Who Is Behind Investment and Love Scams?

The Scale of the Problem

According to the latest statistics, scams where victims lose money are now generating more than one trillion U.S. dollars annually. To put this into perspective, this is ten times larger than the global cocaine business.

Without any doubt, most of this criminal activity is carried out by well-organized criminal organizations. The logistics of handling such massive amounts of money require complex operations. Yet, despite the scale, law enforcement agencies worldwide manage to recover and return only a tiny fraction of what victims have lost.

How Scams Have Evolved

We have been investigating financial crimes of this kind for more than 15 years and have observed how scams are becoming increasingly well-organized.

Today, criminals rely on a wide range of specialists:

• Technology experts to set up websites and secure systems,

• Marketing professionals to build trust and attract victims,

• Financial specialists to handle international money transfers,

• Managers to coordinate the overall operation.

This evolution shows that scams are no longer amateur crimes, they are sophisticated enterprises.

Scams as Startups

Launching a new scam is remarkably similar to starting a new company or startup.

• You need a business concept (the scam idea).

• You form a founding team to lead it.

• You recruit specialists for IT, marketing, and bank transactions.

• You cover startup costs before any revenue flows in.

Like legitimate startups, scams require initial funding to get off the ground. And just as in the world of legitimate businesses, many scams collapse quickly, only a fraction survive long enough to become long-lasting criminal enterprises.

The Role of States and Protected Organizations

When we put together years of investigative observations and combine them with inside information from people within these criminal organizations, a disturbing picture emerges.

A significant number of scams are being organized by countries under international sanctions and carried out by organizations protected by these states.

We have evidence that these crimes serve dual purposes:

1. Generating revenue to help sanctioned governments offset economic losses.

2. Creating disruption against countries these governments have declared as their enemies.

Our investigations have identified Russia, China, and North Korea as key players in these operations.

Several of the scams we have investigated, and where we represent victims, originated in Russia, with St. Petersburg as their center. The criminal ecosystem there is so advanced that we refer to it as the "Criminal Silicon Valley."

Here, the Russian government and the Russian mafia have built an environment modeled on Silicon Valley, a hub where criminal enterprises can be developed, funded, and scaled.