Search for Cyber Criminals in Germany Following Billions of Euros in Fraud

Initially, the position appeared to be a lucrative finance job. However, it ultimately resulted in a costly addiction, with a monthly expenditure of $10,000 on drugs, and confinement in a prison in Germany.

This is the story of Tal-Jacki Z.F, who was involved in an e-commerce fraud and in 2021 confessed to defrauding Germany, Austria and other European countries of almost 9 million euros ($9.8 million).

He was a cog in the machine and helped establish and maintain highly professional call centers in Bulgaria, Serbia, Bosnia and Herzegovina and Georgia with the goal of attracting investors with slick online software that mimics the look and feel of legitimate trading.

Online shopping fraud is a rapidly growing global problem. In the United States, the Federal Bureau of Investigation estimates that such scams stole $3 billion last year; Similar amounts are harvested in rich European countries. Interfering with gangs is difficult because they work across borders and often change forms of deception to avoid detection.

But as the damage has mounted and tens of thousands of people have lost their savings, law enforcement is stepping up. As Europe’s largest economy, Germany is one of the region’s top targets, and prosecutors estimate that around $1 billion is stolen there each year.

At the heart of these operations are call centers known as “boiler rooms”. They’re high-pressure environments where staff rarely know what they’re getting into when they’re hired, Tal-Jacki said in an interview from his secure rehabilitation facility near the German city of Munich. His face reflects the years of alcohol and drug abuse he says he experienced.

In this type of crime, the public first clicks on attractive Internet advertisements, often borrowing credibility from a well-known person. A recent example targeting Germany used fake news about Elon Musk leaving Tesla to run an AI investment firm.

Then the boiler workers pressure them by phone and e-mail to make a modest initial investment – around 250 euros – and more sums after that. Although investors may think they are making a profit every day when they go to withdraw, there is no money.

“The customer actually thought they had the real deal,” Tal-Jacki said. “It was legit. If you compared it to other sites, Bloomberg or whatever, you saw the same numbers.”

Many of Tal-Jack’s former associates have been rounded up, but others are still very much at work and being hunted by law enforcement, including German senior prosecutor Nino Goldbeck.

The 43-year-old has led cross-border efforts to catch criminals and stop scams.

For the past two years, he has been on the road almost every other month to participate in raids in Albania, Bulgaria, Serbia and Kosovo. He has made dozens of arrests, successes that have made their mark and helped push the idea that a serious multinational effort is needed to counter the adversaries, who also work in sophisticated ways in multiple countries.

One of the largest centers uncovered by prosecutors in Kosovo had more than 400 employees. It defrauded German victims of about 32 million euros in less than three years, according to court documents in a trial against one employee in Saarbrücken, near the French border.

In mainstream financing, e-commerce scams are becoming a reputational risk that is no longer limited to sideline activities. Fraudsters have imitated Deutsche Bank’s Xmarkets trading platform, borrowing the name and its solid appeal to middle-class German investors. Ralph Hamers, the former CEO of the Dutch bank ING Groep NV, was fired for investing in a payment business that was being investigated for money laundering.

The brains behind the network of scam gangs have found very high profile targets in the past.

One is Gery Shalon, one of the greatest hackers of all time in the US financial system. Court documents show he lost more than $400 million as part of the deal with the United States. He later returned to Israel, his father said earlier this year.

Shalon’s partners include Israeli citizen Gal Barak, who was called the “Wolf of Sofia” for building a scam empire from the Bulgarian capital.

Tal-Jackie says Barak hired him to build a call center. At first it was not clear that the company was a criminal enterprise, so what succeeded was legitimacy.

Still, Tal-Jack’s atmosphere in the operation grew more menacing over time as Barak began moving around with armed bodyguards.

“Once the office didn’t produce the result he expected,” Tal-Jacki said of Barak. “So he brought in someone with a polygraph to check all the employees and see if we were loyal to him.”

That triggered Tal-Jack’s desire to get out of the business – provoking the boss’s anger, of course. He began drinking two to three liters of whiskey and snorting two to three grams of cocaine every day, sometimes with heroin, his lawyer said at the trial.

He is now in a locked mental hospital due to his addiction.

“I started using drugs, a lot of drugs. From that moment on, it was like falling without a parachute.”

Desk job

Call centers have multi-level management, processes and accounting. They can have shiny offices, pay local taxes and offer seemingly legitimate jobs. The airport under Barak used to have a large recruitment banner at Sofia airport.

The job of the employees is to contact customers who log on to one of the many websites – under the names “Zoomtrader” or “Option888” – and entice them to invest a relatively small amount of cash, promising quick and easy returns. .

Clients are then handed over to other agents who act as “investment advisors” and are trained to use techniques of psychological manipulation.

Fake online software and advisors trick customers into believing that they are investing in financial products ranging from currencies to stocks, bonds, cryptos and even derivatives. Profits or losses can be generated on the website as needed, regardless of what the “real” market is doing.

But their money is already gone.

Some artificial means are so convincing that some investors do not even realize that they have lost their money in a scam. Just bad luck in the market.

“Ultimately, the type of placement offered did not matter,” the Saarbrücken judges wrote. “The gang’s only goal was to get as much money as possible from customers to get rich.”

There are many forms of cheating in the world. According to German prosecutors, gangs operating outside of Asia are reaching out to vulnerable people in Europe using dating apps. One victim, who asked not to be identified to protect her identity, was a Berlin woman who lost her life savings.

When the 45-year-old was diagnosed with breast cancer last year, her world fell apart. Looking for a distraction, she logged onto an online dating platform.

She soon met what appeared to be a nice man of Asian descent, and the two began an intense conversational relationship. The conversations were a comfort to him, he said.

She didn’t question his explanation for why they couldn’t meet. He said he was in the wine business and had to be in New York often.

At one point, when they discussed their future together, he mentioned owning a house and suggested they invest in cryptocurrencies.

He introduced her to the marketplace, where she put 100 euros. He was soon rewarded with a payment of 200 euros – real money that ended up in his bank account. Convinced of this success, he invested more and more, eventually borrowing 60,000 euros.

In January, when he had more than 900,000 euros in his account, he asked to receive the money. First he had to pay the fee and then he was told there was a traffic jam.

Then he couldn’t reach his friend and the platform was down. In all, he lost 159,000 euros.

Read more: The descent into crypto hell started with an email from Vicky

His story is just one of many. Earlier this year, seven men and women were sentenced in Koblenz for their involvement in an online shopping scam. After first announcing the prison terms, Judge Thomas Metzger then read a list of the victims.

It was about sixty names, and to each the judge added the amount lost. For some it was only a few thousand euros. Others took a much bigger hit. The branch manager of Deutsche Bank lost more than 500,000 euros.

Judge Metzger concluded: “Greed eats your brain.”

Goldbeck Bavaria’s cybercrime unit is working to prevent more people from becoming victims.

“We get new complaints every day,” he said. “This area is booming and will be a major threat for years to come.”

In June, his unit received a second conviction at the Bamberg District Court. Another trial began in July and another is scheduled for September. But to really succeed, Goldbeck says international collaboration is key.

“Perpetrators know no borders,” he said in June when he received the “Bul le Mérite” award from the German Association of Criminal Investigators for his achievements in combating cyber-trafficking. “They simply ignore them.”