Euro Police Disrupt $17m Fake Investment Scheme

Security

European police have disrupted a significant financial crime organization said to have made at least €15m ($17m) by tricking investors.

Between May 2019 and September 2021, the criminal network reportedly lured German investors via adverts on social media and elsewhere, supported by over 250 newly registered domain names.

As part of the scam, two call centers were reportedly set up in the Bulgarian capital of Sofia, where around 100 employees were required to pose as financial advisors and try to sell fake binary options — a type of financial betting.

Working from scripts, the call center operatives used pre-written messaging to nudge their victims into releasing more funds. However, most were not aware they were involved in a scam, according to Europol.

The criminal gang behind the scam took the money invested by these ‘clients’ and pocketed it, so that they didn’t receive any payment of winnings or credit balance updates following their investment.

It’s unclear where the scam’s ringleaders were based, but the criminal network is said to have been connected to a Ukrainian company.

An action day on October 6 saw involvement from law enforcement and judicial authorities in Bulgaria, Cyprus, Germany, the Netherlands and Ukraine, supported by Europol and Eurojust.

It resulted in eight house searches in Ukraine, Bulgaria and Cyprus, the questioning of 17 individuals in Bulgaria, the arrest of one “high-value target” in Cyprus and the seizure of important assets including phones, electronic equipment, bank accounts and data back-ups.

The investigation has also so far led to 246 criminal proceedings across 15 German federal states.

Investment fraud was the third-highest money-maker for cyber-criminals last year, according to data from the FBI.

It revealed that these scams made them over $336m, on the back of just 8700 victims.

Cryptocurrency fraud is typically a big driver of this criminal activity. Earlier this year, the founder of two crypto hedge funds pleaded guilty to defrauding investors out of around $100m.

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