Authorities clamp down on fraudulent network, targeting firms behind misleading promotions
Two arrested as authorities in Europe and Israel target companies linked to ad campaigns for fake online investment platforms.
Authorities in Europe and Israel have targeted companies and suspects behind fraudulent social media advertising campaigns as part of a crackdown on a massive cryptocurrency fraud and money laundering operation, which allegedly scammed thousands of victims with fake online investment schemes.
Coordinated actions by law enforcement in Belgium, Bulgaria, Germany, and Israel in November led to two arrests and other suspects questioned, Europol said Thursday.
The European Union law enforcement agency said it was the second phase of an operation that led to nine arrests in October across Cyprus, Germany, and Spain connected with the laundering of illicit funds generated by fraudulent cryptocurrency investment platforms.
At that time, 600 million euros ($699 million) had been laundered by the network, according to Eurojust, the EU agency for criminal justice cooperation. Europol has now put the figure at 700 million euros ($816 million).
Sebastian Bley, senior specialist in economic crime at Europol, told OCCRP that the targeted network had a “corporate structure” including departments responsible for infrastructure, sales, advertising, money flows and money laundering. He said that the network had managed to defraud people on an “industrial” scale.
The criminal network had allegedly lured in scam victims through online advertising, social engineering via criminal call centers, and fake cryptocurrency investment platforms which promised high returns.
Once victims transferred their cryptocurrency, the funds were stolen and laundered across various blockchains and crypto currency exchanges, Europol said.
The November actions targeted companies and suspects that Europol said were part of “affiliate marketing” infrastructure using false advertising to support the online scams. Europol said in a statement that affiliate marketing was a “key pillar of the investment fraud ecosystem.”
Online adverts for phony investment schemes impersonating celebrities, politicians and respected media outlets, often featuring deepfake videos, had become a “significant challenge” across the world, Europol said, with data from potential investors then used to defraud them.
Europol did not name any of the suspects or firms targeted. There were no details about where the two arrests took place.
In March this year, the Scam Empire investigation led by OCCRP and Swedish Television (SVT) revealed how affiliate marketers served up contact details of would-be investors to scam networks in return for lucrative commissions.
The investigation showed how people were reeled in by ads for get-rich-quick investments schemes on mainstream websites and social media platforms — often using fake news articles featuring supposed celebrity endorsements. If they signed up, their details were sent to scammers.
Scam Empire was based on 1.9 terabytes of leaked data obtained by SVT and exposed how two groups of call centers, based in Israel, Eastern Europe, and the country of Georgia, convinced people across the world to make “investments” totalling at least $275 million.
Europol could not confirm whether the network targeted by its recent operations overlapped with the Israeli/European group revealed in the Scam Empire investigation.
