SAN FRANCISCO – Scammers who leverage LinkedIn to lure users into cryptocurrency investment programs pose a “significant threat” to the platform and consumers, according to Sean Ragan, the FBI special agent responsible for field offices in San Francisco and Sacramento, California.
“It’s a significant threat,” Ragan said in an exclusive interview. “This type of fraudulent activity is significant and there are many potential victims and there are many past and present victims. “
Sean Ragan, FBI Special Agent in charge of the San Francisco and Sacramento field offices.
The scheme works as follows: A scammer posing as a professional creates a fake profile and contacts a LinkedIn user. The scammer starts with small chats on LinkedIn messaging and eventually offers to help the victim earn money through cryptocurrency investments. Victims interviewed by CNBC said that because LinkedIn is a trusted platform for professional networking, they tend to believe that investments are legitimate.
Typically, the scammer directs the user to a legitimate crypto investment platform, but after gaining their trust for several months, he tells them to move the investment to a site controlled by the scammer. The funds are then withdrawn from the account.
“So criminals, that’s how they make their money, that’s what they focus their time and attention on,” Ragan said. “And they always think of different ways to victimize people, victimize companies. And they spend their time doing their homework, defining their goals and strategies, and the tools and tactics they use.”
Ragan said the FBI has seen an increase in this particular investment fraud, which is different from a long-standing scam where the criminal pretends to show a romantic interest in the subject in order to get him to part ways with his money. The FBI confirmed that they have active investigations but could not comment as these are open cases.
In a statement, LinkedIn acknowledged that there has been a recent increase in fraud on its platform, telling CNBC that “we apply our policies, which are very clear: Fraudulent activity, including financial scams, is not allowed on LinkedIn. . We work every day to protect our members and this includes investing in automatic and manual defenses to detect and manage fake accounts, false information and suspected fraud. “
“We partner with peer companies and government agencies around the world to protect LinkedIn members from bad actors. If a member is scammed, we ask them to report it to us and local law enforcement. ”
Oscar Rodriguez, LinkedIn’s Senior Director of Trust, Privacy and Fairness, said, “Trying to identify what’s wrong and what’s not is incredibly difficult.”
“One of the things I’d really like us to do more is get into proactive member education,” Rodriguez said. “Educate members or substantially enable them to understand the risks they may face. “
The company claims it 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 defenses blocked 96% of all fake accounts, including 11.9 million that were blocked during registration and 4.4 million that were proactively throttled, according to the report. Members reported 127,000 fake profiles which were also removed.
LinkedIn said its automated defenses detected 99.1% of spam and scams, totaling 70.8 million, over the same period. Another 179,000 were removed after members denounced them. LinkedIn said it does not provide estimates of the amount of money stolen from members through its platform.
The company warned users in a blog post Thursday night on its platform not to send money to people they don’t know and to respond to accounts with questionable work history or other warning signs, such as bad grammar.
This is cold comfort for Mei Mei Soe, a Florida benefits manager who claims she lost $ 288,000 – all of her savings – to a LinkedIn scammer. It all started innocently enough with someone whose profile claimed to be the director of a Los Angeles-based fitness company trying to get in touch with her last December. They started chatting first on LinkedIn and then on a messaging app and she said she was intrigued by her offer to help her earn money.
Mei Mei Soe, victim of a fraud.
“He asked me if I was on LinkedIn for professional networking or looking for a job,” Soe said. “I’ve never trusted anyone, but we started talking and over time he gained my trust. “
Soe said that when the conversation finally turned to investing, “he showed me how he profited from his investments and told me I should start investing with crypto.com, which I know is a legitimate website. I started with $ 400. “
The scammer convinced her to transfer her investments to a site he controls. Over the span of several months, Soe would complete a total of nine transactions, including bank loans and money borrowed from friends, in hopes of using his earnings to start a small business. But Soe would soon learn that the connection he made on LinkedIn wasn’t who he claimed to be. Eventually, he lost all of his funds.
“I still remember that day,” Soe said. “Once I realized I was scammed, 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 hurts. “
She said she never thought she would be scammed on LinkedIn.
Crypto.com claimed to immediately remove any accounts it deems linked to a scam.
“We take a proactive approach to managing and protecting against external threats, including scam and phishing campaigns,” he said in a statement to CNBC. “As with all financial transactions, fiat or crypto, it is essential to ensure that the account receiving the funds is legitimate and that its owner is identified and trusted before the transfer. “
Soe’s story is not unique. A group of LinkedIn fraud victims who meet regularly on Zoom recently invited a reporter from CNBC to join the session, as long as attendees’ faces are covered and their names are not disclosed. Their losses ranged from $ 200,000 to $ 1.6 million.
“We never thought there could be such malicious intent behind a LinkedIn profile,” said one victim who lost $ 350,000.
“Scammers are hiding behind successful businesses,” said another victim who lost $ 200,000. “One of the main reasons I accepted the invitation was because the person indicated on their profile that they work for a legitimate company.”
“We have lost a lot of money,” said one victim who lost $ 700,000. “And it’s not just all our savings, people have lost their homes and car loans. It destroys life and crushes the soul.”
Ragan said he understood the pain of the victims, but they shouldn’t blame themselves.
“It’s not their fault that they were victims,” Ragan said. “It’s the attacker’s fault. It’s the criminal’s fault. They spend nights and days thinking about ways to victimize and defraud people. That’s how they make money with illicit gains. And the people who are victims are victims.”
The Global Anti-Scam Organization, a victim advocacy and support group, has tracked most of the perpetrators to Southeast Asia.
“They usually target victims on LinkedIn demonstrating that they have an entrepreneurial spirit,” said Grace Yuen, spokesperson for the Global Anti-Scam Organization. “They can claim to have graduated from a well-known university and then claim to be in finance or investment. Sometimes they even claim to be in the same industry as you. “