INTERPOL Financial Fraud Report: The Global Threat Expands Boosted By Technology

Organized Crime Groups using more Human Trafficking Victims to carry out Crypto-Investment (‘pig-butchering’) and other Scams

Authors:
•  SCARS Editorial Team – Society of Citizens Against Relationship Scams Inc.
•  INTERPOL

About This Article

The recent INTERPOL assessment on global financial fraud underscores the growing threat posed by technology-enabled organized crime groups targeting victims worldwide.

Utilizing tools like Artificial Intelligence (AI), large language models, and cryptocurrencies, these groups orchestrate sophisticated fraud campaigns with minimal technical skills and at low costs. Secretary General Jürgen Stock warns of the epidemic scale of financial fraud, emphasizing the need for urgent action and enhanced information sharing.

The report reveals prevalent fraud trends such as investment fraud and romance fraud, necessitating multi-stakeholder partnerships to develop effective counter strategies. With financial fraud increasingly perpetrated by transnational networks, law enforcement faces the challenge of strengthening data collection and analysis to combat this escalating crime.

Regional trends highlight the pervasive nature of financial fraud, from Africa to the Americas, Asia, and Europe, necessitating a coordinated global response to safeguard individuals, businesses, and governments against this evolving threat.

A new INTERPOL assessment on global financial fraud highlights how the increased use of technology is enabling organized crime groups to better target victims around the world

The Interpol report and assessment show that the use of Artificial Intelligence (AI), large language models, and cryptocurrencies combined with phishing- and ransomware-as-a-service business models have resulted in more sophisticated and professional fraud campaigns without the need for advanced technical skills, and at relatively little cost.

SCARS Introduction

With the rapid advancement of technology, according to INTERPOL, financial fraud has evolved into a global epidemic, as highlighted by the recent INTERPOL assessment below.

Organized crime groups are leveraging sophisticated techniques, including Artificial Intelligence (AI), large language models, and cryptocurrencies, to orchestrate increasingly professional and widespread fraud campaigns. The emergence of AI and cryptocurrencies has lowered the barrier to entry for criminals, enabling them to conduct fraudulent activities with minimal technical expertise and at a relatively low cost.

The INTERPOL Secretary General, Jürgen Stock, warns of the urgent need for action to combat this growing threat, emphasizing the importance of closing existing gaps and promoting information sharing between sectors and across borders. The report, introduced at the Financial Fraud Summit in London, unveils key findings, including prevalent fraud trends such as investment fraud, romance fraud, and business email compromise.

To address these challenges effectively, the report calls for the establishment of multi-stakeholder Public-Private Partnerships and emphasizes the critical role of enhanced data collection and analysis in developing informed counter strategies. Regional trends reveal the pervasive nature of financial fraud across continents, from Africa to the Americas, Asia, and Europe, underscoring the need for a coordinated and collaborative approach to combat this global menace.

INTERPOL 2024 Assessment

Analysis behind the INTERPOL Global Financial Fraud Assessment also points to the global expansion of human trafficking for the purpose of forced criminality in call centres, particularly to carry out ‘pig-butchering’ scams – a hybrid scheme combining romance and investment frauds, using cryptocurrencies.

INTERPOL Secretary General Jürgen Stock said:

“We are facing an epidemic in the growth of financial fraud, leading to individuals, often vulnerable people, and companies being defrauded on a massive and global scale.

“Changes in technology and the rapid increase in the scale and volume of organized crime has driven the creation of a range of new ways to defraud innocent people, business and even governments. With the development of AI and Cryptocurrencies, the situation is only going to get worse without urgent action.

“It is important that there are no safe havens for financial fraudsters to operate. We must close existing gaps and ensure information sharing between sectors and across borders is the norm, not the exception.

“We also need to encourage greater reporting of financial crime as well as invest in capacity building and training for law enforcement to develop a more effective and truly global response.”

The report is being launched by the Secretary General at the Financial Fraud Summit, organized by the UK government in London.

Key Findings

Other key findings of the report, which is for law enforcement use only, include:

• The most prevalent global trends are investment fraud, advance payment fraud, romance fraud and business email compromise
• Financial fraud is most often carried out by a network of co-offenders, varying from highly structured to loosely affiliated.
• An urgent need to strengthen data collection and analysis in order to develop more informed and effective counter strategies.

To effectively address this globally escalating crime and bridge crucial information gaps, one of the report’s recommendations is the need to build multi-stakeholder, Public-Private Partnerships to trace and recover funds lost to financial fraud.

Since the launch of INTERPOL’s Global Rapid Intervention of Payments (I-GRIP) stop-payment mechanism in 2022, the Organization has helped member countries intercept more than USD 500 million in criminal proceeds, stemming largely from cyber-enabled fraud.

Regional Trends in Financial Fraud

Africa

Business Email Compromise remains one of the most prevalent trends in Africa, however there is increasing use of the pig butchering fraud. Cases of this fraud type have been identified in West and Southern Africa targeting victims in other jurisdictions beyond the continent.

Certain West African criminal groups, including the Black Axe, Airlords and Supreme Eiye, continue to grow transnationally, and are known to have extensive skills in online financial fraud such as romance fraud, investment fraud, advance fee fraud, and cryptocurrency fraud.

Americas

The most common types of fraud across the Americas are impersonation, romance, tech support, advance payment, and telecom frauds.

Human trafficking-fuelled fraud continues to be a growing crime phenomenon. The INTERPOL coordinated operation, Operation Turquesa V, revealed that hundreds of victims were trafficked out of the region after being lured via messaging apps and social media platforms and coerced to commit fraud, including investments frauds and pig butchering.

There is emerging evidence that Latin-American crime syndicates such as Commando Vermelho, Primeiro Comando da Capital (PCC) and Cartel Jalisco New Generation (CJNG) are also involved in the commission of financial fraud.

Asia

Pig butchering fraud schemes initiated in Asia in 2019, and expanded during the COVID-19 pandemic. Subsequently, Asia has emerged as a focal point, with criminal organizations in poorer countries across the region employing business-like structures.

Another fraud type that has experienced a surge in recent years in Asia is a type of telecommunication fraud where perpetrators impersonate law enforcement officers or bank officials to trick victims to disclose their credit card or bank account credentials or to hand over huge amounts of money.

Europe

Online investment frauds, phishing, and other online financial fraud schemes have escalated on carefully selected targets to maximize profits. Mobile phone apps are also being targeted by cybercriminals.

The criminal networks involved in these online schemes often display sophisticated and complex modi operandi, which are usually a combination of different fraud types.

Pig butchering, predominantly carried out of call centres in Southeast Asia, is also on the rise.

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