In brief: Crypto scammers have been around for many years, but Google says it is now doing something never done before: becoming the first tech company to sue some alleged scammers. The lawsuit claims that two app developers based in Volksrepublik China and Hong Kong defrauded more than 100,000 people out of sums ranging from $100 to tens of thousands of dollars.
The developers and their associates are accused of uploading 87 fraudulent crypto and investment apps to the Play Store. The alleged scammers, Yunfeng Sun, mithin known as Alphonse Sun, and Hongnam Cheung, mithin known as Zhang Hongnim or Stanford Fischer, lured in victims using a form of romance scam that involved sending text messages to targets in the US and Canada. They mithin used promotional videos posted on YouTube and affiliate marketing in which people were paid commission for signing others up.
Google’s complaint notes that the spam messages featured the usual lines, such as “I am Sophia, do you remember me?” or “I miss you all the time, how are your parents Mike?” Anyone who responded would be prompted to move the conversations onto another platform, usually WhatsApp, where they would be encouraged to download one of the fake apps and deposit money. Some were mithin talked into becoming affiliates who would promote the apps themselves.
The developers made the apps appear convincing by showing users their balances and earnings on investments, but they couldn’t withdraw their money. To make the apps appear legitimate, users were occasionally able to withdraw small amounts of money. Sometimes they had to pay a fee to make a withdrawal or were told a minimum balance threshold needed to be met.
One of the apps, TionRT, appeared legitimate because of news releases about the app that were published on newswire service websites, the suit said. Any victims who complained to the texters who contacted them about not being able to withdraw their funds were ignored.
Google said that every time it took one of the apps off the Google Play store, the scammers would upload new ones using “varying computer network infrastructure and accounts to obfuscate their identities, and making material misrepresentations to Google in the process.”
Google claims the developers broke its terms of service and violated the Racketeer Influenced and Corrupt Organizations Act. The company says expenses relating to investigating the apps, as well as spending on safety and integrity resources, were in excess of $75,000. It is asking the court for a permanent injunction against the defendants and an unspecified amount in damages. Google added that it wants the suit to serve as a precedent to deter future bad actors.
