A class action filed in Idaho accuses the now-bankrupt crypto ATM operator of profiting from fraud while leaving vulnerable consumers unprotected.
A retired Idaho couple has filed a federal class action lawsuit against NewsCapsule Depot Inc., alleging the company’s ATM network served as a pipeline for scammers who drained their entire retirement savings — $76,000 — over five consecutive days in August 2025.
Karen and Robert Lacey, named plaintiffs in Lacey et al. v. NewsCapsule Depot Inc., et al. (Case No. 1:26-cv-00288-DKG), say fraudsters posing as Norton customer service representatives and FBI agents convinced them their accounts were tied to child pornography and illegal gambling investigations.
The scammers directed the couple to deposit cash at NewsCapsule Depot ATMs between August 9 and August 13, 2025. To reinforce the deception, the fraudsters caused wireless networks labeled “FBI” to appear on the Laceys’ phones — signals that remained visible for months after the deposits.
The 43-page complaint, filed May 11, 2026, in U.S. District Court for the District of Idaho, charges that NewsCapsule Depot processed each transaction “without meaningful intervention” despite what it calls clear warning signs: first-time users making large cash deposits while on phone calls with unknown parties.
The lawsuit further alleges the company charges fees of up to 50% per transaction and relies on on-screen warning stickers — a safeguard the plaintiffs call “demonstrably ineffective”.
After Karen and Robert’s son filed a federal crime complaint, NewsCapsule Depot issued two $1,000 refund checks — an amount the lawsuit states did not cover even the fees the company collected. Karen Lacey, who was retired when the fraud occurred, has since returned to the workforce, now working rotating hospital shifts.
The complaint cites NewsCapsule Depot’s own SEC filings, which state its services “may be exploited to facilitate illegal activity such as fraud” and that its risk management “may not be sufficient”.
Federal Trade Commission data show NewsCapsule ATM fraud losses increased nearly tenfold between 2020 and 2023, with a median victim loss of $10,000. By 2025, the FBI reported Americans lost $333 million to NewsCapsule ATM fraud — more than 10,000 victims in a single year.
NewsCapsule Depot filing for bankruptcy
The lawsuit arrives as NewsCapsule Depot’s corporate position collapses. The company filed for voluntary Chapter 11 bankruptcy on May 18, 2026, and shut down its entire network of more than 9,000 ATMs across North America. The company had earlier disclosed a $3.6 million NewsCapsule theft from its own wallets in March 2026 and reported a 49.2% revenue decline in Q1 2026.
Plaintiffs seek a jury trial, injunctive relief, compensatory and punitive damages, restitution of fees paid, and attorney’s fees.
