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Investment Scams Surge: New FBI Report Warns of Record Losses

by Suzanne Kantra on March 15, 2024

With promises of quick riches, investment scams are flourishing online, costing Americans billions. In 2023 alone, the FBI's Internet Crime Complaint Center (IC3) reported a staggering $4.57 billion in losses due to investment fraud. These scams prey on people's hopes for financial security but often leave them with shattered dreams and empty wallets.

Concept of laptop showing Bitcoin being stolen

Understanding investment scams

Investment scams lure in victims with the intoxicating promise of easy wealth – high returns with seemingly no downside. But this promise is built on a foundation of lies. Take, for example, the insidious Ponzi scheme, where phantoms of profit for early investors are conjured from the lifeblood of later victims. Or consider the shadowy realm of cryptocurrency scams, where phantom platforms promise riches in the digital realm, only to dissolve into thin air, taking hard-earned money with them.

But why have investment scams become such a plague, draining fortunes from unsuspecting pockets? The answer lies in their chilling evolution. Scammers now weave webs of deceit with chilling sophistication, donning digital masks of legitimacy complete with glowing testimonials and deceptively professional websites. The following three scams exemplify their devastating power:

Ormeus Coin cryptocurrency scam

Imagine a world of easy money, where clicking a few buttons guarantees vast returns on your investment. That's the seductive illusion conjured by cryptocurrency scams like Ormeus Coin. In this elaborate scheme, two siblings spun a web of deceit, peddling unregistered securities and luring over 12,000 investors with fabricated tales of mining riches. The price of their greed? Over $124 million vanished from unsuspecting pockets between June 2017 and March 2022. Now facing legal repercussions, their case serves as a stark reminder of the devastating impact crypto scams can have.

Read more: How to Tell if Your Phone Has Been Cloned

Steven Gallagher penny stock scam

Steven Gallagher, like a wolf in sheep's clothing, used social media (specifically Twitter at the time) to manipulate the stock market between December 2020 and February 2021. Gallagher spread false information to create a buying frenzy for over-the-counter penny stocks, enticing investors to buy into these risky assets. Once the stock prices were inflated, Gallagher sold his shares, pocketing over $1 million in profits and leaving investors holding the bag with devalued stocks. This case is a cautionary tale of the dangers of following unsolicited stock recommendations online and the potential for significant financial losses.

International investment impersonation scam

In a brazen international scam, 10 foreign nationals posed as employees of top New York investment firms, duping victims out of over $6 million between 2015 and 2021. These scammers went to great lengths to deceive investors, using fake documents, phony credentials, and even manufactured news articles to create an illusion of legitimacy. This big case highlights the alarming tactics scammers use to gain trust and exploit people's hard-earned money.

SEC guidance on protecting yourself from investment scams

Protection starts with due diligence. Research your investments thoroughly, looking for independent reviews or news articles. In particular, look for these red flags:

  • Unsolicited investment offers, often via email or social media, pushing you to invest in a "once-in-a-lifetime" opportunity. In particular, the SEC warns against relying on testimonials or celebrity endorsements.
  • Guaranteed returns on investment, which, in the realm of finance, can never be assured.
  • Overly complex strategies that obscure the investment's true nature.
  • Pressure to invest quickly to avoid missing out, a tactic designed to prevent due diligence.

At the end of the day, the SEC warns:

Any investment that sounds too good to be true probably is. Compare any promised return with the returns on well-known stock indexes. Any investment opportunity that claims you’ll receive substantially more than that could be highly risky – or be an outright fraud.

Read more: How to Prevent Spam Callers From Leaving Voicemail

Reporting and recovering from investment scams

If you fall victim to an investment scam, report it to authorities like the IC3 immediately. The IC3 online complaint registration makes it straightforward. While recovering funds can be challenging, the information you provide can help track down the scammers and potentially assist others from falling victim. The IC3's Recovery Asset Team has had success in freezing fraudulent transactions, offering a ray of hope for victims.

Final thoughts

The surge in investment scams is a stark reminder of the caution required when navigating the digital investment landscape. By staying informed, exercising skepticism, and conducting due diligence, you can safeguard your financial future against the machinations of online fraudsters. Remember, the most profitable investment you can make is in your own education and security.

[Image credit: Laptop concept generated by OpenAI's DALL·E]

For the past 20+ years, Techlicious founder Suzanne Kantra has been exploring and writing about the world’s most exciting and important science and technology issues. Prior to Techlicious, Suzanne was the Technology Editor for Martha Stewart Living Omnimedia and the Senior Technology Editor for Popular Science. Suzanne has been featured on CNN, CBS, and NBC.


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Discussion loading


From Bella on April 06, 2024 :: 6:54 pm

I was seriously devastated after I felt played by this company , They took all my funds , They have wonderful ways to make you deposit all your hard earned money in the hope of doubling the funds or making some sort of profits back and you get slammed with a tax before withdrawals , I reported to RecoveringATusa com who is a cryptocurrency expert and I got my funds


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