Updated: Nov 17
Online love scams are dramatically on the rise, and are one the greatest tragedies, leaving a trail of both financial and emotional destruction in their wake to victims that find themselves trying to deal with the fallout of these elaborate schemes.
The South China Morning Post recently reported that Hong Kong based victims lost a staggering three billion Hong Kong dollars in 2021 to fraudsters ‘promising love, jobs and sex’.
So, what can victims do to prevent themselves from both becoming victims in the first place, and if they tragically do fall foul to these global organised crime groups, how do they respond to the fallout of the scam in a way that could see some of their money returned.
Tragically, it is the case that most victims of these types of offences leave it far too long to report the matter to either police or investigation firms like I-OnAsia because of the sheer sense of shame that they feel from handing over such eye watering amounts of money with little to no due diligence being carried out. Sadly, it is also the case that in most scenarios of online love scams, the monies lost are rarely recovered to the same extent and speed that they were given away at.
Prevention is far better than cure, and as a global community we need to work together to fight what is a growing market for bad actors all over the world taking advantage of those that are desperate for a lifelong companion.
In this Q & A session, I-OnAsia’s Chairman, Derek Elmer outlines what the key warning signs are in these online scams, the regular modus operandi he and his global team see in these investigations, and how expert due diligence can help spot the swindlers!
Derek has spent over 20 years leading his team of global investigators, uncovering their conduct, establishing the facts and supporting victims of classes of fraud and deception.
Why has this type of onoine offending increased over the last few years Derek?
That’s a brilliant question, and sadly it’s my belief that as a result of Covid and people remaining at home because of lock downs and tight restrictions around visiting licensed premises, coffee shops and other populated areas, people have not been able to go out and interact with others, and as a direct result, more and more people have turned to the internet and social media sites to seek out the much-needed human interaction that we all need, and yearn for.
All the time these nefarious individuals, ‘the scammers’ have recognised this, and have identified an opportunity to make money out of vulnerable people by making approaches using fake social media platforms to start a conversation with a person in an attempt to strike up a ‘virtual relationship’.
These relationships are then nurtured by the scammers over time, building a trust between them and their victim in order that they can then obtain monies from their victims for investments, personal reasons and other excuses given to compel the victim to send their hard earned money, sometimes tens of thousands.
In your experience Derek, how are victims commonly losing their money in these scams, do you have any examples you can give us?
So, there are a few methodologies that are used by these online scammers, and certainly we’ve seen a number of these different methods in action, which have cost victims and our clients, millions and millions of dollars.
One of the most worrying and destructive methods we’ve seen at I-OnAsia, is the approach made to female victims through fake Instagram and social media accounts presented as a not so well known ‘celebrity’, who strikes up a conversation after finding their profile online, and then after a number of early exchanges introduces the victim to their management team.
The management teams’ job is then to setup a meet and greet, which the victim is charged for, even after the approach was made by the alleged celebrity who outlines that he has found the victim attractive and someone they wish to get to know more. These meet and greets to get to know the victim better, can cost up to $10,000 USD of a victims savings, but with the sudden approach by someone with a profile, victims in more cases than not, hand over the sum to have this meeting.
This is where the immediate red flags should be hitting home, but all to often they don't. This is an approach by someone the victim doesn't know and who wants to charge the victim to meet them so that they can get to know each other…. Where else would this happen face to face you have to ask yourself, we wouldn't do it in a bar, so why online...
Money is then requested by the management team to be transferred to a personal beneficiary, and this beneficiary could be based anywhere in the world, we’ve seen transactions to accounts here in Hong Kong, to Turkey, the United States, the United Kingdom and Singapore to name just a few.
Again, a huge red flag, transferring money to someone who is not part of the conversation or based in a jurisdiction which has no connection to the person the victim is talking to should alert the victim to an immediate problem.
Again, tragically this goes on for some time, victims often fly to meet these fake characters often to be let down with the alleged celebrity not turning up, and, as a result a rather weak reason for not turning up being given to the victim, all part of the big story of fame and travel.
The communications continue for some time, and the scammers eventually build up the rapport with the victims so much that they have their victim investing in film and music opportunities of the character they've created. These investment amounts can vary, but our teams in London, New York and here in Hong Kong have seen investments made from $50,000 USD, to $350,000 USD, again to personal beneficiaries with names totally unrelated to the character and into countries with no relation to the person of interest.
Then, as is all to often in any online scam, the move is made by the scammers to a trading platform where the victim is persuaded that the fruits of their labour from the investments will be made available, but only after they pay further fees to have this money released, dressed up as taxes, management fees or holding fees. These fees can range again from $5,000 USD up to $20,000 USD. It is around this time that the scam may have been going on for some months and the victim is either running out of money, or has run out completely and seeks advice from either a lawyer or an investigations agency like I-OnAsia for help on something they believe has now become an issue for them that they cant control.
Sadly, it does not take too long for our cyber analysts and fraud investigators to piece together that the client has fallen victim to a complex online love scam which has cost them vast sums of money.
We then move quickly to investigations mode, and importantly, support mode, this is often a very distressing time for the client come victim who comes to terms with that they have done, and that they are in fact a victim of a sophisticated online scam.
Okay, so you identify the scam, how easy is it to track down the perpetrators and get the victims money back? And should the police get involved?
Another great question. And one which isn't always straight forward to answer.
So sadly, we are finding more and more occasions where law enforcement agencies do get notified, but because of their already overwhelmed criminal investigation departments we are seeing more and more cases where they cant assist as the scams aren't big enough in value to wet their appetite to investigate these matters to the full, and when they do choose to investigate matters, jurisdictional issues often provide a barrier very early on, adding layers and layers of complexity to the polices investigations, who then have to navigate complex cross jurisdictional matters where cooperation with other jurisdictions is not always a given, and sadly more often than not policing agencies simply just don't have the resources to help these victims of crime in a timely manner.
In the UK Action Fraud is one way victims of these online scams can report their matters for assessment and allocation. However, regardless of where a victim reports these crimes, they will take time to investigate, and sadly time that a victim doesn't have.
So yes, the police should always be notified, but sadly the process can be so long and frustrated that the private sector is engaged to get answers to the Who, What, When, Why and How far quicker than the police can.
The first thing our team at I-OnAsia do is develop a rapid investigative strategy to help guide the victim through what is often a very complex issue. Through the use of our global cyber analysis capability, our team will get all the data possible to try and piece together who these entities are that they have been communicating with, analysing email accounts, mobile phone numbers, social media accounts, and other critical communication data which builds an immediate picture of what has gone on, an how big it is.
In any investigation there are always conflicting priorities, essentially what is the most important evidence that one needs to identify first, and make a priority. The answer to this is whatever is going to be lost the quickest and provide the most evidential value should always be given absolute priority.
In these cases its often the money and the beneficiaries which are the most important priority as the funds can be transferred out of accounts, often into crypto currency very rapidly and then those accounts shut down. Once this process is well established by the scammers it can become harder and harder to track down the funds which have been lost.
Importantly though, the list of beneficiaries that the funds have been sent too is important to assess quickly, often these are people that have been used by the crime gangs, aka 'the scammers' to launder their proceeds, are people that are in need of money, fallen on hard times or have debts they cant repay, all are sadly scenarios where people see this as a way to earn money quickly by taking a small percentage from the funds that are deposited into their accounts and then in return they move the funds on to their next financial home before being tumbled again no doubt out of those accounts.
In any case, the longer this process takes to start the harder and harder it can be to ever see the lost funds again, these money mules could be the key to identifying the real perpetrators in this elaborate crime.
Instructing legal counsel early can also be a critically important factor, the strategy that will equally have a huge impact on the success of this matter will be that of the legal strategy. As soon as persons of interest are identified, it is always important to understand the legal mechanism's which can be enacted to make a difference. Third party disclosure orders on financial institutions are an example of a mechanism which can be very effective if grounds exist to have such an order approved by the court.
So there are options, but the critical point is that victims need to act quicky.
So, we've spoken about the common scams you see Derek, We've heard about the response and the need to act quickly, and why this all goes on, but how can we prevent it!
Certainly, as much as we are in business to investigate these matters and a variety of other investigational scenarios when things go bad, its very upsetting to see people lose millions and millions of their life savings from not doing their due diligence. They can cost thousands and thousands of dollars to investigate, on top of what the victim has already lost. Sometimes this just not possible for victims who are left lost and with nowhere to go. Its tragic, it really is.
Prevention is far better than cure, and the team at I-OnAsia and I would much prefer to give clients the answers to due diligence questions as to who someone actually is, rather than manage and respond to the fallout from a client not carrying out their due diligence. Sadly we live in a world where people lie to gain a benefit and to cause great pain on others so as to benefit themselves. For a very reasonable fee our global team of experts can carry out discreet investigations getting to the bottom of these profiles, the people behind them and whether there are serious risks of the client loosing large sums of money to scam profiles.
We can answer these questions, and we will give you the facts that we find. Facts that allow people to make the right decisions.
Since 2001, our Chambers Ranked Investigations and Intelligence advisory, I-OnAsia has been carrying out due diligence investigations for clients all over the world, from financial transactional due diligence, Pre IPO due diligence to private client due diligence, and with all these years of experience and 18,000 cases later, we've gathered a vast array of experience in identifying those that seek to cause harm to others.
We know that from time to time these large scam matters will crop up, but the frequency to which they are is concerning, and there is a way to prevent a fall out, by being pro active and challenging unusual requests, and importantly asking for HELP!
Check, Check and Check again !