Spanish police arrest six over $20M AI-powered investment scam

Authorities in Spain have arrested six people who helped operate a global AI-powered investment scam that stole over $20 million from at least 208 victims. 

The scammers would swindle victims up to three times. After stealing an initial sum through the investment scam, the fraudsters contacted victims twice more, masquerading as investment managers and then as authorities, offering to recover the stolen funds for a fee, Spanish police said in an April 7 statement. 

The scammers used deepfake ads of “national personalities” promising high returns on crypto investments, and would occasionally pose as financial advisers or even feign romantic interest to lure in victims.  

Experts have been warning of a rise in AI-enhanced scams. Blockchain analytics firm Chainalysis said in its Feb. 13 Crypto Scam Revenue 2024 report that generative AI is making “scams more scalable and affordable for bad actors to conduct.”

“Victims were not selected randomly; instead, algorithms selected those whose profiles matched the cybercriminals’ searches,” Spanish police said.

“Once they selected their victims, they placed advertising campaigns on the websites or social networks they used, offering them cryptocurrency investments with high returns and zero risk of asset loss — investments that, obviously, turned out to be a scam.” 

When victims could not withdraw the funds, most realized it was a scam, according to Spanish police; however, the ruse didn’t end there. 

Scammers would trick victims again with follow-up scams

The cybercriminals would then contact victims again, posing as investment managers, claiming the stolen funds were frozen and could be recovered if they paid a deposit. 

“The victims, hoping to finally recover their money, made the deposit without realizing they had been scammed again,” Spanish police said.

The scammers would then contact victims a third time, this time posing as Europol agents or lawyers from the United Kingdom, offering to return the stolen funds if the victim paid the corresponding taxes in the country where it was blocked.

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Spanish authorities arrested six people involved in the syndicate, charging them with fraud, money laundering and falsifying documents in a criminal organization. 

During a raid on the alleged leader behind the scam, Spanish authorities seized numerous cell phones, computers, hard drives, a simulated weapon and extensive documentation. 

Several people linked to the plot have also been identified in other countries, and the syndicate allegedly created a large number of fake companies to channel the stolen funds.  

“Furthermore, the members of the organization used multiple false identities. In the case of the leader, for example, he used more than 50 different identities,” Spanish police said.

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