People in Ireland have lost up to €1 million in cryptocurrency-based frauds as the gangs involved have developed more sophisticated ways of enticing unsuspecting victims into the bogus "investment" transactions.
Garda sources said one victim they were aware of had lost about €1 million, there are many more cases where €50,000-€200,000 had been stolen after people were enticed into buying non-existent cryptocurrency.
Often the victims had visited websites or dealt with bogus sales agents over the phone or via email. However, while the victims believed they were buying cryptocurrency, on the promise its value would increase, the currency never existed. Instead, the victims were lodging their money into accounts controlled by organised fraud gangs or were paying for cryptocurrency the gang members controlled.
In a growing number of cases in Ireland, middle-aged people and pensioners were being targeted. They were being contacted by cold calls and texts or were clicking on online adverts that brought them to websites purporting to be trading sites for bitcoin and other currencies, losing their money to the scammers rather than buying crypto, as they believed.
Call centres
Garda sources pointed to a major police raid on criminal-run call centres in Latvia and Lithuania last week as an example of how gangs targeting people in Ireland were operating. The raids in the Baltic countries targeted three call centres, where 108 people were arrested.
An estimated 200 call takers, presenting themselves as “traders” to their victims, were working the phones at the centres, all run by the same gang in office buildings.
The call takers or “traders” spoke English, Russian, Polish and Hindi and were in contact with victims all over the world, encouraging their victims into bogus transactions presented as investment opportunities. The authorities in Latvia and Lithuania said the three call centres were generating profits of €3 million per month.
“At the moment the return from having money on deposit in a bank is nonexistent, and when these scammers contact you, or you reply to their adverts, they are offering big returns and that entices people,” said one Garda source. “The reality is that while the people who fall victim to this believe they’re making an investment, they haven’t a clue what they are doing or about cryptocurrency.”
Raising awareness
As part of a fraud awareness week being run by An Garda Síochána, gardaí have warned investment frauds increased by 67 per cent last year. Some 234 crimes were reported, with a loss of €12.4 million, in 2021 compared with 140 reports and total losses of €8 million in 2020.
Gardaí believe the true level of investment frauds being perpetrated on people in Ireland is much higher as many people are too embarrassed to come forward. In other cases, victims do not realise for a long time that they have been scammed.
"Many [people] are losing their pensions or life savings," said Det Supt Michael Cryan of the Garda National Economic Crime Bureau. "Virtual currencies are high risk and not regulated. If something goes wrong there are no consumer protections in Ireland or services from the Financial Services Ombudsman. Our advice is to do your homework before making any investments. Always seek professional financial and legal advice, only use regulated entities and be wary of too-good-to-be-true offers – they usually are."
The Garda also said under no circumstances should anyone allow themselves be rushed into an investment, adding that the fraudulent websites being used by the gangs were very high quality and the phone manner of so-call traders or investment managers can be very professional and polished.
The gangs involved sometimes offered to take control of a victim’s computer, often by the victim downloading an app, to complete a part of a transaction, and gardaí have warned people against agreeing to that.
