US, Australia Expose $100 Million International Cyber Scam

Investigators from NSW Police and AFP Cybercrime Operations Eastern Command execute a search warrant at the Pyrmont residence of two 19-year-old Chinese nationals in Sydney, Australia, on Oct. 20, 2022. Courtesy of NSW Police/AFP

The Australian Federal Police (AFP) has charged four Chinese nationals over their involvement in a sophisticated international scam operation following an investigation conducted with the help of the U.S. Secret Service (USSS).

On Dec. 9, the AFP announced the result of a months-long probe into an organised crime syndicate employing a highly-sophisticated form of cyberscam, which caused more than US$100 million in losses worldwide.

The law enforcement agency said it charged four Chinese men with dealing with the proceeds of crime-related offences.

The men are scheduled to appear in the Downing Centre Local Court in Sydney in January 2023.

Scam Operation

In August, the AFP received a tip from the USSS about Australian links to a scam operation inside the United States.

The agency then started an investigation with the New South Wales (NSW) Police Force, which seized more than $22 million in 24 bank accounts allegedly linked to the criminal syndicate.

The AFP found that the criminal group employed sophisticated social engineering techniques, including the use of dating sites, employment sites, and messaging platforms to gain victims’ trust before luring them to invest in foreign exchange and cryptocurrency through a financial investment service.

The group then manipulated data provided through the legitimate application to show the victims a false positive return on their investments while concealing the fact that their money had actually been stolen.

The majority of the scam victims were based in the United States, and police estimated that the financial losses amounted to more than $100 million.

A user checks the dating app Tinder on a mobile phone in Islamabad, Pakistan, on Oct. 6, 2020. Aamir Qureshi/AFP via Getty Images

In this scam operation, the syndicate allegedly recruited Chinese nationals living in Australia, mostly students, to build the necessary infrastructure for their fraudulent activities.

Specifically, the accomplices were used to register companies in Australia, enhance the legitimate appearance of the scam operation, and create Australian business bank accounts to launder money.

As the investigation progressed, the AFP arrested two 19-year-old men at their Sydney residence in October and charged them with recklessly dealing with the proceeds of crime.

Two other Chinese nationals, aged 27 and 24, who are believed to be the Australian controllers of the syndicate, were later arrested at Sydney and Melbourne Airports while trying to board their one-way flights to Hong Kong on Nov. 24.

Each of them was charged with one count of dealing in proceeds of crime with the amount of money worth $10 million or more and could face a maximum prison term of 15 years.

Authorities Response

Following the arrest of the criminal suspects, USSS attache Ike Barnes said the joint investigation was a prime example of the collaboration between enforcement agencies to deal with transnational criminal organizations.

AFP Cybercrime Operations Eastern Command Detective Sergeant Salam Zreika said significant numbers of people were falling victim to cyber scams every day.

She also warned Australians to take precautions when dealing with people on the internet.

“It is essential people exercise the utmost caution if cold-approached online or on the phone by people trying to sell financial or investment services,” Zreika said.

“Refrain from investing in foreign exchange, cryptocurrency, or speculative investments with people you’ve only ever encountered in the online environment. If you are unsure, get a second opinion from a professional, in person.”

Echoing the sentiment, NSW Police said scams are getting more sophisticated, and many vulnerable members of the community fall victim to these fraudulent activities.

“The people behind these scams have zero concern for those members of the community who may have lost their life savings or have been financially crippled,” Detective Superintendent Martin Fileman said in a statement.

“People need to take extra care to protect themselves: the old adage, if it sounds too good to be true, it probably is.”

While four suspects have been charged, the investigation is still ongoing as police try to discover the true scope of the fraud in Australia.

Warning Over Christmas Scams

In a related development, the AFP warned Australian consumers to stay alert to fake delivery scams during Christmas, as cybercriminals may take advantage of the occasion to exploit people if they’re less attentive to details.

AFP Commander Cybercrime Operations Chris Goldsmid said the scam could involve cybercriminals impersonating legitimate parcel delivery services to send fraudulent messages to trick consumers into clicking on URLs containing harmful malware or providing personal information.

“This may include a technique called ’spoofing' in which cyber criminals make their messages look legitimate by using real company logos and fake sender details,” he said.

People shop at Chadstone during the Boxing Day sales in Melbourne, Australia, on Dec. 26, 2021. Diego Fedele/Getty Images

Goldsmid said the fake messages often instruct consumers to click a link to track their package, confirm their delivery address, or collect their delivery.

The link then leads consumers to a fake company website where they’re asked to enter their personal or financial details.

Goldsmid advised Australian consumers to verify the legitimacy of the messages they receive to identify scams.

“Most delivery services will never text or email their customers to request personal or financial information,” he said.

“If something doesn’t feel right, take the time to verify the request with the organisation using the contact information listed on their website.”

Hints that suggest a message is fake include requests for personal or financial information to confirm delivery order, an unexplained sense of urgency in the request, grammatical errors, and suspicious URLs.