The operation was carried out against an organized group that used online trading platforms to swindle victims out of US$36 million
Europol and several national
law enforcement agencies have teamed up to take down an investment fraud and
money laundering ring that caused losses of approximately €30 million (US$36
million) to hundreds of victims, according to a press
release by the European
Union’s law enforcement agency.
The investigation led to
the arrest of 11 suspects and involved the search of dozens of locations across
Europe and Israel with law enforcement officers seizing a range of ill-gotten
gains including jewels, real estate, high-end vehicles and some €2 million
(US$2.4 million) in cash. The effort was spearheaded by German law enforcement
authorities and supported by their peers from Bulgaria, Israel, Latvia,
North-Macedonia, Poland, Spain, and Sweden.
How the fraud
ring operated
To dupe victims out of
their money, the group set up an operation that consisted of at least four
online trading platforms that promised significant profits from investments in
cryptocurrencies and high-risk options to potential investors. Victims were lured
to participate in these investments through advertisements posted on various
social media platforms and search engines.
“The members of the
criminal group were posing as experienced brokers when contacting the victims
via the call centre they had set-up. The suspects were using manipulated
software to show the gains from the investments and to motivate the victims to
invest even more,” said Europol describing the scheme. The call centers
operated by the criminal network worked out of Bulgaria and North-Macedonia.
The group preyed on people
from all around Europe; however, victims from Germany alone claimed losses of
at least €7 million. Meanwhile, Spain recorded 300 complaints about the scheme.
To launder their illicit profits, the criminals used bank accounts operated by
various shell companies located in European countries.
Investment fraud remains
one of the most common
scams that various criminal
groups use to convince unsuspecting victims into parting with their money. Per
the FBI’s 2020 Internet
Crime Report, losses
reported from investment fraud topped US$336 million and were the third
costliest cybercrime on the list. Only BEC
schemes and dating scams caused higher losses last year.
Meanwhile, online trading
platforms that have become ever more popular over the past few years also
present a certain amount of risk, and not just that involving picking the wrong
stocks or commodities. Online traders have to be wary of threats such as phishing
attacks and impostor
apps preying on their
login credentials. Vulnerabilities that could be lying undetected in their
platform of choice could also ultimately put
their money at risk.