Ukrainian Cyber Police arrest four men in €4.3 million Crypto scam

Ukrainian cyber police announced on Friday that they arrested four men in Ukraine suspected of running fraudulent call centers. The suspects included the group’s alleged leader and three accomplices. Officers carried out searches across the Kyiv, Vinnytsia, Zaporizhzhia, and Ivano-Frankivsk regions.

The scheme stole more than €4.3 million, or $4.8 million, from German citizens through fake cryptocurrency investments. Posing as financial advisers, the suspects convinced people across the European Union, especially Germany, to put money into cryptocurrencies and stocks on fake online platforms. The suspects ran call centers throughout Ukraine, according to Ukraine’s Cyber Police.

Once they gained victims’ trust, the fraudsters assisted them in opening cryptocurrency exchange accounts and moving funds to wallets controlled by the criminal group. “They assisted victims in opening accounts on cryptocurrency exchanges, purchasing digital assets and transferring them to accounts controlled by the criminal organisation,” Ukrainian Cyber Police said. In some instances, the suspects also accessed victims’ online banking accounts. Criminals moved the stolen money through bank accounts and cryptocurrency wallets to hide where it came from, then shared it among group members.

Fraudulent online trading platforms displayed misleading account balances and investment returns to victims. Criminals steal victims’ money instead of investing the funds as promised in these schemes. UNDERCODE NEWS calculated that the average loss per victim was approximately €31,852. During searches, officers seized nearly 600,000 Ukrainian Hryvnia worth roughly $13,000, hardware wallets, phones, SIM cards, and computers.

Police detained four members of the investment scam ring following searches in August and September. Police video captured one suspect hiding on a balcony and another trying to flee during a raid. BleepingComputer and UNDERCODE NEWS state that all four suspects are in pre-trial detention. The Record reported that three men are in pre-trial detention and a suspected co-organizer is under house arrest.

Authorities accuse the four detained men of fraud and of forming, leading, or joining a criminal organization. If convicted, the suspects could receive prison sentences of up to 12 years and have their property confiscated. Ukraine’s Cyber Police Department, the Main Investigation Department of the National Police, and German law enforcement authorities carried out the investigation. Police continue to search for other network members and victims.

The arrest fits a sustained wave of Ukrainian action against fraud infrastructure. In December, European authorities broke up a different fraud network running call centers in Ukraine that cheated Europeans out of over 10 million euros. In August, Ukrainian police closed 94 fraudulent call centers involved in investment scams or attempts to reach bank accounts. In September, Ukraine’s parliament approved new criminal penalties for organizing or running scam call centers, allowing prison terms of up to 12 years.

Last week, Ukrainian anti-corruption investigators said they found a criminal group that allegedly bribed senior officials to shield fraudulent call centers from probes. The alleged corruption network involved at least 12 people. Members included officials from the SBU, the Prosecutor General’s Office, and the National Police, as well as individuals linked to organized crime. The SBU fired two senior officials suspected of taking part in the scheme.

Kyiv is intensifying efforts to shut down illegal call centers, including some allegedly protected by corrupt law enforcement officials. BleepingComputer labels the schemes as romance baiting or pig butchering, saying criminals reach targets via social media, dating platforms, and messaging apps, then steer them into fake investment schemes.

Criminals steal victims’ money instead of investing the funds as promised in these romance baiting or pig butchering schemes. Police carried out two waves of raids in August and September, inspecting more than 50 properties in Kyiv and other cities. Raids yielded computers, phones, cryptocurrency wallets, documents, and over $90,000 in cash for officers.