Europol arrested 108 individuals on suspicion of being involved in an international investment scam.The organized crime gang ran an international call center operation with 200 fake traders who promised prospective victims lucrative investment opportunities.
The crime group consisted of English, Russian, Polish, and Hindi speakers, suggesting the nationalities of the suspects. The English-speaking suspects potentially targeted victims in the United States, United Kingdom, and Ireland, according to Irish Garda National Economic Crime Bureau detective Superintendent Michael Cryan.
Europol says the suspects defrauded victims by tricking them to invest in Bitcoin, commodities, and foreign currencies.
The police raids involved hundreds of law enforcement officers from Europol, the Latvian State Police (Valsts policija), and the Lithuanian Police (Lietuvos Policija). The European Financial and Economic Crime Centre and European Cybercrime Centre also participated in the March 24-25 operation. Eurojust was involved in setting up an investigating team and executing a European Investigation Order.
The raid targeted three call centers in the two Baltic states, with 80 miscreants arrested in Riga, Latvia, and 28 in Vilnius, Lithuania.
Investment scam suspects made millions per month by defrauding unsuspecting investors.
Law enforcement officers seized cash, bank accounts, luxury vehicles, and €95,000 in cryptocurrencies during the raid.
“According to preliminary calculations, the suspects arrested are believed to have turned an illegal profit of over EUR 3 million per month with this scam,” Europol wrote.
According to the FBI’s 2021 Internet Crime Report, investment fraud is the second-highest earner for cybercriminals after business email compromise (BEC), which cost the victims about $2.4 billion in 2021. The Internet Crime Center (IC3) said victims lost about $1.5 billion to investment fraud in 2021, which was a fifth (21%) of all cybercrime losses ($6.9 billion) reported in 2021. FBI says cyber scams usually target older subjects, with those above 60 years losing about $1.68 billion to cybercrime.
Similarly, investment scams were part of the romance scams where the suspects coerced their victims into investing in fake cryptocurrency portfolios.
The U.S. Federal Trade Commission (FTC) says social media was a rich hunting ground for scammers. Data from the FTC shows that about 95,000 Americans were victims of social media fraud in 2021, losing about $770 million. At least a quarter of the victims who lost money to fraud in 2021 indicated that the scam started on a social media platform.
“Call center scams have, of late, become the scam ‘de rigueur’ to out,” said Andrew Barratt, Vice President at Coalfire. “YouTube is now littered with ‘scam-outers’ publicizing various operations often across India showing the vast industry this has become.”
Barratt noted that the scammers’ success resulted from directly targeting end-users or particular demographics.
“They’re a complicated foe to defend against, often requiring major brands to mount customer side security awareness campaigns explaining just how they interact with their customers, particularly in the financial services industry. But with the breadth of approaches used to monetize these scams, other brands are also following suit.”
How to spot an investment scam
According to the FBI, potential investors can identify an investment scam by observing certain red flags.
Signs of an investment scam include promises of abnormally high returns, unusual payment methods such as credit cards, wire transfers, and cryptocurrency, or guarantees of risk-free investments opportunities.
Most investment scams also involve unsolicited calls from strangers offering tempting investment opportunities.
Similarly, unverified celebrity endorsements and unknown cryptocurrency wallets could suggest an investment scam. Potential investors should also be wary of wild claims of supernormal earnings on social media, especially those promising to multiply your initial investment within hours.
Joseph Carson, chief security scientist, and Advisory CISO at Delinea said that despite the latest advancements in technology, the oldest trick still works.
“While most modern techniques try to appear as legitimate internet services, criminals continue to use old proven methods, such as calling targets directly, to get them to hand over their money under false pretenses. This latest incident proves that it still works.”