The FBI says fraud on LinkedIn is a “significant threat” to the platform and consumers

SAN FRANCISCO – Scammers exploiting LinkedIn to lure users into cryptocurrency investment programs pose a “significant threat” to the platform and consumers, according to Sean Ragan, the FBI special agent in charge of field offices in San Francisco and Sacramento, California .

“It’s a significant threat,” Ragan said in an exclusive interview. “This type of fraudulent activity is significant, and there are many potential victims, and there are many past and present victims.”

Sean Ragan, FBI special agent in charge of the San Francisco and Sacramento field offices.

Source: CNBC

The scheme works like this: a scammer posing as a professional creates a fake profile and approaches a LinkedIn user. The scammer starts small talk over LinkedIn messaging and eventually offers to help the victim make money through a crypto investment. Victims polled by CNBC say because LinkedIn is a trusted platform for business networking, they tend to believe the investments are legitimate.

Typically, the scammer directs the user to a legitimate crypto investment platform, but after gaining their trust over several months, they urge them to switch the investment to a scammer-controlled website. The money will then be deducted from the account.

“So that’s how the criminals make money, that’s where they focus their time and attention,” Ragan said. “And they’re always thinking of different ways to bully people and businesses. And they spend their time doing their homework, defining their goals and their strategies and the tools and tactics they use.”

Ragan said the FBI has noticed an increase in this particular investment scam. This differs from a long-standing scam in which the criminal pretends to show a romantic interest in the subject in order to convince them to part with their money. The FBI confirmed it has an active investigation but could not comment as the cases are open.

In a statement, LinkedIn acknowledged that there had been recent incidents of fraud on its platform and told CNBC that “we enforce our policies, which are very clear: fraudulent activity, including financial fraud, is not allowed on LinkedIn.” We work every day to protect our members, and that includes investing in automated and manual defenses to detect and combat fake accounts, incorrect information and suspected fraud.”

“We work with peer companies and government agencies from around the world to help protect LinkedIn members from malicious actors. If a member encounters or is a victim of fraud, we ask that they report it to us and to local law enforcement. “

Oscar Rodriguez, senior director of trust, privacy and equity at LinkedIn, said, “Trying to identify what is and isn’t fake is incredibly difficult.”

“One of the things I’d really like to do more of is proactively educate members,” Rodriguez said. “Letting members know or basically allowing them to understand the risks they may be facing.”

According to its semi-annual scam report, the company removed more than 32 million fake accounts from its platform in 2021. From July to December 2021, its automated defenses stopped 96% of all fake accounts — including 11.9 million stopped upon registration and 4.4 million proactively restricted, the report said. Members reported 127,000 fake profiles, which were also removed.

LinkedIn said its automated defenses caught 99.1% of spam and scam attempts, totaling 70.8 million, over the same period. Another 179,000 were removed after members reported them. LinkedIn said there were no estimates of how much money was stolen from members through its platform.

The company warned users in a Thursday night blog post on its platform against sending money to people they don’t know and acting on accounts with questionable work history or other red flags like bad grammar.

That’s little consolation for Mei Mei Soe, a Florida benefits manager, who says she lost $288,000 – her entire life savings – to a scammer on LinkedIn. It all started innocently with someone whose profile said he was an executive at a fitness company in Los Angeles who tried to get in touch with her last December. They began chatting first via LinkedIn and then a messaging app, and she said she was intrigued by his offer to help her make money.

Mei Mei Soe, fraud victim.

Source: CNBC

“He asked me if I was on LinkedIn to network professionally or if I was looking for a job,” Soe said. “I don’t trust anyone but we started talking and over time he gained my trust.”

When the conversation finally turned to investing, Soe said, “He showed me how he profits from his investments and told me to start investing in, which I know is a legit one site acts. I started with $400.”

The scammer convinced them to move their investments to a website they controlled. Over several months, Soe made a total of nine transactions, including bank loans and money borrowed from friends, hoping to start a small business with her proceeds. But Soe would soon learn that the connection she made on LinkedIn wasn’t who he said it was. She ended up losing all her money.

“I still remember the day,” Soe said. “When I realized I had been scammed I tried to contact him but couldn’t find him anywhere. I work hard, and every single dollar I save, I work hard to save. It hurts.”

She said she never thought she would be scammed on LinkedIn. said it will immediately delete accounts linked to a scam.

“We take a proactive approach to managing and protecting against external threats, including fraud and phishing campaigns,” it said in a statement to CNBC. “As with all financial transactions, whether fiat or crypto, it is important to ensure that the account receiving funds is legitimate and its owner is identified and trusted prior to the transfer.”

Soe’s story is not unique. A group of victims who were scammed on LinkedIn and meet regularly via Zoom recently invited a CNBC reporter to attend the session as long as attendees’ faces were hidden and their names were not revealed. Their losses ranged from $200,000 to $1.6 million.

“We never thought that such a malicious intent could be behind a LinkedIn profile,” said one victim who lost $350,000.

“The scammers hide behind successful businesses,” said another victim who lost $200,000. “One of the main reasons I accepted the invitation was because of the person who indicated on their profile that they work for a reputable company.”

“We lost a lot of money,” said one victim who lost $700,000. “And it’s not just all of our savings, people have lost their homes and their car loans. It’s life-destroying and soul-destroying.”

Ragan said he understands the victims’ pain but they shouldn’t blame themselves.

“It’s not their fault they were victims,” ​​Ragan said. “It’s the offender’s fault. It’s the criminal’s fault. They spend their nights and days thinking about ways to bully and scam people. That’s how they make their money from illegal profits. And the people, the victims of it become, they are victims.”

The Global Anti-Scam Organization, a victim advocacy and support group, has traced the majority of perpetrators back to Southeast Asia.

“They usually target victims on LinkedIn by showing they have some entrepreneurial spirit,” said Grace Yuen, spokeswoman for the Global Anti-Scam Organization. “They might say they have a degree from a well-known university, then they say they’re in finance or investing. Sometimes they even pretend to work in the same industry as you.”


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