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.