Unveiling the Biggest Scams of the Last 12 Months: Lessons Learned

We all know a friend or family member who's been scammed — it's one of those events that can easily ruin someone's day. However, scams and frauds have escalated to a whole new level. We're not just talking about your run-of-the-mill schemes. Modern scammers are now elaborate conmen disguising themselves as entrepreneurs, political dissidents, and even visionaries. Usually, to propagate the scam, the media reports on these characters, and investors lap it up. Before you know it, billions of dollars disappear into the pockets of these financial predators. Recently, the rate and scale of these scams have been staggering. From Sam Bankman-Fried's FTX disaster to a TikTok trend that cheated the Australian government, let's dive into the most notorious frauds of the past 12 months.

Crypto Fraud: The FTX Disaster 🚀

The FTX disaster is probably the most famous case on this list. It was a multi-billion dollar fraud scheme involving a young billionaire, his ex-girlfriend, and a web of lies that collapsed in front of the entire world. Sam Bankman-Fried, an MIT graduate, launched FTX in 2019, a crypto exchange and hedge fund that soon became a hit with investors, thanks to celebrity endorsements. At first glance, Sam appeared to be a philanthropic, humble nerd who had stumbled into a lot of wealth. However, this was a carefully crafted image. Behind the scenes, FTX was run by a bunch of college kids, including Sam's on-again, off-again girlfriend, Caroline Ellison, and some of his college buddies.

FTX funneled customer money for personal expenses and threw even more customer money into risky trades through a sister firm, Alameda Research, run by Caroline Ellison. Unfortunately, FTX lost the customer's money in bad trades. However, Sam continued to put on a brave face and was still doing interviews while the media loved him.

In November 2022, news broke that FTX's books contained a large number of tokens backed by nothing, made out of thin air. FTX customers panicked and wanted their money back, but it had all been lost in bad trades. In the end, authorities charged Sam with stealing at least $10 billion from FTX customers. It was a real slap in the face to US regulators, showing that the systems in place to keep us safe had completely failed.

Lessons Learned from the FTX Disaster 📉

• Don't be swayed by celebrity endorsements.
• Always scrutinize the management team's background and experience.
• Beware of over-complicated investment schemes that promise high returns with little risk.

SafeMoon: Safe to the Moon or Doom? 🌕

Another crypto-related fraud case that made headlines in 2023 was SafeMoon. Launched in March 2021, SafeMoon was a crypto project with an eyebrow-raising premise: the price was guaranteed to go "safely to the moon". The idea was to lock investor funds into a liquidity pool. However, this pool had a leak — a leak straight into the pockets of the creators of the scam.

The scam was exposed by the SEC and the Department of Justice, who charged the top executives of SafeMoon with fraud. They alleged that they withdrew more than $200 million from the project to fund their luxury lifestyles, including luxury cars and homes. SafeMoon paid celebrities and YouTubers to promote their token on social media without disclosing their financial relationships or the risks involved.

Lessons Learned from SafeMoon 🚀

• Be wary of projects that promise guaranteed high returns.
• Always question the transparency and ethics of how influencers promote investment opportunities.
• Scrutinize the financial health and history of any investment project.

Corporate Con: Charlie Javis and Frank 📈

How do you go from being perceived as a promising entrepreneur to scamming JP Morgan, one of the biggest banks in the world? Charlie Javis knows. She was the founder and CEO of Frank, a fintech startup that claimed to help students access financial aid and scholarships. Frank offered a platform that simplified the process of applying for federal and state aid, as well as private loans and grants. It had millions of users, hundreds of partners, and a lucrative deal with JP Morgan. But it was all a lie.

Charlie approached a dodgy professor who fabricated most of the user data. She successfully deceived JP Morgan into buying her startup for $175 million, pocketing $45 million for herself. JP Morgan soon realized they'd been scammed when they tried to contact the users and received hardly any responses. The SEC charged Charlie with securities fraud, wire fraud, bank fraud, and money laundering. She now faces a long prison sentence if convicted.

Lessons Learned from Charlie Javis and Frank 📚

• Always validate the authenticity of user data and metrics in any acquisition deal.
• Do thorough due diligence, especially when the deal seems extraordinarily lucrative.
• Scrutinize the background and conduct of founders and key employees closely.

The Fall of Credit Suisse 🏦

One of the most shocking cases in recent months was the collapse of Credit Suisse, a prestigious Swiss bank. Over time, a rot started to fester within the bank's internal culture, involving fraud, money funneling for weapons to foreign governments, and other banking crimes. By 2019, things had gotten so out of control that the CEO was caught spying on a former executive who joined their main rival, UBS Bank.

By the end of 2022, clients had taken out $119 billion from the bank, and it failed to raise enough capital to stay afloat. The Swiss government intervened, granting $18 billion for a merger between UBS and Credit Suisse in March 2023. This was to prevent contagion in the global financial system. Credit Suisse was sold to its main rival UBS for a poultry $3.3 billion. Investors suffered huge losses, and the bank's brand and reputation were trashed.

Lessons Learned from Credit Suisse 📉

• Always be aware that even the most prestigious banks can fall victim to internal rot.
• Be vigilant and question suspicious activities within well-established financial institutions.
• Understand that large-scale withdrawals can precede a financial institution's collapse.

The TikTok GST Scam in Australia 🇦🇺

A seemingly harmless TikTok trend resulted in a staggering $4.6 billion loss for Australian taxpayers. The scam exploited the Australian tax system, specifically the Goods and Services Tax (GST), which is a 10% tax on most things in Australia. Scammers created fake businesses and submitted fake statements claiming to have spent large amounts of money on their businesses to receive GST refunds.

The scheme gained traction through TikTok, where influencers promoted it as an easy way to pocket money from the government. The Australian Taxation Office (ATO) detected the fraud and launched an extensive investigation. Despite stopping $2.7 billion in fraudulent claims, they had already paid out $1.6 billion before catching the scammers. The scam roped in at least 56,000 participants, mainly from low-income backgrounds.

Lessons Learned from the TikTok GST Scam 🎥

• Always be skeptical of online schemes promising easy money.
• Social media influencers can play a significant role in promoting fraudulent activities.
• Government tax authorities need better, faster ways to detect and prevent fraud.

The Day Before: A Gaming Scam 🎮

Imagine a video game that generates so much buzz it becomes one of the most anticipated titles of the year, but in reality, it was a colossal scam. The Day Before was announced by its developer, Fantastic, in January 2021. It was supposed to be an open-world, beautifully rendered MMO zombie shooter. However, the game was plagued by frequent crashes and a barrage of bugs, and it was nothing like the trailers had promised.

The game's creators, two brothers named Edward and Aen Gutter, had only two people on their team. They claimed to have assistance from volunteers worldwide. As the trailers were analyzed, it became evident that they had stolen content from other games and built the game from stock library assets. Within four days of the game's early release, the studio announced its closure and deleted all their online presence.

Lessons Learned from The Day Before 🎮

• Always scrutinize the claims of game developers, especially if they promise groundbreaking achievements.
• Be aware of the potential for asset dumping and content theft in game development.
• Realize that the excitement surrounding a game can be manipulated to fund scams.

Political Dissident Fraud: The Case of Miles Guo 🌍

If you're fleeing your home country and want to expose the wrongdoings of your government, people will listen to what you have to say. Miles Guo, a former property tycoon who fled China in 2014, claimed to be a dissident and media mogul in America. He started a media platform called GTV to expose the Chinese Communist Party's alleged wrongdoings and created a network of informal groups, recruiting thousands of people and raising $1 billion.

Guo and his right-hand man, William Je, created more schemes to attract investors. They promised large returns but diverted the funds to their lavish lifestyles, including properties, luxury cars, and yachts. US authorities eventually exposed the scam, arrested them, and seized over $632 million. They face multiple counts of fraud and money laundering.

Lessons Learned from Miles Guo's Fraud 📉

• Be cautious when investing in businesses that claim to operate under political dissidence.
• Scrutinize the financial claims and the management's background in any investment opportunity.
• Understand that lavish lifestyles funded by investment schemes are often a red flag.

The Rise of AI and Future Scams 🤖

With the rise of AI, the proliferation of scams is expected to increase. AI can help scammers lower their costs and reduce the risks traditionally associated with scamming. They can train AI models to execute scams without needing a team of criminals, decreasing their chances of getting caught. The future will likely see more sophisticated and harder-to-detect scams.

Being Vigilant in the Age of AI 🕵️‍♂️

• Stay informed about the latest technological advancements in scams.
• Implement robust cybersecurity measures to protect personal and financial information.
• Be skeptical of unsolicited offers and investments that seem too good to be true.

These cases show how easily people can fall for elaborate scams and how difficult it can be for authorities to catch up. The financial world is becoming murkier, and with a faltering economy and promises of quick wealth, scammers find new ways to exploit vulnerabilities. If an offer feels too good to be true, it probably is.

Stay Safe and Informed 🔒

Drop your thoughts in the comment section below and let's keep the conversation going. Stay vigilant and aware of the Shady schemes and fraudsters lurking out there. The more we share and discuss, the better equipped we are to prevent becoming the next victim.

For a better experience visit our official blog site

Leave a comment

Leave a comment

Name*

Email*

Comment*

Send

• Share on:
• WhatsApp
• Deel
• Tweet
• Pin it
• Messenger
• Email

---