Daily fraud update: 20th November

Chris Lee

US man sent to prison over scam ICOs

A man from Brooklyn in the US city of New York has been sent to prison for 18 months over allegations that he operated two scam initial coin offerings (ICOs).

Maksim Zaslavskiy, who worked as a computer programmer, was accused of running ICOs which were supported by property and precious commodities such as diamonds.

However, these assets are now believed to have not existed.

The scheme managed to sign up a four-figure number of investors, who in total handed over around $300,000 in cash over the course of a period in 2017.

Zaslavskiy was found guilty last year – although his sentencing has only just come about.

According to Richard Donoghue, who is the US attorney for the Eastern District of New York, Zaslavskiy’s crime was not as modern as it might have seemed.

“Zaslavskiy committed an old-fashioned fraud camouflaged as cutting-edge technology. […] This office will continue to investigate and prosecute those who defraud investors, whether involving traditional securities or virtual currency”, he said.

Investigator in Kenya releases warning over digital fraud

A senior police investigator in Kenya has told Kenyans to be mindful of the risk of scams and fraud involved in financial transactions online – and has highlighted foreign exchange in particular as an area to watch.

George Kinoti, who serves as the country’s director of criminal investigations, has been named as being behind official posts on Twitter which addressed the issues.

The tweets, posted on the official DCI Kenya account, relate to various types of online fraud.

The authority advised Kenyans that there had been “overwhelming” reports of fraud already from many parts of the major African country – and that victims’ “hard-earned” cash could be at risk if appropriate measures were not taken.

“FOLLOWING overwhelming reports of Online Fraud to our DCI Offices across the country, we wish to CAUTION Members of the Public against engaging in Online Transactions with Companies, Agencies and/or Individuals they have no credible information about, to avoid putting at stake their hard-earned money”, the post said.

It also went on to highlight specific areas and practices which were vulnerable to financial fraud.

Some of these were general in nature, such as “online groups luring jobless Kenyan youth on promises of getting them jobs within and abroad” or “online product vendors who disappear once payments are done in advance”.

 “Online cash traders (Forex Exchange)” was also specifically mentioned – as were “social media sites bearing prominent people’s profiles aimed at misleading and extortion”, a common tactic of forex and crypto fraudsters.

On a practical level, the DCI encouraged people to be more proactive about reporting the loss of any sensitive personal items which might facilitate financial fraud to police as it happened.

The list of such items included “ID Cards, Sim Cards/Mobile phones & Laptops, Personal Documents including Academic Testimonials & Driving Licenses”.


Chris Lee

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