In its website I found no app. So I visited google play store and found only one app name WESTLAND STORAGE. I attempted to log in by this app but fail.
One day later it sends me a message that they found a fake app in play store and advised not to download… They themselves uploaded this app and declare it fake to show that stealing my password scammers are continuously log in. This way they ban me from this site as I did not yet make any investment…
Now they are driving out non-investors, next they will ban people who made only one investment. They want to show that they ban only those who are inactive. But reality is when an unwanted person tries to log in, its says that log in a temporarily disabled. This way they make people inactive.”
According to those who were involved – some of whom invested considerably large sums of money – it took approximately 100 days to receive one’s entire capital back to them (100 days at 1% a day = 100%), meaning only those who got involved at the very beginning were likely to accrue any actual profits. For those who got in during the later stages of the scam, from August until the website went offline in November, there were no profits to be had.
To continue drumming up sensational promotions for their company, Westland Storage announced that they were raising money to purchase an island on which they would hold conferences. This was quickly exposed as a bogus claim as well, as the island itself was located and found to be not for sale. Nevertheless, Westland Storage claimed that they had raised over $37 million in order to fund it.
Soon after the fraudulence of their island purchase was brought to light, the development team stopped responding to their investors, leaving a lot of investors with coins trapped in their accounts, unable to withdraw them. For a brief period, investors were able to make what appeared to be withdrawals from the platform, but the transaction IDs provided were fake, sometimes nonsensical strings of letters and numbers, and could therefore not be found in any blockchain.
By November 26th, Westland Storage ceased payouts to their customers altogether, and their website went offline. Instagram, Facebook, YouTube and Twitter accounts were soon after deleted, as were promotional materials found on crypto-friendly blog-style websites like Steemit and Medium. The jig was up, and when all was said and done, at least 688 BTC, 9784 LTC, 66 million DOGE, as well as several thousand ETH, XRP, ETC, DASH and other coins (as well as hundreds of thousands of dollars in fiat currency) had been stolen, amounting to somewhere between $50 and $100 million. An estimated 10,000 investors had been suckered into the con, with probably only a handful of them (less than 100) accruing the actual profits Westland Storage had promised all along.
Most who got caught up in the Ponzi were only left with woeful stories to tell, such as this investor who experienced multiple problems throughout the course of their experience:
“I believed in this fairy tale after using the site for 7 month with nothing but good things to say. Sadly this turned into nightmare real fast ? First issue was someone hacked my account and only changed my withdraw addresses. I did not notice and kept withdrawing the profits to hackers addresses daily for 15 days! When I noticed I contacted support not even wanting what I sent to hackers back since I did not take time to double check I was receiving the deposits…
I have $1500 invested and it cost me way more cause I bought my crypto at all time highs 🙁 I did this pipe dream in hopes I could make some of my money back but instead I had the rest of it stolen with no ATH hopes ever again now 🙁 I figured this was just a fluke and would be fixed…
I am starting to believe WLS is the one who changed my addresses and locked me out when I found out. Please do not end up like me. The site offers way to many amazing deals to be true. They always have coupons for 10% bonus on deposits or other ways to lure you into depositing more coins. I should have known then but I wanted to be the person who does a review on how I bought a house investing into this. Big mistake.”
Though the perpetrators of the fraud have yet to be caught, there are active investigations stemming from multiple countries who have been provided with a large sum of evidence pointing to the actual identities of the suspects and the roles they played in the scam. Some investors have actually received thinly veiled death threats for their role in publicly exposing the scammers, adding a dark turn to the story’s closing chapter, but as a whole former investors who have been vocal in their dealings with Westland Storage remain optimistic that the crypto thieves will eventually be brought down.
For those who would like to file a complaint or lend evidence to investigations in hopes of bringing the thieves to justice, they are encouraged to file a report with Interpol. For those who want to contact others to find and share more information related to Westland Storage, there is a Telegram support group for victims they can join.