Organised investment fraud cost Aussies $113m

Australian victims of organised investment fraud have forked over at least $113 million in the last 5 years, according to a new government report.
Written by Josh Taylor, Contributor

The Australian Crime Commission has estimated that 2600 Australians have lost more than $113 million due to investment fraud, in the last five years.

The findings come in a new report, published yesterday, titled Serious and Organised Investment Fraud in Australia (PDF). The report was put together by Taskforce Galilee, a consortium of 19 government departments, including the Crime Commission, the Attorney-General's Department, the Australian Tax Office, the Department of Human Services and the Australian Communications and Media Authority.

In addition to offers for shares in companies, the fraudsters offer green energy investments, new technology shares, lotteries and sweepstakes and foreign currency trading, among others.

The report found that most of the operations targeting Australians were based overseas. Many were based in Asia, but were not run in Asia. Those who cold-called victims were generally Australia, English, Scottish, Kiwi or South African.

The report stated that the fraudsters commonly used Voice-over-IP, email, phone, mobile phone or SMS to contact victims, and developed fake websites with log-ins that would displace fake balances, to keep the victim investing money in the scam.

The victims tended to be male, aged over 35 years, but generally over 50. Small business owners, self-funded retirees and those who are socially isolated were common. The report said that Australian victims were found to be well-educated and computer literate.

Home Affairs Minister Jason Clare said in a statement that people could be strung along for months before catching on.

"This is what happens. The criminal syndicate cold calls the investor, refers them to a flash website and sends them a brochure, promising strong investment returns. After taking their money, they string them along for months or even years, and then the money disappears," he said.

"People’s entire life savings are stolen by criminals, with the click of a mouse. This type of crime destroys wealth and destroys lives. It’s also very difficult to stop."

He said that the number of those who had fallen victim to investment fraud could be much higher than the 2600 estimate, because people tend not to report the crime.

In a press conference yesterday, Australian Crime Commission CEO John Lawler said telecommunications providers had a big role to play in helping to crack down on investment fraud.

"They become very, very important collaborators, particularly with the regulator. And we do have the telecommunications and the ISP associations engaged with this initiative as well," he said.

"There's a range of things they can do to help in a disruption context. And it becomes about alerting and warning, and when monies are to be sent, or whether we have companies that are identified as being involved in investment fraud that the actual victim is alerted to the fact that these are known to the authorities."

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