Revealed: how Londoners are being fleeced out of £3m each month in fake wine and diamond scams

Detectives at Scotland Yard’s Falcon cyber-fraud crime unit said investment fraud was one of the most prolific crimes they see
Justin Davenport20 August 2015
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Conmen are fleecing Londoners out of nearly £3 million a month in a range of sophisticated investment scams, a senior police officer warned today.

Thousands of people are falling victim to cons involving speculating in goods ranging from rare metals and wine to property and alternative energy.

Det Supt Jayne Snelgrove, head of Scotland Yard’s Falcon cyber-fraud crime unit, said investment fraud was one of the most prolific crimes being tackled by her force.

“We are seeing significant numbers of investment frauds as conmen target older people, not just because they are vulnerable but because of the cash in their accounts,” she added. “These are too-good-to-be-true investment opportunities. The commodity is almost irrelevant.

“There are wine investment frauds, coloured diamonds are often offered, plus oil, carbon credits — you name it.”

In some cases victims were persuaded to invest in foreign land to be used for crop growing. They are often given official-looking documentation regarding the investment, only to find the company disappears overnight with their cash.

Police also say there is evidence of scammers targeting the elderly to get hold of pension savings in the wake of the recent financial reforms. A number of elderly victims put money into what they believed were “Government over-65 bonds” — but which turned out to be fake investments.

City of London Police are also reporting a surge in investment scams operating from some of the Square Mile’s top addresses, including Tower 42. Figures show that between February and April this year 115 victims reported losing £8.2 million — a rate of £2.7 million a month, or £92,134 each day, in investment frauds alone.

Det Supt Snelgrove said conmen typically used a “Ponzi-style” scheme where victims’ investment money was passed on to a previous victim, so people believed they were getting a good return — until the money ran out.

Speaking a year after the 300-strong crime unit’s launch, she said investment fraud is just one of a range of cons it is investigating. Officers at four new “cyber-crime hubs” in London are at work on 1,400 inquiries, the vast maj- ority involving at least five victims. A highly specialised squad is tackling complex inquiries, involving 25 to 30 organised crime groups, which could take years to unravel.

One probe involves a con where victims are encouraged to transfer money between accounts — or have the acc- ounts taken over remotely and drained of funds. Losses total millions.

So far the squad has made 650 arrests and charged 250 people with a range of offences from distributed denial of service attacks to blackmail. In total, 24,000 reports of fraud were passed to the squad last year, a figure believed to be a fraction of total cyber offences committed. The figures come as a recent report showed that Londoners were now more worried about online crime than the traditional variety.

Frauds routinely investigated by the cyber-crime unit include auction site scams, where gangs claim to sell cars or property but neither exists. Others involve romance and couriers.

Police are also concerned about mandate fraud, where companies are being conned out of millions of pounds a year by gangs claiming to be suppliers who have changed their bank details.

The scams, often backed by sophisticated paperwork, can cost firms about £50,000 a time and are only detected when suppliers ask for payment.

Detectives say conmen are increasingly posing as police officers to trick people, notably in courier frauds.

Det Supt Snelgrove said: “We continue trying to educate people that neither we nor your bank will ever ask you for pin numbers or bank details.”

In a new development, police see victims receive cold calls by scammers claiming to work for software firms and who allege there is an issue with the victim’s computer. If they are granted access to the machine they can then gather confidential information.

Det Supt Snelgrove added: “Our focus is very much on making Londoners safe but this is a national and international issue as well as a London one.”

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