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Four Chinese nationals charged over investment scam amounting to over $100m in worldwide losses

Four Chinese nationals face charges in Sydney over an investment scam scheme that cost victims more than $100 million.

The men, aged 27, 24, 19, and 19, are accused of being involved in a cyber-enabled investment scam, which included “the unlawful manipulation of legitimate electronic trading platforms, normally licensed to foreign exchange brokers who then provide the software to their clients.”

Threat actors employed a variety of tactics, such as social engineering techniques via the use of dating sites, employment sites, and messaging platforms, to familiarize themselves with the victims – who were primarily based in the United States – before proposing investment options.

Those who fell for the scam ended up on both fraudulent and legitimate investment applications that deal in foreign exchange and cryptocurrency. The criminals altered those apps to show a false positive return on investments.

This way, scammers would encourage further investment, which jointly amounted to over $100 million in losses worldwide. These estimates are based on victim reports and analysis.

A variety of Chinese nationals – mostly students – living in Australia were recruited to participate in building the cybercriminal infrastructure required to carry out malicious activities.

The Australian Federal Police was first notified about the gang’s alleged activity in August 2022 by the United States Secret Service (USSS). This set off an investigation dubbed Operation Wickham in cooperation with the New South Wales Police Force.

As of now, the police force has frozen $22.5 million in 24 bank accounts potentially linked to the cybercriminals, although the investigation is ongoing.

“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. Criminals are ruthless and will stop at nothing to take your money,” AFP Cybercrime Operations Eastern Command Detective Sergeant Salam Zreika said.

The men will appear in Downing Centre Local Court in January 2023. It will be alleged that they took part in registering Australian companies with the Australian Securities and Investments Commission (ASIC) to increase credibility in order to commit fraud and set up bank accounts to then launder the earnings.

Two 19-year-old Chinese nationals in Pyrmont will be charged with one count each of recklessly dealing with proceeds of crime following a search at their residence.

Two other men, aged 27 and 24, were arrested while attempting to flee to Hong Kong – they are suspected to be Australian ‘controllers’ of the syndicate. They are both charged with one count of dealing in proceeds of crime – money or property worth $10,000,000 or more – and face up to 15 years in prison.

“The people behind these scams have zero concern for those members of the community who may have lost their lifesavings or have been financially crippled. People need to take extra care need to protect themselves: the old adage, if it sounds too good to be true, it probably is,” NSW Police Sydney City Police Area Commander, Detective Superintendent Martin Fileman, said.

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