Ukrainian officials were informed of the allegations in a meeting on March 2, according to an Organized Crime and Corruption Reporting report published on March 3.
Foreign policy consequences of the fraud
Swedish Minister of Foreign Affairs Ann Linde championed an investigation published by national newspaper Dagens Nyheter (DN). The article alleges that the Ukraine-based Milton Group, ostensibly an IT support company, defrauded victims in developed countries by proposing fake Bitcoin (BTC) investment schemes.
The group reportedly scammed victims for over $70 million, with several examples of elderly people losing their life’s savings. Milton Group operates mainly out of Kyiv, Ukraine’s capital.
Linde shared the findings with unnamed Ukrainian officials, expressing her outrage at the findings. She said:
“It is really upsetting to see how they bluff Swedish retirees who have to leave their homes and live on a minimum subsistence level. And then they sit there, laughing.”
The minister urged the Ukrainian government to take decisive action in response to the media report, adding:
“The most important thing is that [the allegations] get attention. I don’t know if this information exists in Ukrainian, otherwise it is up to DN to make sure it does.”
Government officials also criticized the lack of oversight by Facebook, which allowed Milton Group’s ads to circulate.
Details of the alleged fraud
The investigation was made possible by an unidentified whistleblower who reported on the inner workings of the operation. He claims to have been part of a “retention” team and was expected to make 300 calls each day. The victims were initially hooked via Facebook ads that targeted people interested in cryptocurrency.
The callers also frequently changed their presented identities to continue “squeezing the money” from clients. After selling a victim on a phony investment scheme, they would pose as lawyers and financial advisors promising to return the money that the victim invested — for a fee.
Some victims reportedly transferred over $1,000 every month to the group, while one elderly citizen was defrauded for as much as $200,000.
The whistleblower also revealed that the “sales” staff received different commissions based on payment method. Transfers via credit card and transmission services like Moneygram were valued at 4% and 6% respectively. Transfers in cryptocurrencies compensated the “salesman” with as much as 9%.