According to AARP, this is a common scam that has cost grandparents millions of dollars. Unfortunately, the tax rules don’t help in any way. The deduction for a theft loss—assuming such scam is a theft under state law—cannot be claimed in 2018 through 2025.
Fully deductible interest on up to two residences if acquisition debt secured by a home is $1 million or less, and home equity debt is $100,000 or less.