Europol: affiliate marketing is a key pillar of online investment fraud ecosystem
Two individuals have been arrested as authorities in Europe and Israel focus on companies associated with advertising campaigns for fraudulent online investment platforms.
Authorities in Europe and Israel have targeted companies and suspects involved in deceptive social media advertising campaigns as part of an effort to dismantle a large-scale cryptocurrency fraud and money laundering scheme, which reportedly deceived thousands with fake online investment offerings.
As a result of coordinated actions by law enforcement in Belgium, Bulgaria, Germany, and Israel in November, two arrests were made and additional suspects were questioned, as stated by Europol on Thursday.
The European Union’s law enforcement agency described it as the second phase of an operation that in October resulted in nine arrests in Cyprus, Germany, and Spain connected to the laundering of illicit funds from fraudulent cryptocurrency investment platforms.
At that time, 600 million euros ($699 million) had been laundered by the network, according to Eurojust, the EU agency for criminal justice cooperation. Europol now estimates the amount at 700 million euros ($816 million).
Sebastian Bley, senior specialist in economic crime at Europol, told OCCRP that the targeted network had a “corporate structure,” including departments managing infrastructure, sales, advertising, money flows, and money laundering. He stated that the network had defrauded individuals on an “industrial” scale.
The criminal network allegedly enticed scam victims through online advertisements, social engineering via criminal call centers, and fraudulent cryptocurrency investment platforms promising high returns.
Once victims transferred their cryptocurrency, the funds were stolen and laundered across various blockchains and cryptocurrency exchanges, Europol reported.
The November operations targeted companies and suspects that Europol identified as part of an “affiliate marketing” infrastructure using false advertising to support the online scams. Europol stated that affiliate marketing was a “key pillar of the investment fraud ecosystem.”
Online advertisements for fraudulent investment schemes impersonating celebrities, politicians, and reputable media outlets, often featuring deepfake videos, have become a “significant challenge” worldwide, Europol indicated, with data from potential investors then used to defraud them.
Europol did not disclose the names of any suspects or companies targeted. No details were provided about where the two arrests took place.
In March of this year, the Scam Empire investigation led by OCCRP and Swedish Television (SVT) uncovered how affiliate marketers provided contact details of potential investors to scam networks for lucrative commissions.
The investigation demonstrated how individuals were lured by advertisements for quick money-making investment schemes on mainstream websites and social media platforms, often using fake news articles with supposed celebrity endorsements. If they signed up, their details were passed to scammers.
Scam Empire was based on 1.9 terabytes of leaked data obtained by SVT and revealed how two groups of call centers, located in Israel, Eastern Europe, and Georgia, convinced individuals worldwide to make “investments” totaling at least $275 million.
Europol could not verify whether the network targeted by its recent operations overlapped with the Israeli/European group exposed in the Scam Empire investigation.
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