This
appeared last week:
‘Psychopaths are the best’: Confessions from inside the scam industry
From marketing and retention to catastrophe and recovery,
the life cycle of the scam industry is breathtakingly cruel and strikingly
consistent.
By Aisha Dow
November 17, 2024+
Professional scammer Mitch says most people in his industry
fall into two categories: They’re psychopaths, who enjoy what they do, or they
are deluding themselves about the terrible impact of their crimes.
“Psychopaths are the best agents,” he muses. “But I believe
any scammer who’s not psychopathic, I honestly believe they will have lasting
consequences.”
Mitch is coy on how he wound up managing a scam centre
peddling phoney investment schemes in eastern Europe. He also hesitates when
asked if he still thinks about people – victims – he had become close to over
the years.
“Yes,” he replies. “I’ll leave it at that.” But then, after
a short pause, he continues.
Scam agents start by honing their skills on low-value
victims, but hoping to move up the food chain, advancing to new departments
where there is more money to be made.
These “low-value” targets are people with the smallest
incomes, often with the most to lose.
“You’re not gonna get Mark Zuckerberg, billionaire
extraordinaires. No, you get everyone who’s sick, who doesn’t have money, who’s
on social support and basically has very bad income.
“The main thing you do to prove yourself is take their last
money, put them in crippling debt,” he says. “That’s something that you don’t
forget.”
This is the breathtaking cruelty of the cyberfraud world.
It’s a place where each scam story is slightly different, but there is a
familiar pattern.
This masthead’s investigation used accounts from scam group
insiders, private investigators and victims to trace the key steps of a typical
online investment scam.
People’s journey might begin with a scam
advertisement, reach a false high as victims are tricked into believing
they are making windfall profits, and then end with their details being passed
on to a new set of scammers who falsely claim they can recover the stolen
money.
Australia is considered one of the easier targets for
scammers, according to industry insiders and cybercrime investigators.
Investment scams cost Australians an estimated $1.3 billion last year.
The fraudsters come for people’s savings, their
superannuation and the roof over their heads.
“They promise, promise from the bottom of their heart that
everything will be right, but it’s just so full of lies,” says Janelle Free, a
retired hairdresser from Queensland.
“They’d take your blood, if they could, they’d take your
organs, they would literally kill you to get the last out of you, and they’re
so good at it.”
Asked how much she lost to the scammers, Free replies: “I
sold my house, darling, and gave him my whole house funds.”
“It all starts from marketing, right?” says Mitch, who is
using a fake name. Charming and confident, he is one of several scammers this
masthead spoke to who effectively act as double agents, working inside scamming
syndicates, while also providing information, sometimes through third parties,
to cybercrime investigators or governments.
He explains how he has built rapport with victims, telling
the people he’s scamming that he has ties to the country they live in, or that
they share the same interest or hobby.
“At the end of the day, if you have any common sense and
check where the company is located … you will see there is a scam. So what you
do is you create a bond with the client, with the victim, so they don’t do
that.”
Marketing is typically outsourced to groups called
“affiliates”, organisations that specialise in mass marketing campaigns and
search engine optimisation. They collect personal details of potential victims
by running scam advertisements, videos and other online content that invite
clicks and detail registration.
The affiliates sell these “leads” to companies like the one
Mitch works for.
He says affiliate companies charged about $1200 to $3000 for
a victim’s details if they had registered with a fake investment platform and
then put down a small investment or deposit of around $250. The scamming
company might pay $100 for someone’s information if they had only registered
their details, but were yet to invest any money in a fraud scheme.
According to Mitch, Facebook is the most common source of
victims for his call centre, followed by Instagram.
He says scam ads deleted by Meta were
quickly replaced with new ones. By running numerous Facebook accounts and
spreading their ad spending among them, criminals were able to keep running a
steady stream of advertisements.
“What they usually do is they segregate the accounts. Let’s
say they have 100 ads running. It’s not going to be under one roof. It’s going
to be under 100 roofs. And if one roof gets torn apart, you just change one
roof, not all hundreds.”
“It’s a very, very profitable activity,” says New-York based
computer security expert Jerome Dangu, who co-founded Confiant, a company that
specialises in blocking scam ads.
Dangu says affiliate marketers commonly deployed single-scam
ad campaigns that reach millions of viewers globally.
In the recent past, he says scam ads have often mentioned
cryptocurrency Bitcoin. These days, the popular theme is artificial
intelligence-powered investments.
Often they exploit the images of celebrities, with altered
photos or videos that give the impression the famous person is doing or saying
something they are not.
“In Australia, it’s typically billionaires, but also
political figures. They make them endorse these offers that are scams. Another
component is a fake advertorial with the logo of a newspaper or an online news
site… The first step is to collect a name, an email and a phone number, and
then that information is transitioned from one bad actor to another bad actor.”
Sometimes, this trade happens in plain sight. Dangu points
out a website where affiliate marketers sell services and scammers seek to buy
“leads”. Affiliate marketers even publish blogs explaining how they
successfully scammed people.
“They say, ‘I’m a smart nimble marketer, and I did all these
smart optimisations, and that was really profitable’, which means ‘I scammed a
lot of people’,” Dangu says.
Now armed with people’s names, emails, phone numbers, and
sometimes even the amount of money they are keen to invest, scammers move to
the “conversion” stage.
South-East Asian scammer Ramon, who is also using a
pseudonym, says the criminal enterprise uses “lead qualifiers” to making the
first call to victims, using a variety of scripts.
They might ask people if they remember clicking on an ad,
tell them “we have received your inquiry about potential investment
opportunities”, or say that they “know you’ve been looking for fixed-term
deposits”.
“So most of the time, they [the victims] will just respond
and say ‘oh, I remember that, I did go online and click on your ad’... That’s
the time they start pitching them.”
During this first step, it’s common for victims to be asked
for a small initial payment or first-time deposit, typically about US$250
($386), to sign up to a fake investment platform.
“It’s a form of bait,” says Mark Solomons, a fraud and
cybercrime expert with IFW Global. “The scammers will purport to show the
victims that this $250 has magically been turned into $400 or $500 or $600. As
a result, they’re an amazing investment scheme.
“The majority [of victims] probably will leave it at that
and think ‘oh yeah, it looks a bit dodgy, or ‘I can’t really afford to invest
any more’... but then a significant minority will go on to make larger
deposits, and some of those will end up losing millions.”
Meticulous spreadsheets kept by a large scamming syndicate
and seen by this masthead give a unique insight into this early step of the
scamming process. They show, down to the second, when each victim made their
first scam payment, and which particular fake investment brand, with names such
as ArrowTeks, Aussie Trust and London Gates, was used to swindle them.
In just one month in 2021, a single team of people overseen
by a manager was able to get 1465 Australians to part with a deposit – mostly
US$250 but sometimes a little less or little more – the documents show.
Among the rows of Australian victims is a woman called
Daphne, many Roberts and several Janets. There are also 62 Austrians, 511
Canadians, 14 Swiss people, 159 Germans, 28 Danes, 278 Britons and 65 New
Zealanders.
There is a notable column titled: “sales status”. It shows
victims who hadn’t answered their phone, or said they weren’t interested in
investing.
Some cells have the phrase “in the money”.
This means the fraudsters have extracted information from
the victim that gives them reason to think that they’re a juicy target,
explains Solomons. He says the scammers get a sense of this by asking how much
people can invest, what their investment goals are and by judging the victim’s
general level of enthusiasm.
It’s also not unusual for criminals to apply another filter
to who they target, screening out citizens of countries whose law enforcement
they fear, and focusing on those they don’t.
Dan Halpin, whose company Cybertrace specialises in
cyberfraud investigations, says while some syndicates are shutting down their
German teams, and explicitly avoid US citizens, they have no such qualms about
fleecing Australians. In fact, he says scam industry insiders tell him they
have just put more staff onto the “Australian desk” – a team of scammers whose
shift aligns with the Australian time zone, typically with good English and
sometimes with connections to the country.
“The German police and the American police do a lot of work.
They’ll extradite people from foreign countries, they’ll do raids in foreign
countries,” Halpin says. “But Australia, they know that Australia will do
nothing, so it’s just basically a free-for-all for Australians.”
Mitch said he worked briefly on an Australian desk last
year, but quickly gave up the job as the hours were “devastating”. The shift
began at 5am and ended at 1pm.
While the early steps of an online investment scam tend to
be structured, based on set scripts and automated systems, the next phase,
often dubbed “retention”, is different.
“The longer the relationship lasts, the less scripted it
becomes, because the brokers are starting to develop relationships with people,
and they know what pushes their buttons,” Solomons explains.
“They’ve been able to persuade them to remortgage their
house, to get more money out of them, or to release their superannuation.”
Ramon says the strategy he uses to get victims to part with
larger amounts of their money usually begins with a call in which he brings
“great news” of a promising but time-sensitive investment opportunity.
Potential investors are told that a private company is about
to publicly list its shares and they’ll need to get in early, otherwise the
offering could be oversubscribed.
“As they say all the time, it’s not what you say, it’s how
you say it. So we’re trained to say it with conviction, to make it sound more
credible,” says Ramon, who works in a team that focuses solely on Australian
victims.
“Once they fill out the application form and send it back to
us, [we then] wait a couple of days for approval, sometimes even more, to make
it look like it’s real.”
Looking back, Janelle Free says her encounter with
investment scammers was more akin to being taken in by a cult than anything
else she can describe.
“I feel now like I have been a victim of a religious society
where they brainwash you,” she says. “I thought I was a smart person… then to
go through this, you just feel so degraded and so humiliated and so stupid, so
very stupid.”
For Free, it began with a fake Gina Rinehart scam ad on
Facebook in mid-2022 and led to a man who said his name was Steve Fischer and
claimed he was a financier based in London, who signed her up to a fake trading
platform called Revenue Centre Pro.
But more important was the relationship she developed with
the scammer, the so-called Steve Fischer, who wheedled his way into Free’s
loving family, became a presence on speakerphone at dinner, and whom she
trusted entirely and above the warnings from her own bank.
“How dare the banks block you from investing your
hard-earned money?” Fischer would say.
“We are going to give you between 12 and 14 per cent every
month on your money. The banks give you, what, 5 per cent a year if you’re
lucky?”
Fischer would ask Free to send him photos of the fish she
had caught in their dinghy and the pair planned for a day when Fischer would
visit Australia, and she could take him fishing and camping, too.
“I just thought he was like God’s gift. To have someone
helping me to be more financially secure [so] that I could help my children. I
just had such faith in him and such belief.
“I’d said to him, ‘I hope you’re always going to be in my
life’. And I said that to him, I think two weeks before he took all of our
money.”
Rather than just silently disappearing with their loot,
scammers will often fake a catastrophic investment event. There’s a strategy
behind this.
“The scammers are constantly trying to stay ahead of any
online complaints or official investigations, so the more delay and confusion
and doubt they can create at the end of these relationships, the safer they
are,” Solomons explains.
“They’ll keep going for as long as they possibly can, and
then there’ll be a decision taken, probably at a fairly high level of a
syndicate… as to when to pull the pin. Typically, it’s by engineering some sort
of fake event, ‘Oh, there’s been a software glitch and we lost all the money’,
or ‘we had a rogue trader who stole your money’.”
Free remembers she was told that Fischer was sick the night
it all came crashing down. A man called Jacob was in his place.
“It was very different to how I’d ever traded before,” Free
recalls. “And he said ‘This is the big one, Janelle. This is where all your
children pay their mortgages off’. And I was so excited… I was counting the
zeros because I’ve never traded with this much money.”
Yet when she logged back into her account the next day,
everything was in the red. Where there had been hundreds of thousands of
dollars in profits, there were now thousands of dollars of losses.
Fischer said he was sorry, and promised he could get her
money back, if only she could find him another $30,000.
“Another 30,000?” Free replied. “Steve, you know I haven’t
got any more money at all.”
Scammers asked Free to take this photo with her driver’s
licence to verify her identity. It illustrates the tactics they used to give
her the impression they were a legitimate investment company.
Several months before, in March, Fischer had convinced Free
to sell her house, spinning her stories about a looming boom in the
cryptocurrency Bitcoin. He said it would bring Free and her family untold
prosperity if she took advantage of it.
Free had purchased the land at Pacific Pines on the Gold
Coast many years ago, and then borrowed, scrimped and saved to build a house on
it. But she’d never been able to afford to live in it.
“The only thing I’ve got left is my house, but that’s what I
live off, that’s my income,” she told Fischer, when he asked her if she had
anything to sell.
Fischer had replied that if she sold her house, she could
buy four houses with the money she was going to earn.
The grandmother of five had more reason to trust him than
most. The fraudsters had been paying back Free a proportion of her investment
to give the impression of genuine profits.
The house sold for $930,000.
Free estimates that once expenses were taken out, there was
about $900,000 left, all sent to Fischer. The scammer also convinced some of
Free’s close friends and relatives to invest. Altogether, the seven victims
lost more than $2 million.
Even after scammers have robbed their victims of their home
and their savings, they’ll still come back for more. This is the next step.
“They call it recovery,” says Maroti, a source based in
Europe who gathers intelligence from informants inside scam syndicates.
He explains that once people have been scammed, they are
often targeted by fraudsters a second time.
They will fleece them again, perhaps by tens of thousands of
dollars, telling them a fake story that they have retrieved their lost funds,
and need to pay international tax for the money to be transferred.
A recovery scam advertisement from social media.
Since she realised she was scammed, Janelle Free has been
contacted by two individuals promising they will get her money back. One of
them goes by the name Daniel Saunders, and is part of the initial group of
scammers.
Where Fischer charmed everyone, Saunders is abrasive and
rude.
He has asked Free for more than half a million dollars so
that she can reclaim the lost money and continue trading.
“Without signing the documents, I can’t give you the money
back!” he once yelled. “Is that clear?”
Free had been stringing along the fraudster with false
promises her children would take out their superannuation, hoping to gain some
information that might help authorities catch those responsible.
Since reporting the scam, Free says she has spoken to
someone from the Australian Federal Police twice, but is frustrated they
haven’t been able to track down the scammers.
“I don’t feel there’s been enough effort put in,” she says.
Ken Gamble, executive chairman of IFW Global, says he has
forensically linked the syndicate that targeted Free and her associates to an
Israeli criminal group with call centres in Cyprus, Bulgaria and Serbia.
Mitch says some scammers justify their actions a bit like a
drug dealer would. If they weren’t doing it, someone else would. That their
victims are stupid, and would lose their money eventually anyway. That they’re
“sheeps” [sic] whose wool is for cutting.
Others are somewhat reluctant fraudsters dealing with
difficult personal situations.
“You have people who have family members that are on tubes,
and they don’t have money to pay for treatment,” he says.
“If I go to them and tell them, ‘Hey you’re going to work
for [€] 2000 ($3257) a month’, and they’re working for 300, for example… Would
you continue working for 300 and look at your family member die in front of
your eyes? Or would you, you know, say ‘F--- it, I’m gonna get my hands dirty
and try to save them’.”
Ramon admits that the guilt from his job weighs less heavily
on him these days. Part of that is due to his work as an informant. He passes
on information to private investigators in the hope it could help victims
regain some of their losses. His heart has hardened, too.
“For my first few years, I’m not really having great nights
sleeping, but the way these guys actually help us out in being numb with what’s
going on is that they always tell us that, ‘Hey, remember, these guys have
millions and millions in worth, so they’re OK losing this money’.”
Of course, this is just another one of the scammers’ lies.
Despite her ordeal, Janelle Free appears warm, talkative and
bubbly. She’s made a career of cutting people’s hair and “talking to people”,
sharing in their worries and stories.
Asked how she has managed to stay so upbeat, Free offers
that she is on medication, wracked with guilt for putting the people she loves
the most in the path of a charlatan. Her children fret about her and reassure
her that it’s “just money”.
“I just wanted to leave them better off than I ever was. I
didn’t want a helicopter or a plane, I just wanted to pay off my children’s
mortgages. And now I’ve got nothing, nothing for them,” says Free, her voice
breaking.
Here is the
link:
https://www.theage.com.au/business/consumer-affairs/psychopaths-are-the-best-confessions-from-inside-the-scam-industry-20241113-p5kqey.html
It is hard
to think of much to add, other than to say it pays to be very alert when
gathering information from the web. Some of it will not be quite as it seems!
David.
