Philippines, South Korea, Interpol cuff 3,500 suspected cyber scammers, seize $300M

Alleged crims used AI to pose as friends, family, romantic partners – and sold dodgy NFTs

A transnational police operation has resulted in the arrest of 3,500 alleged cybercriminals and the seizure of $300 million in cash and digital assets.

Interpol on Tuesday revealed the results of what it's dubbed Operation HAECHI IV – a six-month effort that saw 34 nations cooperate, with funding from South Korea.

The operation, which concluded in December, targeted seven cyber-enabled scams: voice phishing, romance scams, online sextortion, investment fraud, money laundering associated with illegal online gambling, business email compromise fraud, and e-commerce fraud. The majority – about three quarters – of the crime investigated by the op was business email compromise, e-commerce fraud, and investment fraud.

Interpol issued two "Purple Notices" – bulletins providing information on the modus operandi, objects, devices, and concealment methods used by criminals – as a result of the operation.

One described a scam detected in South Korea that saw investors lured to acquire non-fungible tokens (NFTs) by promises of huge payoffs. Interpol stated that scheme was a classic "rug pull" – a nasty cryptoland practice in which punters are persuaded to buy a load of tokens, the operators of which then disappear with the funds. The investors are left with worthless digital assets. Interpol's announcement included an image of cat-related pixel art NFTs to illustrate the tokens, but didn't state whether or not they were the assets subjected to the rug-pull.

The other Purple Notice "warned about the use of AI and deep fake technology to lend credibility to scams by enabling criminals to hide their identities and to pretend to be family members, friends or love interests."

Such activity was observed in the UK, where authorities "reported several cases where AI-generated synthetic content was used to deceive, defraud, harass, and extort victims, particularly through impersonation scams, online sexual blackmail, and investment fraud."

Some cases saw voice cloning tech used to impersonate people known to victims.

Interpol singled out Filipino and Korean authorities for their joint efforts that led to the arrest of "a high-profile online gambling criminal" in the Philippines capital Manila, after a two-year tracking effort by Korea's National Police Agency.

Alleged crims detected by the operation were often hit with I-GRIP – the Interpol Global Rapid Intervention of Payments mechanism – which stops payments so that criminal proceeds can't flow through the world's financial system. Those orders, plus other efforts, saw Operation HAECHI IV block 82,112 suspicious bank accounts, and seize $199 million in hard currency and $101 million in virtual assets.

Do Kwon's extradition cancelled … for now

As we're already talking crypto, alleged crimes, and South Korea, let's catch up with Do Kwon. The South Korean national founded crypto outfit Terraform Labs, which created a so-called "stablecoin" called Terra USD and related assets that were touted as safe investments that would not crash. But they did crash, creating a $40 billion fiscal crater.

Kwon is a wanted man in both South Korea and the United States, and made his way to Montenegro in the hope of staying at liberty. In November authorities quashed that plan, ruling that he could be extradited. But on Tuesday, the nation's High Court cancelled the extradition order on grounds that lower courts didn't follow required processes. The case will therefore return to Montenegro's lower courts for a fresh trial.

Interpol has hailed the operation as a win, because it resulted in a 200 percent increase in arrests compared to previous efforts.

"It is remarkable that global efforts to stay ahead of the latest criminal trends have resulted in a substantial growth in operational outcomes," said Kim Dong Kwon, head of Interpol's National Central Bureau in South Korea.

"Despite criminals' endeavors to gain illicit advantages through contemporary trends, they will eventually be apprehended and face due punishment. To accomplish this, Project HAECHI will consistently evolve and expand its scope," he added. ®

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