Europol Arrests Investment Scammers But the Problem is Just Starting

Europol and Eurojust announced a successful joint operation across Bulgaria, Romania, and Israel which led to the arrest of individuals involved in a massive online investment fraud ring. This is the second time authorities managed to catch malicious actors involved in this specific investment scam after a previous raid in 2021.

A couple of weeks ago I wrote about the worrying rise in pig butchering scams wherein people from South East Asian countries are enslaved into working in investment call centers. They then scam people across the world out of their entire net worth. Yet, these aren’t the only investment scams malicious actors started up in 2019. Around the same time, similar scams were popping up from crime rings located across Europe and Northern Africa.

Law enforcement managed to arrest 5 individuals who orchestrated a scam that cost around 33,000 people an estimated €89 million (about $98 million). While this is a positive step forward, these call center-fueled investment scams are extremely worrying in terms of the way they’re set up, how quickly they keep spreading, and how much they end up costing innocent people.

Joint Operation Leads to Arrest of Investment Scammers

The Europol raids took place across two action days in March 2023. The authorities arrested 5 individuals and shut down 5 illegal call centers across Romania, Bulgaria, Georgia, and Israel. The criminal network targets people looking to invest with legitimate-looking ads on websites and social media. The network also created illegal call centers to make the operation even more convincing.

Police officer in full gear next to cubicles with green walls
Europol officers raiding one of the illegal call centers in Bulgaria

The scammers mainly focused on binary options as they’re high-risk investments, providing them with a plausible excuse as to the volatility of the “investments”. After the COVID lockdowns 2020, many countries also saw low-interest rates on loans, which led to an uptick in investors looking for lucrative opportunities.

At first, the ads would lead people to fake investment websites and convince the victims to make initial investments priced between €200 and €250. To make the deal seem really lucrative, the websites would start showing high profits for their investments. Then employees posing as personal financial advisors contacted victims and promised even higher payouts if they invested even more. When people give in and contribute more, their investments suddenly “go sour” and they lose everything. 

In reality, all their money was simply paid into the scammers’ bank accounts. According to Europol, this operation was a follow-up to an operation that took place across Ukraine, Germany, Bulgaria, Cyprus, and the Netherlands in 2021. Evidence and information collected during this time helped Interpol make the raids and arrests this March. 

Similar to the pig butchering scams I mentioned earlier, these investment scams started in 2019 and have been going strong despite arrests. Investigators initially thought the criminal network had tricked German investors into losing around €15 million (about $16.5 million). The authorities have adjusted that number to €89 million (~$98 million) with victims from several countries.

The criminal network had used over 250 known domain names to host its fake investment scam, although it’s possible more exist. While the operation previously had 2 call centers with about a hundred employees, during the most recent raid, investigators discovered 5 more call centers. Europol didn’t supply information about how many people the call centers employed but did mention these employees were unaware they were selling a scam.

The Threat Continues to Outpace Authorities

Authorities have been routing out these types of investment scams in the last few months in an effort to curb their aggressive spreading. But their efforts can’t keep up with the incredible growth of these scams. According to the Financial Times this trend is part of a broader rise in authorized fraud. 

Authorized fraud involves criminals posing as authority figures, love interests, or employees at financial institutions to get people to invest. Data from the FTC corroborates this worrying trend, as losses to investment scams have more than doubled between 2021 and 2022. The FTC also reports investment scams losses rose by 300% between 2020 and 2022.

Bar graph in blue and orange showing investment scam increases over years
Investment scams have become one of the most popular forms of digital fraud

Together with the US Justice Department, Europol also shut down a “notorious hacker marketplace.” Dubbed operation “Cookie Monster,” the now shut-down website sold stolen account credentials and access to infected devices. But the dark web version on Tor is still up and running, which makes this is a perfect example of how efforts by authorities are only chipping away at the problem while the criminal industry as a whole keeps growing.

Investment scams in particular are massively popular because they can generate huge profits for criminals. 

You’re the First Line of Defence

The police can’t keep up with the rise in digital crime and they definitely don’t have the tools to stop criminals before they start scamming people. This means it’s up to you to protect yourself and your devices from cybercrime. Given how popular investment scams have become, it’s now even more important that you do proper due diligence before investing in anything. 

Approach potential investment opportunities with a healthy degree of skepticism. For example:

          • Would a proper investment platform cold call you to sell you an asset? Likely not. 
          • Is the asset they’re trying to sell you registered as a legitimate asset within any jurisdiction? With scams, it’s not.
          • Can you buy and sell that asset anywhere else outside of the platform you’re working with? Again, highly unlikely.
          • Is this platform a registered company? Check with the relevant consumer authority where the platform is based. 
          • Look at reviews and social media for any red flags.

You could also contact an independent financial firm to ask more questions about a platform’s legitimacy — but keep in mind they might try to sell you on their own services.

On top of this, it’s important to protect your digital data and devices so cybercriminals have a harder time targeting you. This includes improving your digital hygiene, keeping on top of phishing scams, and using tools like a VPN to secure your data against outside attacks. Nothing is foolproof and protecting your digital life takes constant effort but it’s worth doing if you don’t want to hand over your identity or hard-earned money to scammers.

Leave a comment

Write a comment

Your email address will not be published. Required fields are marked*