An army of more more than 200 fake “traders” based in Ukraine have been persuading victims all over the world to part with their savings, according to a whistleblower from the operation who describes it as a huge investment scam.
British and Australian victims of a sophisticated enterprise were apparently lured by fake ads posted on Facebook and mobile phone games featuring celebrities such as Gordon Ramsay, Hugh Jackman and the moneysaving expert Martin Lewis.
After responding to the ads, the whistleblower alleges that unsuspecting victims were contacted by call-centre workers operating in a building in the heart of Kyiv’s business district, promising lucrative investment opportunities.
But the investments in bitcoin, commodities and foreign currencies all appear to be fake, as do the follow-up calls from companies telling victims that they could help them recover the losses.
Investors in the UK and Australia are among thousands of people caught up in the apparent scam, which is allegedly being run from two floors of a respectable office building in the Ukrainian capital. Some have lost their life savings to fraudsters.
Details of the operation have been leaked by a whistleblower who provided the Swedish daily newspaper Dagens Nyheter with secretly filmed footage, internal company documents and testimony about its practices. The material has been seen by the Guardian and other partners in the Organized Crime and Corruption Reporting Project (OCCRP).
According to the whistleblower, the fraudulent investment operation made $70m (£55m) last year. The information he supplied also suggests that:
• Victims of the scam were persuaded to install software on their computers and phones that gave fraudsters access to their bank details.
• Accounts were faked showing huge returns to encourage people to trust the company and invest more.
• Fake traders were disparaging about their victims in internal company postings, repeatedly remarking how they had “fucked” unsuspecting investors.
• Members of the “retention” team at the firm, which was tasked with making 300 calls a day to extract more money from investors, were rewarded by commission-based payments according to how much money they persuaded victims to hand over.
The whistleblower said the purpose of the retentions department, which he worked in, was to “squeeze the money” from clients until they were down to “the last cent”. He added: “It’s money from accounts, it’s money from their wages, even they push the clients to borrow money from the banks.”
The whistleblower identified a Ukrainian company called Milton Group as the firm behind the alleged scheme. It has no links to UK companies of the same or similar names. According to leaked documents, it operates a number of front companies including CryptoMB, Cryptobase and Vetoro Banc, which it portrays as a UK bank with its head office in Brighton.
Milton Group did not respond to a request for comment.
In a telephone call, Milton Group’s CEO, Jacob Keselman, told Dagens Nyheter that the information on the firm was “incorrect” and that it was a software company that provided IT support for other companies.
Keselman describes himself as “the wolf of Kiev” on his Instagram profile, in an apparent nod to the Hollywood film The Wolf of Wall Street, about a penny-stock scam.
The Guardian worked with Dagens Nyheter and other OCCRP partners to track down and speak to victims of the investment fraud around the world. Many spoke of how they had been attracted by online pop-up adverts. Once would-be investors clicked on the adverts and gave their details they apparently fell into the fraudsters’ hands.
The fraudster’s strategy appears to have been to attract a small investment, then to use any means possible to get victims to hand over money. Some people were persuaded to invest more, while others were sent fraudulent letters purporting to be from the UK’s HMRC, ordering them to settle fabricated tax bills.
In another ruse alleged by the whistleblower, fraudsters called people who had complained about losing their money and said they worked for a different company that could help them retrieve their cash in return for an upfront fee.
The Guardian spoke to 16 British victims, all of whom confirmed they had lost money to the investment scam. Most did not want to be named, some because they had not told their family about their losses.
However, victims recalled being inundated with calls from traders after responding to ads. One, Teresa, said: “You get bombarded by all of these different companies. I don’t know if any of them are the same. They were calling all day, every day, all through the weekends … Sometimes you’re on the phone to one company and the phone is buzzing with a call from another.”
It is unclear if all the calls reported by these victims were from companies related to the Milton Group, as the phone numbers for prospective victims could have been shared or sold to other fraudsters.
After being persuaded by traders to invest, victims said they saw their savings vanish, with losses ranging from $50 to several thousand pounds.
One British victim, who appeared to be on Cryptobase’s client list, according to documents supplied by the whistleblower, said he had lost more than £70,000 to a range of scams that appear to have started to target him after he replied to a single advert on Facebook.
The whistleblower alleged that traders typically asked victims to install free software that would give them access to their desktop or phone, saying it would allow them to show them how to use their account. In reality, he alleged, this software was used to access their private information, including bank details.
One British victim recalled how a trader took over his bank account. “I gave him a code so he could control the desktop,” he said. “He took the money in front of me – he went into my bank and took the money.”
Once the money had been invested, victims logging on to their account were shown what appeared to be remarkably healthy returns on their investments: in one instance, a £2,000 investment ballooned to £35,000.
The problem often came when they tried to withdraw money. One said his trader told him he could access his money only if he paid more than £1,000 in bank fees and commission. Others said they were simply told their withdrawal was “pending”, but never saw their returns.
Documents leaked by the whistleblower also reveal the cultural guidance that he says was given to call-centre workers posing as traders, advising how to deal with potential victims in different parts of the world.
Investors from the UK, Australia and New Zealand, the advice said, should be told “they stand a good chance of making good money because they are intelligent and perhaps will learn to trade within months of which the company will even issue a certificate confirming the client as a master trader”.
The “cheatsheet” for Scandinavian customers said clients were predominantly “old people and really need someone to talk to. It will be very wise for you to pitch very gentle and slow with emotions.” According to the whistleblower, the company warned against scamming people in the US to avoid attracting the attention of the FBI.
Those working at the centre of the scam appear to have had little respect for their victims, according to the leaked documents.
Office records show customers described as “stupid”, and show that some were being pursued despite having told the company they were bankrupt. One note on a customer file reads: “Getting fucked every month for at least 1000 EUR. Gets pension on the 20th/works every tuesday.”
Dagens Nyheter spoke to one 67-year-old Swedish victim who appeared in the database with a note saying: “Sold her home to pay, no money, crying.” She told DN’s reporters: “I can’t pay the rent or buy food. I feel that I have no life.”
The whistleblower said victims of the scheme were unlikely to get their money back.
“Everything was fake, just to steal money from people,” he said. “People lost their savings. It doesn’t matter the size of savings – they lost their dreams. They tried to make money with a fake company, maybe to help their children, maybe to help themselves, whatever. They were cheated and thrown away just like shit.”
