An organized network operating from the former Soviet state of Georgia has scammed thousands of savers from the UK, Europe, and Canada out of $35 million (£27 million) in a massive cryptocurrency scam. The victims were deceived by fake celebrity advertisements on Facebook and Google, which the government had promised to outlaw three years ago.
The fraudulent scheme was exposed through a massive leak of scam call center data, revealing how scammers manipulated victims into transferring large sums of money. The scam primarily targeted UK citizens, who accounted for about a third of the total amount stolen, approximately £9 million.
How Were Victims Tricked?
Deepfake videos and fictional news reports featuring well-known figures such as money expert Martin Lewis, radio DJ Zoe Ball, and adventurer Ben Fogle were used to promote fraudulent cryptocurrency scam and other investment schemes.
The scammers, operating from three office blocks in Tbilisi and referring to themselves as “skameri” (Georgian for scammers), consisted of about 85 well-paid call center agents. They persuaded pensioners, employees, and small business owners to transfer millions from their savings accounts.
The fraud functioned on an industrial scale. Since May 2022, approximately 6,000 people worldwide have been duped. A separate dataset from the leak indicates that 45% of attempted scam calls were made to UK numbers. Out of 2,000 victims who lost the largest sums, 652 were based in the UK.
How Did Affiliate Marketers Contribute to the Scam?
The fake advertisements, frequently referencing billionaire Elon Musk, appear to have been placed by affiliate marketers who communicated anonymously with the scammers. These marketers earned commissions by gathering the contact details of potential victims, who were then targeted by the call center agents.
What Were the Human Costs of the Scam?
The impact on victims was devastating. In one recorded call, a former NHS doctor in her 70s, living in sheltered housing in London, pleaded with scammers, saying: “I’ve used up every penny of my savings, I have nothing. And I can’t survive like that. My brother is already asking me for the money I have borrowed from him back.”
She ultimately lost about £50,000 and is believed to have died shortly after her last contact with the call center. Another victim, a retired London Stock Exchange employee, spent over 135 hours on the phone with scammers and was persuaded to part with more than £162,000 in savings.
Another case involved a small business owner who was convinced to invest in a fake trading platform, only to lose £75,000. “They made it sound so real, promising huge returns,” he said. “By the time I realized it was a scam, it was too late.”
How Did the Scammers Spend Their Earnings?
The leaked data cache not only revealed the identities of thousands of targeted individuals but also showcased the extravagant lifestyle of the scammers. Operatives spent their ill-gotten gains on Rolex watches, Range Rovers, Cartier jewelry, and lavish staff parties.
Luxury travel was another common expenditure, with scammers taking expensive trips to Dubai and the Maldives. Some even purchased properties and high-end apartments, showing the extent of their earnings from unsuspecting victims.
Were Online Banks and Payment Services Involved?
Scammers pressured victims into opening accounts with digital banks such as Revolut, Chase, and Kroo to facilitate their fraudulent transactions.
Revolut, which received a UK banking license last year, was the most frequently mentioned institution in the leaked data, with 119 customers out of 403 listed in an internal Georgian call center spreadsheet. Kroo was involved with 50 victims, while Chase was linked to 14 cases.
Revolut, Kroo, and Chase emphasized that they take fraud very seriously and are investing heavily to combat such crimes. A Revolut spokesperson stated: “Across our UK customer base in 2023, we found that 60% of all reported scam cases originated on Meta-owned platforms like Facebook and WhatsApp. Yet these firms have no role in warning customers of such scams, nor reimbursing victims.”
Some victims faced additional issues when trying to recover their funds. “The bank told me there was nothing they could do since I authorized the transaction,” said one victim. “It felt like I had nowhere to turn.”
What Has Been Done to Stop Such Scams?
Public figures like Martin Lewis, Zoe Ball, and Ben Fogle have previously spoken out against deepfake scam ads. Lewis, in particular, launched a high-profile lawsuit against Facebook in 2018, after the platform published multiple false investment stories using his image and name. The case was dropped nine months later after Facebook agreed to donate £3 million to fund an anti-scam project and launch a UK-specific one-click reporting tool.
Despite these measures, fraudulent advertisements continue to appear on social media, highlighting gaps in regulation and enforcement.
Is the UK Government Doing Enough?
The UK government has introduced new laws to protect people online, including the Online Safety Act. However, while scam posts may soon prompt fines, the sections targeting fraudulent advertising by organizations are not expected to take effect until next year.
Chi Onwurah, chair of the Commons Science, Innovation, and Technology Committee, stated: “The committee is currently investigating the spread of misinformation online. Our inquiry has raised significant concerns about the effectiveness of the Online Safety Act in tackling bad practices online, threats from AI, and issues with the online advertising ecosystem. This case shows the urgency of addressing the shortcomings of the OSA to ensure that it can protect the public and ensure their online safety.”
A government spokesperson added: “Scammers who trick people into parting with their money are committing a criminal offense and should be punished. But social media companies also have a responsibility to ensure their sites are not providing a platform for such material intended to rip the public off.”
How Have Tech Companies Responded?
A Meta spokesperson claimed it was against the company’s policies to run advertisements that “promote or facilitate scams,” adding, “Everyone needs to work together to tackle these sophisticated scams, which is why we created the Fraud Intelligence Reciprocal Exchange (FIRE) program to allow banks and financial institutions to share information and better combat this problem. We invite Revolut to be a part of this effort.”
Google also addressed the issue, stating: “Protecting users is our top priority, and we have strict ad policies that govern the types of ads and advertisers we allow on our platforms. We enforce our policies vigorously, and if we find ads that are in violation, we remove them.”
However, critics argue that these companies are still not doing enough. “If they can use AI to target ads so effectively, why can’t they use the same technology to stop scams?” asked an online safety expert. “More accountability is needed.”
What Can Consumers Do to Protect Themselves?
Experts recommend that individuals remain vigilant when encountering investment opportunities online. Red flags include promises of guaranteed high returns, pressure to invest quickly, and requests for personal or financial information.
“Always verify investment opportunities through official channels,” said a financial advisor. “If something seems too good to be true, it probably is.”
Victims are also encouraged to report fraud to their banks and relevant authorities, such as Action Fraud in the UK. Raising awareness is key to preventing further losses.
With scams becoming more sophisticated, consumers must stay informed and cautious when navigating the digital world. As fraudsters adapt their tactics, so must regulators, banks, and tech platforms to ensure better protection for the public.
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