Six Arrested in AI-Powered Investment Scam by Spanish Police

Spanish authorities have arrested six individuals involved in a global AI-powered investment scam that defrauded at least 208 victims, stealing over $20 million.

The scammers employed a repetitive scheme, initially luring victims with fraudulent investment opportunities, then contacting them twice more—first as supposed investment managers and later as officials offering to recover the stolen funds for a fee, according to a statement from Spanish police on 7 April.

To enhance their deception, the scammers utilised deepfake ads featuring “national personalities” that promised high returns on crypto investments.

They also impersonated financial advisors and occasionally used romantic overtures to reel in victims.

Experts have raised concerns about the rise of AI-enhanced scams, with blockchain analytics firm Chainalysis noting in its February 2024 Crypto Scam Revenue report that generative AI has made scams more scalable and cost-effective for criminals.

Spanish police said:

“Victims were not selected randomly; instead, algorithms selected those whose profiles matched the cybercriminals’ searches. Once they selected their victims, they placed advertising campaigns on the websites or social networks they used, offering them cryptocurrency investments with high returns and zero risk of asset loss — investments that, obviously, turned out to be a scam.”

While most victims eventually recognised the fraud when they could not withdraw their funds, the scam did not end there.

Victims Fall for Follow-Up Scams After Initial Deception

The cybercriminals would reach out to victims a second time, posing as investment managers, and claim that the stolen funds had been frozen but could be recovered upon payment of a deposit.

Spanish police stated:

“The victims, hoping to finally recover their money, made the deposit without realizing they had been scammed again.”

Victims were then contacted once again, this time by individuals impersonating Europol agents or lawyers from the United Kingdom.

These fraudsters promised to return the stolen funds if the victim paid the relevant taxes in the country where the money was supposedly held.

Spanish authorities have arrested six individuals tied to the syndicate, charging them with fraud, money laundering, and document falsification as part of a criminal organisation.

During a raid on the suspected leader’s property, authorities seized multiple cell phones, computers, hard drives, a simulated weapon, and extensive documentation.

Several other individuals connected to the scheme have been identified in other countries, with the syndicate allegedly establishing numerous fake companies to funnel the stolen funds.

Spanish police added:

“Furthermore, the members of the organization used multiple false identities. In the case of the leader, for example, he used more than 50 different identities.”