N.C. Justice Officials Brief State Crime Commission on Rising Fraud and Sextortion Reports, Citing $432 Million in 2025 Internet-Crime Losses
State Department of Justice staff told the Governor's Crime Commission on Sept. 3 that fraud, extortion and sextortion complaints in North Carolina have climbed, drawing on SBI, FBI and FTC data that measures reports rather than confirmed crimes.
$432 Million, Two Numbers That Won't Agree
On Sept. 3, 2026, staff from the North Carolina Department of Justice walked into the state's Governor's Crime Commission and put up a number: $432 million. That's what North Carolinians told the FBI they lost to internet crime in 2025, a 372% jump since 2021[1][2]. It's the kind of figure built to make a room sit up.
But the number carries a hidden asterisk. It doesn't count crimes. It counts complaints — people who sat down at a website called IC3 and filled out a form[3]. Whether the underlying crime grew by 372%, or just the willingness to report it did, is a question the number itself cannot answer. Both readings fit the same chart.
That gap between what a statistic measures and what people assume it means is the real story here. Everyone in this fight — state prosecutors, federal agencies, tech companies, lawmakers, victims — agrees fraud and sextortion are a growing problem. Where they split is over what the rising report count proves, and who should have to fix it.
What the Briefing Actually Said
The presentation came from the state's Department of Justice and the State Bureau of Investigation, and it leaned on three sources: the SBI's own case data, the FBI's IC3 portal, and the Federal Trade Commission[1]. Between 2020 and 2024, the presenters said, fraud cases in North Carolina rose more than 10% and extortion cases rose 108%[1]. Then came the headline figure, the $432 million reported lost to internet crime in 2025 alone[1].
Nationally, the same FBI system that produced that number logged more than 75,000 sextortion complaints in 2025. More than 5,700 of those involved minors and got referred to the National Center for Missing & Exploited Children[3]. That referral count isn't a survey estimate — it's a count of identified children, which makes it the hardest piece of evidence in the whole briefing.
The FTC added its own data point: Americans reported losing $3.5 billion to imposter scams in 2025, the top fraud category for a fifth year running[4]. And IC3's own national tally, released separately, put total 2025 losses above $20 billion, up about 26% from 2024[3][12]. Nobody at any level disputes that these numbers are large or that the money is, in practice, gone for good.
Why a Rising Number Doesn't Settle Anything
Here's the mechanism that makes this dispute possible: IC3 and the FTC's complaint system, called Consumer Sentinel, only count people who actually filed a report[3][4]. They don't survey households to estimate how much fraud really happened, the way, say, a crime victimization survey does. So the count moves for reasons that have nothing to do with crime itself — a bank tells its customers to file, an agency runs an awareness campaign, a news story sends people to the website.
That's not a flaw hidden from the agencies. The FBI and FTC say outright that most fraud never gets reported at all, which is exactly why they want more people filing[3]. That creates an odd loop: the same agencies whose mission is to raise the report count also cite the rising report count as proof the problem is getting worse. Both statements can be true and sincere at once.
Skeptics of that reading — including industry groups fighting new state technology rules — point out that new categories and better outreach can inflate the numbers even if the underlying crime rate is flat. Neither side thinks the reports are fake or made up. The disagreement is about what portion of the increase is more crime and what portion is more paperwork, and the data as collected can't split that apart.
The Cost of Faking a Voice Has Collapsed
Underneath the numbers sits a mechanical shift that both sides actually agree on. A convincing scam used to require a fluent speaker and hours of work building trust. Now a cloned voice or a fake nude image takes minutes to generate and costs almost nothing[6]. When the cost per attempt drops that far, the volume of attempts goes up — that's just supply and demand for crime.
North Carolina's Attorney General, Jeff Jackson, has used that mechanism as the basis for a bigger argument about who should regulate artificial intelligence tools. His office has joined bipartisan coalitions of state attorneys general pushing back on federal efforts to override state AI laws[5]. His case: states have always policed consumer fraud, and if the federal government blocks new state AI rules without offering anything in their place, that policing tool disappears.
There's also a jurisdiction problem baked into all of this. Much of the money that gets stolen leaves the country within hours, often landing with operators in Myanmar, Cambodia, or West Africa[10][11][13]. A state attorney general has no reach there. That reality pushes state enforcement toward the parties it actually can reach — the platforms and AI companies operating inside U.S. borders — regardless of anyone's politics.
The Other Side of the Argument: Who Actually Gets Sued
The tech industry and preemption advocates don't dispute that the harm is real. Their argument is about which government should set the rules, and who ends up holding the liability. Fraud is already illegal in all 50 states, they note, and the people committing it are mostly overseas and out of reach — so a new state AI law mostly lands on legal, U.S.-based developers rather than on the scammers themselves.
Their practical complaint is about patchwork: if 50 states each write their own AI rules with their own definitions, a nationwide product has to comply with whichever state wrote the strictest one. That state's legislature effectively becomes the regulator for the whole country. A December 2025 executive order responded to that complaint directly, creating a Department of Justice task force able to sue over state AI statutes in federal court starting Jan. 10, 2026[7].
North Carolina has, in the meantime, kept writing exactly the kind of law that task force exists to challenge. State Sen. Amy Galey has pushed a bill creating a distinct "sexual extortion" crime covering both real and AI-generated images[8]. A separate measure, House Bill 934, would make distributing a deepfake to harass, extort, or threaten someone a misdemeanor, with courts able to order the image destroyed[9]. Some free-speech advocates warn that a broad definition of "deepfake" risks sweeping in parody or political speech along with the harmful material.
What the Headlines Left Out
Coverage of the briefing split along familiar lines. WRAL's local report attributed the numbers carefully to the DOJ, but repeated the 108% extortion increase and the 372% loss jump without flagging that both are counts of filed reports, not confirmed crimes — the percentage did the persuading on its own[1]. CyberScoop's trade coverage of the national IC3 report showed the same pattern, letting "losses" quietly stand in for "reported losses" a few paragraphs down[3][12].
Coverage outside the U.S. told a different version of the same story. Africanews's report on Operation Red Card 2.0 — a crackdown that led to more than 650 arrests across 16 African countries and recovered over $4.3 million — framed the operation as an African law-enforcement success with African victims, not as a story about protecting Americans[10]. That's a real corrective to the shorthand that treats these schemes as simply "Nigerian scams," even as it also serves the outlet's own national interest in the story.
Two Nigerian nationals were extradited to the United States this year over a sextortion scheme that included North Carolina victims, both arrested back in 2023[1]. A separate INTERPOL effort, Operation Jackal IV, ran from November 2025 to June 2026 and produced 58 arrests across 22 countries when results were announced Aug. 25, 2026, including a 196-person Argentine network built around crime-as-a-service infrastructure[11]. One outlet's headline on that operation said the network "fuels" sextortion of minors — a word doing more editorial work than an arrest count usually calls for.
What Happens Next Is Still a Question
None of the state's new legislation has been tested in court yet, and neither has the federal task force's authority to strike it down. Both were built to collide with each other, and as of this briefing, the collision hasn't happened. Meanwhile the $432 million reported lost in North Carolina in 2025 mostly isn't coming back, whatever the courts eventually decide about who gets to write the rules that might have stopped it[1].
Summary
On Sept. 3, 2026, staff and investigators from the North Carolina Department of Justice briefed the Governor's Crime Commission at its quarterly meeting[1][2]. Their message: reports of fraud, extortion and sextortion in the state are climbing, and technology — including AI tools — is making the schemes easier to run. The presenters drew on data from the State Bureau of Investigation, the FBI and the Federal Trade Commission[1].
The headline number was a state one. In 2025, North Carolina residents reported a record $432 million in losses through the FBI's Internet Crime Complaint Center, known as IC3 — a 372% increase since 2021, according to the briefing[1]. IC3 is a public web portal where anyone can file a complaint. That matters: the figure is what victims said they lost, not an audited total, and it counts only people who filed. The FBI itself says most fraud is never reported at all[3].
That caveat is the core of the genuine dispute. Nobody argues the reports are fake. The argument is over what rising reports prove. Officials say the trend line is real and getting worse. Skeptics — including industry groups fighting new state AI rules — note that complaint counts also rise when agencies advertise the portal, when banks push customers to file, and when new categories get added. So a jump in reports can mean more crime, more reporting, or both.
Sitting underneath the briefing is a live legal fight. North Carolina Attorney General Jeff Jackson has joined bipartisan coalitions opposing federal efforts to block state AI laws[5]. A December 2025 executive order set up a DOJ AI Litigation Task Force to challenge state AI statutes in federal court starting Jan. 10, 2026[7]. North Carolina has been writing exactly those kinds of laws, including a deepfake crime and a proposed 'sexual extortion' offense covering AI-generated images[8][9].
The Event
On Sept. 3, 2026, the North Carolina Governor's Crime Commission held its quarterly meeting[2]. Representatives of the state Department of Justice presented to state leaders on fraud, extortion and sextortion trends, citing data from the SBI, the FBI and the FTC[1]. The presenters said cases of fraud, embezzlement and extortion all rose in North Carolina between 2020 and 2024, with fraud up more than 10% and extortion up 108% over that four-year window[1]. They also cited a record $432 million in internet-crime losses reported by North Carolina residents to the FBI in 2025[1].
Undisputed Facts
- The Governor's Crime Commission, which sits within the N.C. Department of Public Safety, met on Sept. 3, 2026, and N.C. Department of Justice staff presented on fraud and extortion trends[1][2].
- The presenters cited three data sources: the State Bureau of Investigation, the FBI and the Federal Trade Commission[1].
- Per the briefing, North Carolinians reported a record $432 million in internet-crime losses to the FBI's IC3 portal in 2025, up 372% since 2021[1].
- Nationally, the FBI's IC3 received more than 75,000 sextortion submissions in 2025 and referred more than 5,700 involving minors to the National Center for Missing & Exploited Children[3].
- Nationally, IC3 reported total 2025 losses above $20 billion, a roughly 26% increase over 2024[3][12].
- The FTC reported that people lost $3.5 billion to imposter scams in 2025, the most-reported fraud category for a fifth straight year[4][14].
- Two Nigerian nationals were extradited to the United States over a sextortion scheme targeting children that included North Carolina victims; both were arrested in 2023[1].
- A December 2025 executive order created a DOJ AI Litigation Task Force to challenge state AI laws in federal court beginning Jan. 10, 2026[7].
- N.C. Attorney General Jeff Jackson has led or joined bipartisan multistate coalitions opposing federal preemption of state AI protections[5].
The Pressure
Strip away the moralizing and blame. What structural realities persist regardless of which narrative wins?
- Complaint data is demand-driven
- IC3 and the FTC's Consumer Sentinel count filings, not incidents[3][4]. Every public-awareness campaign, bank prompt and news story raises the count. So agencies that want more reporting will always be able to cite rising reports — the metric and the mission point the same way. This does not make the trend false; it means the trend cannot be read straight off the chart.
- Cost collapse on the attacker side
- Voice cloning and synthetic imagery cut the labor cost of a convincing approach to near zero. Volume crime follows cheap tooling. This is the mechanism both sides actually agree on; they disagree only on who should bear the cost of stopping it.
- Jurisdiction mismatch
- Most of the money leaves the country within hours, and many operators sit in Myanmar, Cambodia or West Africa[10][11][13]. A state attorney general cannot reach them. That structural fact pushes state enforcement toward the parties it can reach — platforms and AI developers — regardless of anyone's ideology.
- A preemption clock is running
- The DOJ AI Litigation Task Force has been able to sue over state AI laws since Jan. 10, 2026[7]. Every state statute passed in the meantime is both a policy and a piece of litigation positioning.
Material realityNorth Carolinians reported $432 million in internet-crime losses to the FBI in 2025, and that money is, as a practical matter, gone[1]. Nationally, reported losses passed $20 billion and sextortion submissions passed 75,000, with more than 5,700 minor cases referred to NCMEC[3]. Whether the true underlying crime rate rose 108% or the reporting rate did, the absolute counts are large and the recovery rate is low. Meanwhile North Carolina has written new deepfake and sexual-extortion criminal law[8][9], and a federal task force now exists to challenge state AI statutes in court[7]. Both things are true at once: the state is building enforcement tools and the ground under those tools is contested.
Narrative as a weaponThree groups are shaping how this reads. The N.C. Department of Justice wants you to see a straight rising line and a state government that must be free to act on it — its strongest fact is the sextortion referrals, its weakest is treating complaint growth as crime growth. The federal agencies want you to file a report, so their public numbers are framed as undercounts, which is both honest and self-reinforcing. The AI industry and preemption advocates want you to separate the crime from the technology: they concede the harm and then argue that punishing U.S. developers does nothing to an operator in Myanmar. Nobody in this story is arguing that sextortion is not happening. The fight is over whether rising reports justify state-level rules on AI companies — and that is a question the data, as collected, cannot settle on its own.
How Each Side Sees It
Each major actor’s view — how it frames things, its underlying incentive, and how it’s materially affected. Tap a side to read it.
Frames it asTheir case is that the tools changed faster than the law did. A convincing scam once took a fluent English speaker and hours of work. Now a cloned voice or a synthetic nude image takes minutes and costs almost nothing[6]. So volume goes up while the cost of each attempt goes down. They also argue that reported losses are a floor, not a ceiling, because shame keeps victims quiet — especially teenage sextortion victims[3]. And they argue that state enforcement is the only fast-moving layer: federal cases take years and most victims never get a federal case at all. Jackson's related argument on AI is a federalism one — states have always policed consumer fraud, and a federal rule that blocks state AI laws would strip that without putting anything equivalent in its place[5].
WhyAn elected attorney general with a statewide profile gains from being the visible face of consumer protection, and the SBI needs the Crime Commission's grant votes to fund cyber and forensic units[2][15].
Impact on themThe office absorbs the caseload directly. It also holds the pen on multistate letters to Meta, xAI and AI chatbot companies, which is leverage it loses if federal preemption succeeds[5][6][16].
Frames it asBoth agencies argue their numbers are conservative by design. IC3 counts only people who filled out a form; the FTC's Consumer Sentinel counts only people who complained. Their strongest specific evidence is the sextortion referral pipeline: more than 5,700 minor-involved submissions handed to NCMEC in 2025 is a hard count of identified children, not an estimate[3]. On the enforcement side, they point to results — a DOJ Scam Center Strike Force targeting Southeast Asian compounds, and extraditions in child-sextortion cases[1][13].
WhyComplaint volume justifies budget and staffing, and the agencies also want more reporting, which means their public messaging is designed to raise the very number they cite as evidence of growth.
Impact on themIC3 and Sentinel are the de facto national scoreboard. States, legislatures and reporters all build arguments on top of them, so methodology choices at these two agencies shape policy far beyond the agencies themselves[3][4].
Frames it asThey do not dispute that sextortion and fraud are rising. They dispute who should be liable and at what level of government. Their argument runs: fraud is already illegal in every state; the criminals are largely overseas; new state AI statutes therefore fall mostly on lawful U.S. developers rather than on the offenders. Fifty different state rules, each with its own definitions, force a national product to comply with the strictest one — which functions as national regulation set by one legislature. Hence the executive order's framing of 'onerous' state rules and the push for a single federal standard[7]. Notably, some Republican attorneys general have split the difference, backing targeted preemption of algorithmic-discrimination rules while keeping state authority elsewhere[7].
WhyLegal certainty and a lower compliance cost; also avoiding a liability theory in which a generative tool's output makes the tool's maker a party to a crime.
Impact on themThe DOJ task force can sue to void state AI statutes. North Carolina's deepfake crime and its proposed sexual-extortion statute are exactly the kind of law that fight will test[8][9].
Frames it asLawmakers in both parties argue the gap is definitional, not moral. Existing extortion law assumes a real photograph exists. If the image is AI-generated, a defendant can argue nothing real was ever published — so prosecutors are left reaching for statutes that do not fit. Sen. Amy Galey (R-Alamance) has pushed a bill creating a distinct 'sexual extortion' crime that covers both real and AI-generated images[8]. House Bill 934 would separately make distributing a deepfake to harass, extort or threaten someone a Class 1 misdemeanor, with a court able to order the image destroyed[9]. Critics of that approach — including some free-speech advocates — warn that broad deepfake definitions can sweep in parody and political speech.
WhyChild-protection bills carry near-zero political cost and clear constituent salience in an election year.
Impact on themThese are the statutes most exposed if federal preemption litigation succeeds, and the ones prosecutors would use if it does not[7][9].
Frames it asVictim advocates argue the debate over 'is it really rising' misses the point for the people affected. Financially motivated sextortion of teenage boys is fast: contact, image, threat and payment demand can happen inside a few hours[3]. The harm is done long before any statistic is compiled. On the money side, older adults lose the largest amounts, and reported losses are almost never recovered. Advocates also note that the shame that stops a teenager from telling a parent is the same thing that keeps the case out of the data.
WhyGetting takedown and reporting mechanisms that work in hours rather than weeks, and reducing the stigma that suppresses reports.
Impact on themNorth Carolinians reported $432 million in internet-crime losses in 2025 — money that, in practice, mostly does not come back[1].
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The Bias Ledger average rating 3.7
The same story, as framed by outlets across the spectrum, ordered least to most biased. The bias score (1 = straight, 10 = heavily spun) is an AI assessment of that framing — click an outlet to see its track record. The tell is the word choice or omission that reveals the angle.
| Outlet | Vantage | Bias | How they frame it | The tell |
|---|---|---|---|---|
| CNBC | U.S. center, business | 2 | "Imposter scams led fraud reports to the FTC for fifth straight year in 2025, causing $3.5 billion in losses" | Precise and sourced, and it says 'reports' in the headline. The framing is consumer-protective rather than regulatory: the story is what happened to your money, not who should be liable for it. |
| WRAL | U.S. center (Raleigh local TV) | 3 | "Fraud, extortion and sextortion on rise in North Carolina, according to DOJ" | The headline is carefully attributed — 'according to DOJ' — which is good practice. But the piece relays the 108% extortion rise and the 372% loss increase without explaining that both are counts of reports filed, not of crimes confirmed. The percentage does the persuading unassisted. |
| CyberScoop | U.S. cybersecurity trade press | 3 | "Cybercrime losses jumped 26% to $20.9 billion in 2025" | Straight numbers reporting on the IC3 release, but the trade-press frame treats the complaint total as a measure of cybercrime itself. The word 'losses' silently becomes 'reported losses' only deeper in the piece. |
| Africanews | Pan-African, Congo-Brazzaville based, Euronews affiliate | 4 | "651 arrested in Africa-wide crackdown on online scam networks" | Frames the same criminal ecosystem as an African law-enforcement success with African victims, not as an export problem aimed at Americans. The recovered $4.3 million is foregrounded; U.S. victim losses do not appear. That is a real corrective to the 'Nigerian scam' shorthand — and also a national-image interest. |
| Tech Times | U.S. tech aggregator | 5 | "Operation Jackal IV: Crime-as-a-Service Infrastructure Fuels Sextortion of Minors" | 'Fuels' is doing editorial work in a headline about an arrest tally. The piece leads with the most alarming detail — boys as young as 14 — and puts the 58 arrests behind it. |
| North Carolina Lawyers Weekly | U.S. legal trade press | 5 | "Attorney General Jeff Jackson leads bipartisan coalition opposing potential ban on state AI protections" | Adopts the AG's own framing wholesale — 'protections' rather than 'regulations,' and 'ban' for what the other side calls a uniform national standard. The word choice settles the dispute in the headline. |
References
- Fraud, extortion and sextortion on rise in North Carolina, according to DOJ — WRAL · Raleigh commercial TV station; local news, center
- Advisory: Governor's Crime Commission Meets Sept. 3 — North Carolina Department of Public Safety · State government agency; the commission's host body
- 2025 IC3 Annual Report — Federal Bureau of Investigation · U.S. federal law enforcement; self-reported complaint data it also solicits
- FTC Data Show People Reported Losing $3.5 Billion to Imposter Scams in 2025 — Federal Trade Commission · U.S. federal consumer-protection agency
- Attorney General Jeff Jackson Leads Bipartisan Coalition Opposing Potential Ban on State AI Protections — North Carolina Department of Justice · Office of a Democratic elected attorney general; party to the preemption dispute
- Attorney General Jeff Jackson Continues Efforts to Protect Children from Deepfake Pornography and AI Chatbots — North Carolina Department of Justice · Office of a Democratic elected attorney general
- Executive Order Tries to Thwart "Onerous" AI State Regulation, Calls for National Framework — Crowell & Moring LLP · Corporate defense law firm client alert; audience is regulated companies
- New NC bills would crack down on AI 'sexual extortion,' take more teens out of juvenile court — WRAL · Raleigh commercial TV station; local news, center
- Bill Summaries: House Bill 934 (2025-2026 Session) — UNC School of Government Legislative Reporting Service · State university nonpartisan bill-summary service; descriptive, not advocacy
- 651 arrested in Africa-wide crackdown on online scam networks — Africanews · Pan-African broadcaster headquartered in Congo-Brazzaville, Euronews affiliate
- Operation Jackal IV: Crime-as-a-Service Infrastructure Fuels Sextortion of Minors — Tech Times · U.S. commercial tech news aggregator; traffic-driven headlines
- Cybercrime losses jumped 26% to $20.9 billion in 2025 — CyberScoop · U.S. cybersecurity trade publication; advertiser-supported, industry-adjacent
- Scam Center Strike Force Takes Major Actions Against Southeast Asian Scam Centers Targeting Americans — United States Department of Justice · U.S. federal prosecutor's office; enforcement-focused
- Imposter scams led fraud reports to the FTC for fifth straight year in 2025, causing $3.5 billion in losses — CNBC · U.S. business news network owned by Comcast/NBCUniversal
- White-Collar Crime Rises in North Carolina — North Carolina Department of Public Safety · State government agency
- Attorney General Jeff Jackson Warns North Carolinians of Investment Scams on Meta Platforms — North Carolina Department of Justice · Office of a Democratic elected attorney general