A cyber criminal in front of a laptop, stealing personal data, passwords, documents, and credit card information.

Investment Fraud Ring Busted With $98M In Losses, 5 Arrested

An investment fraud ring was apprehended by Europol and Eurojust. A group of five individuals carried out a large-scale internet investment fraud scam that cheated 33,000 victims out of €89 million (approximately $98 million).

In March, authorities searched 15 locations, including five unauthorised call centres, in Bulgaria, Romania, and Israel over the course of a two-day joint action. Five illegal call centres were discovered, which are likely being used by the criminals for their fraudulent operations.

Europol gathered evidence showing that the crime ring used web and social media banner adverts to entice investors. The investors were led to believe that initial investments of up to €250 would result in larger returns. As a result, they gave small amounts of money. 

As said by Europol: 

The victims were then contacted by so-called personal financial advisors, who promised even higher profits on bigger investments. These higher investments were then subsequently lost, and the illegal profits were paid into the perpetrators’ bank accounts. The fraud scheme allegedly ran between 2019 and 2021, with the suspects of the operations in 2021 or their associates recently setting up call centres in Bulgaria and Romania.

The fraudsters took advantage of the victims’ attraction to the low-interest rates that were common at the time of the scam, urging them to follow their instructions. This made the fraudsters’ claims of large returns more attractive. 

The information and intelligence obtained during coordinated operations carried out in Bulgaria, Cyprus, and Ukraine in 2021 helped to enable the arrests made in the preceding month. These operations were focused on fighting the same fraudulent online trading site that offered financial services through trades.

In an October 2021 press release, Europol mentioned: 

The approximately 100 employees of the two call centres, located in Sofia, contacted ‘clients’ and advertised pretend financial services in the field of binary options under the guise of financial advisers. To undertake the scam, the call centre employees had scripts containing predefined conversations and key messaging to convince clients to release more funds.

A later investigation found that most call centre employees were unaware of their employer’s involvement in an investment fraud. 

Ukraine’s cyber police and Europol have found and arrested 5 main members of another international investment fraud ring responsible for more than €200 million (roughly $221 million) in annual losses.

The fraudsters worked illegally from call centers and offices in many European countries, including Ukraine, Germany, Spain, Latvia, Finland, and Albania. They tricked investors into making fake investments using a large network of websites that advertised themselves as official platforms for cryptocurrencies, stocks, shares, prospects, and options investments. 

The first estimate of the financial damage caused by the criminal ring was around €15 million. But additional investigations after 2021 have revealed that the amount of money received from the victims was far greater. The organisation has already victimised around 33,000 people online, and officials are hoping that the latest arrest of the five suspects will put a stop to the group’s criminal activities. 

Eurojust was in charge of carrying out European Arrest Warrants, European Investigative Orders, and Mutual Legal Assistance requests. Europol, on the other hand, led a special Operational Task Force that sent experts to Israel to help with Eurojust’s investigations.

The suspects’ recent arrest revealed high-value items such as fancy watches, technological equipment, cash, bitcoins, and bank cards. These assets were obtained through the operation of bogus investment websites that fraudulently promised high returns to potential investors, convincing them to spend more and fall victim to the scammers. 

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