On Thursday, April 4, tech giant Google filed a lawsuit against a group of fraudsters for defrauding over 100,000 people worldwide into uploading fake investment and crypto exchange apps to the Google Play Store.
Google is cracking down on crypto scammers
With this development, Google has taken credit for being the first tech giant to crack down on crypto scammers, while also making it a legal priority to protect users. Google states in its lawsuit:
The defendants made “multiple false statements to Google to upload their fraudulent apps to Google Play, including but not limited to false statements about their identity, location, and the type and nature of the app being uploaded.”
Google, a subsidiary of Alphabet, is taking legal action against a group of fraudsters, invoking the Racketeer Influenced and Corrupt Organizations Act (RICO) in addition to claims of breach of contract. The company claims that fraudsters have orchestrated a scheme that involves the creation and distribution of at least 87 fake apps aimed at tricking users.
Halimah DeLaine Prado, Google’s general counsel, described the lawsuit as an opportunity to combat fraudulent activity within the cryptocurrency space. Speaking to CNBC Crypto World, she further highlighted the significant financial impact of cryptocurrency fraud, citing more than $1 billion in losses in the US in 2023 alone. Prado emphasized Google’s commitment to protecting users and deterring future fraudulent behavior through legal action.
Fraud details
Google’s lawsuit notes that the fraud has been going on since 2019 while identifying the alleged fraudsters as Yunfeng Sun, also known as Alphonse Sun, and Hongnam Cheung, also known as Zhang Hongnim or Stanford Fischer.
The pair allegedly enticed individuals to download their apps from Google Play and various other platforms using three primary tactics: text message campaigns via Google Voice targeting victims primarily in the US and Canada, promotional videos distributed on YouTube and other online platforms, and affiliate marketing campaigns offering user commissions for recruiting others.
According to the lawsuit, Sun, Cheung and their associates created the apps to give the appearance of legitimacy, showing fake balances and ROI to users. However, users could not withdraw their investments or the profits they believed they had earned.
To instill confidence in users, the defendants allegedly allowed initial withdrawals of small amounts of money from the apps, the lawsuit alleges. Some users were allegedly told they had to pay a fee or maintain a minimum balance to access their funds, a tactic Google claimed “duped some victims into further financial loss.”
Taking corrective measures
Victims who were unable to withdraw their funds alerted Google to the existence of fake apps.
“We have a dedicated cybersecurity team that continuously monitors all of our platforms and services for opportunities to improve user protection,” said DeLaine Prado. She mentioned that Google sometimes cooperates with law enforcement agencies.
According to the complaint filed by Google, whenever the company removed the fake apps, the fraudsters immediately created new ones and uploaded them to Google Play. They used different computer network infrastructures and accounts to disguise their identities and provide false information to Google in the process. Google is also working on allowing Bitcoin ETF ads on its platform.