Cyber-Enabled Investment Fraud via Social Media and Mobile Applications

Introduction:

This case highlights the misuse of social media platforms and mobile applications to perpetrate a fraudulent investment scheme in Afghanistan. Fraudsters created an online company and invited individuals to invest electronically, promising unrealistic returns through simple online activities such as watching short videos. The case demonstrates vulnerabilities in public awareness, regulatory gaps in digital platforms, and the risks of cross-border cyber fraud.

Background:

The case originated from suspicious transaction reports (STRs) submitted by Reporting Entity X. The reports flagged unusual patterns of small, frequent payments made to multiple individuals with no clear commercial rationale. Further intelligence revealed that the transactions were linked to a group operating through the messaging platform Telegram, advertising investment opportunities in “Company A.” The organizers did not disclose their identities, had no registered address or physical presence in Afghanistan, and were suspected to be foreign nationals. Their operations appeared to be supported by local representatives who recruited individuals, particularly those with limited financial literacy.

Method of Operation:

Fraudsters created a Telegram group under the name of “Company A” and invited members of the public to join.
Potential investors were encouraged to deposit funds electronically into accounts controlled by the scheme’s representatives.
To attract more participants, the scheme offered small financial rewards to investors in exchange for watching short (15-second) promotional videos on an application known as “Z.” These payments were presented as legitimate investment returns.
The group also launched a dedicated mobile application, which generated individual user accounts and allowed centralized management and coordination of investors.
The business model relied on continuous recruitment of new investors to fund payouts to earlier investors, consistent with Ponzi-style operations.
Concerns were raised that once the number of investors reached a critical level, the organizers would disappear, taking with them the invested funds.

Red Flags / Indicators:

Investment opportunities promoted exclusively through Telegram groups and social media, with no licensed or registered entity.
Promises of guaranteed or unusually high returns for minimal effort (e.g., watching short videos).
Organizers concealed their identities and lacked any physical presence, license, or registration in Afghanistan.
Use of mobile applications for account management without transparency or regulatory oversight.
Small but frequent electronic payments to numerous individuals, inconsistent with normal business activity.
Involvement of local representatives targeting individuals with limited financial literacy.

Outcome:

For the time being, the scheme is under active investigation by law enforcement agencies. While the full financial impact remains under assessment, preliminary findings indicate that hundreds of individuals had invested varying amounts. The risk of large-scale financial loss is significant if the scheme collapses.

Updated On: May 2023