‘Industrial-scale fraud’–Financial crime on huge scale


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Financial Crime fraudsters leverage cryptocurrency, banking in high-pressure schemes

Described by journalists as “industrial-scale fraud,” Eastern European call centers are elevating financial-crime fraud to intense new levels.

The Organized Crime and Corruption Reporting Project recently published extensive reporting on these scam call centers proliferating across Eastern Europe. Described as “boiler-room scams,” high-pressure telephone pitches offer high returns on binary-trading investments and fake cryptocurrency exchanges. And once scam victims take the initial bait, they are hounded for more.

OCCRP describes Israel as the former center of these types of scams, but leaders there cracked down on this type of global fraud in 2017. Scammers at that point developed locations in former Soviet republics and elsewhere in Eastern Europe.

The amounts gained through this type of fraud are staggering. Spanish authorities describe an investigation of an Albania center targeting Spanish citizens. The estimated profit was over half a billion Euros a year.

A Kyiv-based center working on behalf of the allegedly fraud-ridden “Milton Group” netted over $65 million in 2019. And revelers at a company party surveilled by undercover operatives bragged about their aggressive tactics to frighten victims, especially seniors, into compliance.

Money-transfer methods included Western Union, cryptocurrency accounts, bank accounts, and credit cards. And scammers used various personae to extend relationships with victims. These included posing as tax authorities, money-laundering authorities, and so on.

Part of the challenge of shutting down these “industrial-scale fraud” centers lies in the global nature of their telephone and internet crimes. Those types of cross-border investigations require a level of coordination and cooperation difficult to achieve.

Moreover, victims can be difficult to dissuade given the lure of easy money. A cybercrime specialist from a Nordic bank described his firm’s efforts to warn their customers. But he said the combination of the convincing salespeople and the use of fake but fancy websites give people a false sense of security, especially when high investment returns lure them in.

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