SAN FRANCISCO – Fraudsters who use LinkedIn to lure consumers into cryptocurrency investment schemes pose a “significant threat” to the platform and consumers, according to Sean Reagan, an FBI special agent in charge of field offices in San Francisco and Sacramento, California. .
“This is a significant threat,” Ragan said in an exclusive interview. “This type of fraud is significant and has many potential victims and many past and present victims.”
Sean Reagan, FBI Special Agent in charge of the field offices in San Francisco and Sacramento.
The scheme works as follows: a fraudster posing as a professional creates a fake profile and connects to a LinkedIn user. The scammer starts with light conversations through messages on LinkedIn and eventually offers to help the victim make money through a crypto investment. Victims interviewed by CNBC say that because LinkedIn is a reliable platform for business networks, they tend to believe that the investment is legal.
The fraudster usually directs the user to a legitimate cryptocurrency investment platform, but after gaining their trust for several months, tells him to move the investment to a site controlled by the fraudster. The funds are then drained from the account.
“So criminals make money that way, that’s what they focus their time and attention on,” Ragan said. “And they always think of different ways to chase people, to chase companies. And they spend their time writing their homework, defining their goals and strategies, and their tools and tactics.”
Reagan said the FBI had noticed an increase in this particular investment scam, which is different from a long-standing scam in which the criminal pretends to be romantically interested in the subject to persuade them to part with their money. The FBI confirmed that there were active investigations, but could not comment because they were open cases.
In a statement, LinkedIn acknowledged that there was a recent increase in fraud on its platform, telling CNBC that “we are implementing our policies, which are very clear: fraudulent activities, including financial fraud, are not allowed on LinkedIn. We work every day to keep our members safe, and that includes investing in automated and manual protection to detect and deal with fake accounts, fake information and suspected fraud. “
“We work with partner companies and government agencies around the world to protect LinkedIn members from bad participants. If a member encounters or falls victim to fraud, we ask that they report this to us and to local law enforcement. “
Oscar Rodriguez, LinkedIn’s senior director for trust, confidentiality and justice, said “trying to identify what’s fake and what’s not is incredibly difficult”.
“One of the things I would really like to do more is get into proactive member education,” Rodriguez said. “Informing members or, in essence, allowing them to understand the risks they may face.”
The company says it has removed more than 32 million fake accounts from its platform in 2021, according to its semi-annual fraud report. From July to December 2021, its automated protections stopped 96% of all fake accounts – including 11.9 million that were suspended during registration and 4.4 million that were proactively restricted, the report said. Members reported 127,000 fake accounts, which were also removed.
LinkedIn said its automated protection caught 99.1 percent of spam and fraud, a total of 70.8 million, over the same period. Another 179,000 were removed after members announced them. LinkedIn said it did not provide estimates of how much money had been stolen from members through its platform.
The company warned users in a blog post on its platform on Thursday night not to send money to people they don’t know and to respond to accounts with questionable work histories or other red flags, such as bad grammar.
That’s a small consolation for May Mae Soe, a benefits manager in Florida who says she lost $ 288,000 – her entire life savings – to a LinkedIn scammer. She started innocently enough with someone whose profile said she was a manager at a fitness company in Los Angeles who wanted to contact her last December. They started chatting first on LinkedIn and then on a messaging app, and she said she was intrigued by his offer to help her make money.
May May Soe, victim of fraud
“He asked me if I was on LinkedIn for a professional network or looking for a job,” Sow said. “I never trust anyone, but we started talking and over time he gained my trust.
Sow said when the conversation finally turned to investing, “he showed me how to make a profit from his investment and told me that I should start investing with crypto.com, which I know is a legitimate website. I started with $ 400.
The fraudster persuaded her to move her investment to an object he controlled. In a few months, Soe will make a total of nine transactions, which include bank loans and money borrowed from friends, hoping to use his income to start a small business. But Sow would soon learn that the relationship she made on LinkedIn was not what he said it was. In the end, she lost all her resources.
“I still remember the day,” Sow said. “Once I realized I had been deceived, I tried to contact him, but I couldn’t find him anywhere. I work hard, and every dollar I save, I work hard to save it. It hurts.”
She said she never thought she would be cheated on LinkedIn.
Crypto.com said it was immediately removing accounts it found to be fraudulent.
“We are taking a proactive approach to managing and protecting against external threats, including fraud and phishing campaigns,” CNBC said in a statement. “As with all financial transactions, fiat or crypto, it is crucial to ensure that the account receiving the funds is legitimate and its owner is identified and trusted before the transfer.
Soe’s story is not unique. A group of victims cheated on LinkedIn, who meet regularly at Zoom, recently invited a CNBC reporter to join the session, as long as the faces of the participants are hidden and their names are not revealed. Their losses range from $ 200,000 to $ 1.6 million.
“We just never thought there could be such malicious intent behind a LinkedIn account,” said a victim who lost $ 350,000.
“Fraudsters are hiding behind successful companies,” said another victim, who lost $ 200,000. “One of the biggest reasons he accepted the invitation was the man who said in his profile that he worked for a legitimate company.”
“We lost a lot of money,” said a victim who lost $ 700,000. “And it’s not just all our savings, people have lost their houses and their car loans. It’s ruining lives and crushing the soul.”
Ragan said he understood the victims’ pain, but they should not be blamed.
“It’s not their fault they were victims,” Ragan said. “It’s the perpetrator’s fault. It’s the criminal’s fault. They spend their nights and days thinking of ways to persecute and deceive people. This is how they earn their money through illegal profits. And the people who fall victim to that are victims. “
The Global Anti-Fraud Organization, a victim advocacy and support group, tracked most perpetrators to Southeast Asia.
“They usually target victims on LinkedIn, showing that they have a certain entrepreneurial spirit,” said Grace Ewan, a spokeswoman for the Global Anti-Scam Organization. “They may claim to have graduated from a well-known university and then say they are in finance or investment. Sometimes they even pretend to be in the same industry as you.”