On November 23, 2023, the Warsaw regional prosecutor's office and the police central investigative bureau announced that they dismantled a fraud group posing as law firms that offer services to retail investors who had previously been defrauded on the Forex and cryptocurrency markets.
The fraudsters contacted victims through the Internet, forums, and social media channels to respond to their pleas for help in recovering funds from dishonest brokers and crypto firms. However, the fraudsters charged upfront commissions ranging from five to ten percent of the funds the victim wanted to recover.
In this way, the fraudsters are said to have swindled more than €2 million from at least hundreds of victims who were cheated for a second time. So far, the police have succeeded in arresting 14 people on charges of fraud and attempted money laundering.
The phony law firms took a series of bogus legal steps to recover the funds. Investigators determined that the entire process was designed to convince victims that they were actively working to recover the funds.
"In reality, there was no real possibility of the victims recovering their funds. The individuals employed at the firm lacked legal education and were hired as telephone operators trained to conduct conversations with clients to persuade them to invest money," the Polish police commented in an official statement (automatically translated by Google Translate).
Interestingly, some of those arrested were already known to Polish law enforcement because of their past involvement in criminal activities on the Forex market.
In 2019, scammers in Cyprus adopted a similar tactic by posing as the local regulatory commission, CySEC. they claimed in a message sent to retail investors that they could assist in the recovery of funds if they suspected that the broker where they had deposited acted illegally.
"CySEC would like to remind the public that it never sends unsolicited correspondence to investors or members of the public, nor does it ever request any personal data, financial or otherwise," the regulator stated in its 2019 announcement.
Also in 2019, the UK's FCA issued a warning to consumers about the "recovery rooms" scam. The regulator described how the scam works and how to avoid it.
Three years ago, the Belgian Financial Services and Markets Authority warned about "recovery rooms" fraud targeting the country's citizens.
(Source: Finance Magnates)