Special episode: Facebook accepts scammers' money, helping them take yours

Published Nov 16, 2024, 6:01 PM

In recent Facebook ad scams, con artists tricked a Queensland retiree into selling her house, swindled a GP who believed he was investing in a fixed-term deposit scheme and stole about $700,000 from a new father.

A months-long investigation by our papers has heard from devastated victims, cyber-fraud investigators and scamming syndicate insiders, including scammers themselves.

Today, investigative reporter Aisha Dow on how networks of sophisticated criminal groups deploy social media ad campaigns to fish for new victims, fleecing Australians and other victims worldwide.

From the newsrooms of the Sydney Morning Herald and The Age. This is the morning edition, I'm Samantha Salinger Morris, and today we're bringing you a bonus episode. It's Sunday, November 17th. In recent Facebook ad scams, con artists tricked a Queensland retiree into selling her house and swindled a GP who believed he was investing in a fixed term deposit scheme. A months long investigation by our papers has heard from devastated victims of cyber fraud investigators and even scammers themselves. Today, investigative reporter eyeshadow on how networks of sophisticated criminal groups use social media ad campaigns to fish for new victims, fleecing Australians and other victims worldwide.

For free. The story of how she was defrauded of almost everything she owns began with a Facebook advertisement. The retired hairdresser was stuck on the couch in mid 2022, nursing a broken ankle, with nothing much else to do but scroll through social media.

And on social media. I saw where people were making a passive income learning to trade. So I went on to YouTube and I was watching.

It was then that the 73 year old recalls seeing a scam ad featuring a deepfake version of Australia's richest woman, Gina Rinehart, promoting a special way to make a passive income similar to this one.

I've made $100,000 in net profits in the last month. These are certainly impressive numbers that make mundane salaries at work incomparable to an investment opportunity.

Not long after she responded to the ad, she got a phone call from a man who identified himself as Steve Fisher, an investment specialist in London. Janelle says her first thought during the call was this is a scam. But then the so-called Steve heard the sound of her grandchildren playing in the background and identified something defining about Janelle's character that he would exploit again and again. Her love for her children and her grandchildren. Steve would call every night, often as Janelle was sitting down with her partner to have dinner.

But every night, if you've got someone talking to you every night, it becomes almost like a marriage where you're there, part of you, you know, of of your daily life.

When I asked Janelle how much she lost to the scammers, her response floored me. How much did you lose altogether? You know.

I started my house, darling, and gave him my whole house funds against.

My name is Asha Dow and I'm an investigative journalist for The Age and Sydney Morning Herald. I've been conducting a monthslong investigation into how networks of sophisticated criminal groups deploy online advertising campaigns to fish for victims, fleecing Australians and other victims worldwide.

They take your blood. If they could then take your organs, they would literally kill you to get the last out of you. And they're so good at it.

One of the areas I focused on is scam ads on Facebook and Instagram. I've done this because cyber fraud investigators and scammers told me that these ads were a common way fraudsters were able to connect with potential victims. At the beginning of my investigations, the advertisements I came across featured those fake computer manipulated versions of famous Australians promoting a quick and easy way to make a passive income. When you listen to them, you'll hear how convincing they can be.

Your life is about to change. I'm Dick Smith, entrepreneur, businessman, and philanthropist. I've been waiting for you. This is your lucky day. This is a new approach to fighting inflation and poverty. The new financial program, which allows you to successfully trade with lowered risks because of artificial intelligence and with the reserve Bank of Australia, created an investment platform that guarantees a profit to all Australians. Get a chance to make money that will change your life.

Investment opportunities that would normally escape the human eye and acts at a speed unavailable to humans.

Another video of someone trying to scam you out of your money. Because I respect you and want to gain your trust. What is the difference between these scammers and me? First of all, I'm Dick Smith and I don't want anything from you. From you.

Investment scams cost Australians an estimated $1.3 billion last year. It's a staggering figure, and some experts have linked it to Australia's reputation as an easier market for fraudsters. Scammers say they don't fear Australian law enforcement and Australian victims are often seen as more attractive targets, being richer, more trusting and connected to the internet. As I dug a little deeper, I found evidence that social media giant meta, one of the world's most profitable businesses and a parent company of Facebook and Instagram, is turning a blind eye to criminals. So this is how it works. A video of Gina Rinehart appears on Janelle's Facebook feed. This Gina Rinehart is not really Australia's richest woman. An iron ore magnate. It's a computer modified replica. The fake Gina is trying to trick Australians into handing over their personal details to criminals. The first step in their scamming journey. Although Janelle's memory of this step is a bit hazy, it's likely when Janelle clicked on the Gina Rinehart ad, she would have been directed to a separate scam website where she entered her details. Then she gets a call from the so-called Steve Fisher, the investment specialist from London, and he starts to ring her every day, asking Janelle how she is and how her broken ankle was healing.

He was extremely personable. I got on so, so well with him. I used to think sometimes, gee, I wish you were like one of my children. My son. He was about the age of my children. And he he had ethics and he believed in karma.

If you were to bump into Janelle free on the street, you'd probably describe her as warm and bubbly. She's made a career of cutting people's hair and talking to people, sharing in their worries and stories.

So that makes sense. Why? I've got the gift of the gab, I guess. So I probably made it very easy for him, just always been a very physical person. I love gardening, I love Bushwalking. I've done a lot of horse riding. I seem to be a bit of the the favourite one at happy hours around the campfire because on Steve.

Fisher's instructions, Janelle Free paid $250 to sign up to a trading platform called Revenue Centre Pro. Steve would talk her through each trade on her dashboard, yelling at her to push a big green button to buy and a red button to sell. At the beginning, she made little bits of money. Her first profit off a trade was $3.74. Soon as she started to funnel more money into the platform, she was making more than $1,000.

Then I made $1,207 and I thought, wow, okay, this is better. So I put in another $8,000. Yeah. And so and then I put in another $9,000, and then I was earning $4,000 a month.

And as Janelle's perceived windfalls grew, so did the scammers tentacles of influence.

Those phone calls that I'd missed. I was always told how he had a very good trade that night, and it was a shame I missed it. So it gets into your head that you don't miss phone calls. And so it became that I'd be glued to the phone. I'd have the phone in my pocket. I'd even if I went to take the washing off the line, I'd take the phone with me and balance it so I wouldn't miss a phone call so that I could do the trades. Um, and as.

Janelle started making money, or so she thought, those around her became interested in investing too. The conman was able to charm some of her close friends and relatives into handing over their money to tens and hundreds and thousands of dollars. Janelle said the investing was never about luxury cars or glamorous holidays. It was about providing for her family. Her dream was to be able to pay off her children's mortgages many years earlier. Janelle had used her modest divorce settlement to purchase a block of land at Pacific Pines on the Gold Coast and then borrowed, scrimped and saved to build a house on it. She couldn't afford to live in the house, though, so instead Janelle and the children had labored on the landscaping, washed down the driveway of dirt, and then rented the property to long term tenants. It was a grand promise of the bitcoin halving that led Janelle to selling that house. Steve had been ringing her up with excited tales of a rare financial event that would bring Janelle and her family untold prosperity.

She said, well, I don't have anything else I can sell. Like, not my caravan. That was my home, caravan and car. And I said, I don't have anything, Steve. I said, the only thing I've got my house left. And I said, but that's what I live off. That's my income. And he said, well, you know, you you sell that house and put the money in. He said, you can buy four houses with the money you're going to make.

Janelle made almost $1 million from the sale of her house that went to trades to. Then one evening months later, everything changed.

This particular night, another man by the name of Jacob rang and said Mr. Fisher was sick and he's asked. He'd asked Jacob to look after us and do these trades. And it was very different to how I'd ever traded before. And I said, oh, I've never done it like this. This isn't how I've done it. And he said, no, this is the big one. This is the big one. You know, this is, you know, we're all your children pay their mortgages off. And I was so excited, he'd say, buy a $100,000 of these coins. And I'm putting in and I'm like, wow. And I was counting the zeros because I'd never traded with this much money. When he rang up the next day and I logged back in, everything was in the red and minus all of the money -100,000, -200,000, -50,000, -300,000. With all the different things he had us trade in.

Rather than just silently disappearing with their loot. Scammers will often fake a catastrophic investment event. And this is what happened with Janelle. Steve blamed his colleagues for losing her money in trading gone wrong.

And then when he spoke, he said, oh, he said, I've come into the office and I'm screaming at everybody. They've done it wrong. Janelle, I don't know how to fix this. I'm not a genie. But I will fix this. I promise you. I will fix this. I don't know how yet, but I promise you, I will fix this. And then I sent him a bit of a nasty email, and I said, look, I think I think you've spammed me. I can't believe that you know me. You know, I've given you every cent I've got. I said, and I haven't even got this month's money back, and all I've got in my bank account, all I've got to my name is $4,000. I said, you've got everything.

You got almost $1 million from the sale of your house.

I did 930,000 I got.

How much of that did you ever see, Janelle?

And I'm absolutely nothing.

Since she realized she was scammed, Janelle Free has been contacted by two individuals promising that we'll get her money back. One of them goes by the name of Daniel Saunders, and he's part of the initial group of scammers.

Out of the blue. This, uh, Daniel rang up and he said he was from their support team and they'd been stood down. Steve and Jacob had been stood down. They'd done something very wrong by the company, so they were no longer in their company. So Daniel is telling me to put in another 560,000 to get my 2.5 million back. Um, he phones nightly. I've recorded.

Janelle has been recording her phone calls with Daniel.

What happened in your account was a catastrophe. It was? Yes. Catastrophe? Yes. That's why I want to move on as soon as possible. To make sure that the thing is fixed as soon as possible as well, too. That's right. And we need 560 Australian. Yes. That's correct. Remember that? Correct? Yes.

I have remembered that.

We don't have a lot of time to mess up with. Okay, my dear, I need on Monday everything will start because the lady is already the fifth. And I need by the.

15th to give you your money back. Private investigators believe the syndicate that targeted Janelle and her associates is an Israeli criminal group with call centers in Cyprus, Bulgaria and Serbia.

I got everyone involved through me being happy about it and making the money and helping the kids pay off their mortgage, and I just thought I'd make their life. Instead of that.

I've ruined.

Their lives. I don't know what I'd do myself an injustice and I wouldn't do that to them. And they said, mum, we've got you. That's all we care about. Um, money is nothing and.

I.

Know it's nothing but.

Meta has recently been serving up ads, just like the one Janelle saw to tens of thousands of Australians.

This is a new approach to fighting inflation and poverty. The new financial program that's the.

Voice of Prime Minister Anthony Albanese, or at least it sounds like it is, which.

Allows you to successfully trade with lowered risks because of artificial intelligence and.

Phony. Albanese is spruiking quantum AI, a notorious scam investment platform.

Quantum AI has achieved a high success rate of 94%. Thanks to this, you can earn almost passively on a daily basis.

This is significant for several reasons. Firstly, because it has a history of association with scammers, but also because Australian authorities have very strongly singled it out. In a joint press release issued in March, the Australian Securities and Investment Commission, the Australian Government and the National Anti-scam centre cautioned that quantum AI was the most prolific online investment trading platform scam impacting Australians. So you think it would be pretty easy for meta to make sure that it doesn't publish any ads for quantum AI, right? But what our investigation found is that even after this warning was made, meta kept on pushing quantum AI ads to Australians. In fact, in the eight months following that press release, meta took thousands of dollars from likely criminals to push at least 173 ads touting quantum AI investment schemes. And these findings are likely to be the tip of the iceberg.

Spec.

That's because metas ad library generally doesn't disclose each ad spend, and typically doesn't show those that are no longer active. To find out more, I also employed the help of our Visual and Data Analysis story team here at The Age, who over a couple of months used a bot to scrape metas ad library. They look for terms strongly associated with scam activity. These were terms like WhatsApp group trading, Dick Smith investment and quantum AI platform. One of the biggest takeaways for me was about the advertisers behind these ads. Some might expect if these companies were genuine investment companies, they would have hundreds of followers or likes. But in a sample of over 700 of these ads, more than 60% of them had only ten or fewer likes. To me, that should raise a big red flag for meta about the entities that they are allowing to publish ads to Facebook. And then when you look at these pages even more closely, it becomes clear that so many of the scam ads are being pushed by advertisers that are clearly not legitimate investment companies. In October this year, there was a Facebook ad taken out with a picture of Anthony Albanese spruiking this quantum AI scam. But the page behind it was listed as a woman's clothing shop in Ukraine, and it had no followers at all. This year, while social media made up only about 6% of the scams reported to Australia's Scamwatch, it was responsible for almost a quarter of the losses. This means social media is now the second most lucrative contact mode for scammers, ahead of all other methods, excluding phone calls. Last year, meta earned about 200 billion AUD from ads, but they don't disclose how much of this profit comes from accounts that were later removed for being fraudulent. American Facebook whistleblower Frances Haugen argues celebrity scam ads haven't posed the same problem in the US as they have in Australia, an observation she attributes to Meta's underinvestment in the safety of Australian users.

When I talk to people in Australia, people are like, oh, of course we see this. Like I was baffled. I'll be totally, I'll be totally blown with you.

Haugen sensationally blew the whistle on meta in 2021, when she shared internal documents revealing the company was aware its products were causing harm.

The reality is meta allocates safety resources to all the platforms, allocate safety resources based on fear of consequences.

She says the lack of ads on Facebook promoting illicit substances is evidence that meta has the capacity to remove illegal activity from its ads.

So if you ask them to do something like take hate speech off of computers, humans can't agree on what hate speech is. Computers are not going to understand. But there's easy questions like, for example, you don't see ads for illegal drugs, right? Like you don't see ads saying you can buy heroin on meta. Right. And the reason for that is searching for the word heroin, searching for the word MDMA. I don't know, that's easy for computers to do. And if you put that word in your ad, I guarantee you a human will look at it before it goes live.

This apparent disconnect between Meta's tech prowess and its inability to rid its platforms of scam ads is at the heart of the Triple C's court action against meta. It alleges the tech titan knew about fake celebrity scam ads on Facebook since 2017, but failed to adopt reasonable safeguards to prevent the ads.

The triple C today going further, launching action in the federal court against owner meta for.

Misleading and deceptive conduct by publishing scam advertising featuring prominent Australian individuals and seeing them lose a hell of a lot of money.

Scamwatch figures in the ongoing federal court case. The AEC has also claimed that meta had the capacity to place warnings on scam ads, but hasn't done so. Billionaire Andrew Twiggy Forrest is also pursuing meta in court, after trying for years to get the company to stop publishing scam ads using his likeness.

The action is being taken on behalf of everyday Australians, mums and dads, grannies and grandads.

A spokesperson telling.

The case will look at whether Facebook breached its duty to the public by allowing scam ads on its platforms. His case also alleges meta has acted as a servant or co-conspirator of scammers by offering tools that can help produce versions of ads that viewers are more likely to click on. After the break, we hear from a scammer operating from Southeast Asia. Look inside a scam operation and consider the government's plans to tackle scams. To understand how Australians can be better protected from fraudsters, I wanted to find out how they were able to reach so many people and how exactly they were managing to get them to part with their money. While every scam story is different, there is also often a familiar pattern a similar set of steps. People's journey might begin with a scam advertisement peaked with the illusion of windfall gains, and then end with their details being passed on to a new set of scammers who falsely claim they can recover the stolen money. I recruited the help of Mark Solomon's fraud and cybercrime expert with IFM global.

And I've been specialising particularly In scams that emanate from Eastern Europe and the Middle East in the last few years.

Mark showed me the highly detailed spreadsheets kept by a large scamming syndicate. It gives a unique insight into the early part of the scamming process.

Can you read the. I can read it, yeah. Okay, so you can see that the names of each column. Mhm. The email is the email of the victim. The phone number. Right. This is where it starts getting interesting. Mhm. I'll just open this up.

It shows down to the exact second when each victim made their first scam payment. And which particular fake investment brand with names such as Arrotex, Aussie Trust and London Gates was used to swindle them. Some cells have the phrase in the money. This means the fraudsters have extracted information from the victim that gives them reason to think they are a juicy target.

These are the people that are going to not go on to make significant losses, because they've already been judged to be gullible. Yeah. And, Rich.

Have you.

Seen the names of your clients on any of these documents?

Yeah, many of them, yeah.

And they've been in the money.

Lots of them. Mhm. Uh, and then you've got the, the name of the victim. And then we'll go down and then we get to the Australians and that will be a long list.

They are all Australians now.

Yeah. All Australians, all Australians. Australia stops at row 1500. And the first what few dozen. Rostron. Yeah. So that gives you. That gives you an idea. Yeah. You know, you got 1500 people each paying 250 bucks. Mhm. That's a lot of money. Yeah. And a lot of them will just stop there and they'll go yeah. Not for me or. Oh. Looks a bit flaky or. And that will account for probably the majority. Mhm. But then a significant minority will go on to establish long running relationships with the scammers and give them very significant amounts of money.

After the victim has had their first contact with the scam group, they might then hear from someone like Raman. Raman is called an account opener. He works for a criminal syndicate in South East Asia. Raman isn't his real name and his voice has been distorted to protect his identity.

It's actually a three page script. It actually says, first, we've got message from our juniors that you've spoken with them a couple of weeks back. Sometimes you did some months ago, and it indicated that you're open to hearing back from us. Do you recall the conversation? We talked straight away about the opportunity. Look, we're sharing with you the same recommendation we've given to our existing clients. And so they're going to feel like, oh, okay. So they feel like special actually as they're given the same recommendation. And then we mention about the we will call them in one within one week's time. That way they're able to conduct their due diligence or proper research so to speak, because we always advise them to do their proper look.

So that's pretty incredible, Raymond, that you're advising them to do their their research. They're obviously not coming across scam warnings or are they.

There's a lot of them actually. But when they hear us advising them to do the proper look, you know, psychologically they would probably are thinking, oh, this is a real company because they're advising us. They're encouraging us to do our our proper look. And they're not we're not pressurising them. That's one of the things that actually made them feel comfortable.

Mark Solomon says he was stunned to discover the level of professionalism and sophistication of the scamming syndicates he's investigated. These are not small time scammers working away in their basement. They're big businesses with multiple departments. Even quality control experts.

They're incredibly professional. They're incredibly sophisticated. They look, to all intents and purposes, to the uninitiated as a sophisticated financial or technology business. And they behave like one. They hire the best lawyers, the best accountants. They use industry standard customer relationship management software. They track every dollar in and out of their operations. They set up multiple layers of front companies, all of which look like legitimate entities. But of course, none of them are. And they manage to defeat everybody.

I asked Raman, the scammer, if he ever feels guilty about the work he does. Do you feel guilty at all about the work at the time?

All the time. You know, you give me another job right now and, you know, provides the cost of my lifestyle right now. I definitely walk away and do that other job. The way these guys actually help us out in being numb with what's going on is that they always tell us that, hey, remember, these guys have millions and millions of money, so they're okay.

Raymond says it wasn't easy to tell his family he was working as a fraudster.

I eventually told my wife, and, um, she cried at first. She actually asked me to stop, but I, you know, got no other ways and means to provide for my family. That's why I'm still here.

When I told Mark about the fact that Raymond felt guilty. He was surprised.

That's a rarity for somebody to express that level of remorse or guilt about what they're doing. And one of the things that really struck me about this industry when I first started to look at it in depth, was just the sheer number of people who are prepared to sit together in a building and rip people off and not feel bad about it. And that's partly a product of the environment in which they find themselves.

After spending many months speaking to Australians impacted by fraud, I've been quite shocked by the level of injustice that scam victims continue to encounter. It's rare for the spoils of online fraud to be recovered, as money is quickly funnelled out of Australian bank accounts, never to be seen again. Many victims have told me that their police reports have gone nowhere. Instead, some have to pay for help from private investigators. As it stands, there's no way for people like Janelle who've clicked on scam ads to seek compensation from meta or other social media platforms, and Australian banks reimburse no more than 7% of stolen funds. This all means that Australians who lose their life savings through scams are generally left to bear the full cost of the crime. And let's be blunt, the criminals are pretty much getting away with it. As I speak, moves are underway to shift the balance in favour of victims. The federal government has drafted laws that could force meta and other big tech companies, as well as banks and telcos, to pay compensation to victims and face fines for systemic failures in scam protection. With these reforms looming, meta recently joined eight other big tech firms announcing a voluntary digital industry code of practice for scams. Among their pledges were that the platforms will introduce or move towards checking. Advertisers have the necessary financial services license. Assistant Treasurer Stephen Jones told me he thinks they've already had enough time.

I think getting off scot free. Not only are they not doing enough, they are a major vector for criminal activity. Their first offense is generally to say, this is not us and this is not our responsibility. And when they do act, it's far too slow. Man, I don't have to wait. They know exactly what we want them to do. We want them to verify their advertisers. We want them to pull down the fake ads. And then we want rapid response to reliable reports. They know that they could do that today.

Meta has so far resisted the government's more ambitious reforms, arguing that new initiatives from the industry and the Australian government need time to take effect, and in response to our questions, Mehta strongly refuted accusations the company benefits from or turns a blind eye to scam ads. It pointed to its newly announced scam prevention initiatives, including testing new facial recognition technology to stop celeb bait scams, and a new channel allowing Australian banks to report scams direct to Mehta. They told us the safety of our users is of utmost importance, and it makes no sense to allow scams that create a poor user experience on our platforms. But Jones, who is leading the government's scam reforms, insists Mehta can and should do more.

Mehta makes 5 to $6 billion a year in Australia, largely through advertising revenue. They could use a fraction of that money, a small fraction of that money, to be more vigilant about what they advertise and more active about what they typed in, and they choose not to. They choose not to. Instead of preventing the harm, they'll litigating to protect their own commercial interests. It shows an arrogant disregard for the harm that they're doing here in Australia and elsewhere.

To this day, Janelle is receiving calls from criminals called recovery scammers. They promise they can get her money back, but that's just another lie. She's been taking down their names, details and anything she can use to hand to authorities in the hopes her money will be recovered.

I was on the plane and because I didn't have any cards, I went down to my grandson's graduation and I wanted a cup of coffee, and I offered them cash and they said, oh, we don't take cash, we only take cards. And I burst into tears. I said, like, you must have a card. I said, I've been scammed and I haven't got a card. And that was because the scammer had rung me just before I got on the plane. So I was back raw again. The hostess came back. She said, what was it? If you did want to order? What was it you wanted? I said a cup of coffee. She said that's complimentary.

You know.

You can read more of Asia's investigation on our website at The Age or smh.com.au. Today's episode of The Morning Edition was produced by Julia Katzel. Our head of audio is Tom McKendrick. The Morning Edition is a production of The Age and The Sydney Morning Herald. If you enjoy the show and want more of our journalism, subscribe to our newspapers today. It's the best way to support what we do. Search the age or Smh.com.au forward slash. Subscribe and sign up for our Morning Edition newsletter to receive a comprehensive summary of the day's most important news, analysis and insights in your inbox every day. Links are in the show. Notes. I'm Samantha Salinger Morris. This is the morning edition. Thanks for listening.