Steel law enforcement handcuffs on keyboard showing investment fraud scheme

Europol Arrests Five High-Value Suspects in $98 Million Online Investment Fraud Scheme

European authorities have apprehended five high-value suspects in a follow-up law enforcement operation targeting online investment fraud dens in more than a dozen locations.

Police searched fifteen locations, including five illegal call centers in Bulgaria, Romania, Georgia, and Israel during the two-day cross-border operation initiated by German authorities.

Eurojust and Europol supported and coordinated the operation since January 2023, with Germany sending 33 police officers on the ground in the four foreign countries.

Police seized luxury items, including expensive watches, electronic devices, cash, Bitcoins, and payment cards suspected to be the proceeds of online fraud.

Europol’s follow-up operation nets online investment fraud suspects

The operation followed the 2021 crackdown in which Europol agents arrested 15 suspects in Serbia and Germany. They also questioned 261 other suspects in the two countries and Bulgaria and Cyprus.

The 2021 operation allowed authorities to uncover crucial evidence that led to the recent arrests. They also discovered that the online investment fraud scheme was more extensive than previously anticipated.

“Previously, the financial damage caused by the scam was estimated to be at least EUR 15 million,” Europol said in a press release. “However, based on the new information, the criminal network behind the fraudulent scheme has caused much more financial damage and created many more victims.”

At least 33,000 investors were victims of the online investment fraud scheme, losing about €89 million ($98 million).

Victims lured via social media and web banner ads

According to Europol, the online scam masterminds targeted victims via social media and web banner ads and lured them to commit small amounts between $200-$250 by promising huge returns.

After the initial investment, the victims were later contacted by fake “personal financial advisors” who promised bigger profits if the victims made larger investments. To seal the deal, they showed the victims fake graphics indicating the enormous profits they had made.

The low-interest rates at that moment tempted victims to engage in high-risk financial investments. However, the money they invested went to the alleged scammers’ bank accounts, and the victims did not receive the profits or their capital upon request.

“These higher investments were then subsequently lost, and the illegal profits were paid into the perpetrators’ bank accounts,” Europol said in 2021.

The alleged scammers operated from numerous call centers between 2019 and 2021, with the most recent ones opened in Bulgaria and Romania. The investment fraud masterminds employed over 100 call center operators and registered over 250 domains to promote the scheme.

“This criminal network, comprising a number of different criminal actors operating through call centres, lured victims into investing large amounts of money into fake cryptocurrency schemes.”

Seemingly, most call center employees were unaware that their employers were allegedly involved in online investment fraud, “However, a subsequent investigation suggests that most of the employees were unaware that the company they were working for was involved in a fraud scheme.”

In 2021, Europol said the suspects allegedly defrauded victims by pretending to offer financial services in binary options.

Investment fraud remains one of the most notorious cybercrimes in recent years. According to the FBI’s Internet Crime Report 2022, “investment scams were the costliest scheme reported” to the Internet Crime Complaint Center. The cost of investment scams more than doubled from $1.45 billion in 2021 to $3.31 in 2022.