The victim was targeted after criminals operating bank accounts around the world duped the Islander – an experienced investor in cryptocurrencies – into investing into fake Bitcoin over an 18-month period.
Detectives and staff from the States police hi-tech crime unit and the National Crime Agency, the UK’s equivalent of the FBI, are investigating but say it is ‘highly unlikely’ the cash will be recovered.
The gang responsible claimed they were operating out of Norway, but investigators say there is evidence of money being moved to bank accounts around the world.
Now the Jersey Fraud Prevention Forum is warning all Islanders to be ‘extra vigilant’. The JEP has learned that the victim, who was promised returns of 15 times his investment, was contacted by the criminals via email and the telephone after he made inquires about Bitcoin online.
A spokesperson for the Jersey Financial Services Commission said: ‘The victim was engaged for over an 18-month period and they were able to build trust prior to getting the victim to send the greater amounts.
‘They were made to believe that the returns would be 15 times the investment amount and the criminals were using well-known UK company names to convince them. The requests for further funds were allegedly in relation to taxes and fees which were imposed in the foreign jurisdictions where the original monies were sent.’
Mike Jones, director of policy and risk at the Jersey Financial Services Commission, said in a statement: ‘Following this Islander’s huge loss, we are warning local residents to be extra vigilant when investing in cryptocurrencies or any investment that seems too good to be true and promises high returns with no risk. Always get independent advice from a professional, and make sure the company you’re dealing with is legitimate.’
Meanwhile, Islanders are being warned about a separate scam which involves fraudsters claiming they are spying on the would-be victim through the webcam on their computer.
The States police say the fraudsters demand a ransom, saying that if it is not paid, videos and private information will be shared online.
One woman who was contacted by the fraudsters said they claimed they ‘knew her password’ and had in fact got it partially correct.
The email correspondence read: ‘I infected your computer with my private malware some time ago. It gave me full control over your computer, all your contacts and accounts. I can even turn your webcam and microphone on. I collected all your private pictures, videos, contacts, everything! I made a video showing you (through your webcam)!!!’
The fraudster then demanded $800 in Bitcoin.
Anyone with concerns should contact the States police on 612612 or call Crimestoppers on 0800 555111. Fraud can also be reported online at actionfraud.police.uk.
The Jersey Fraud Prevention Forum is releasing information on various local scams in its newsletter, which is to be distributed to all Island homes next week. There will also be a joint JFPF and Crimestoppers stand at the Jersey Boat Show this weekend.
What is Bitcoin?
Cryptocurrency, including Bitcoin, is electronic money.
Cryptocurrencies are not made out of thin air. Instead, people have their computers work many hours and expend massive amounts of electricity to ‘mine’ the digital money. Computers must solve mathematical equations to ‘create’ Bitcoins. There will only ever be 21 million Bitcoin in existence; currently there are about 17 million. Computer boffins are working to ‘mine’ the rest.
The currency was created by a man/woman/group called Satoshi Nakamoto in 2009. No more information on Nakamoto exists.
Bitcoins are not controlled by banks or governments. Traders of Bitcoin trade directly with someone else – ‘peer to peer’ – with no bank or intermediary involvement.