Giambrone & Partners banking and financial fraud litigation lawyers have a wealth of experience in recovering funds lost to financial fraud. Our lawyers constantly monitor the markets for new scams and variations on existing types of fraud. Romance fraud, one of the most insensitive and upsetting type of frauds and is rapidly becoming the most common type of consumer fraud.
The City of London police, the national lead police force for fraud and cybercrime that also hosts Action Fraud, the national reporting centre for fraud and cybercrime, believes that the estimated of £30.9 million lost to romance fraud, suggested by banks, is under estimated and a more accurate estimate would be £95 million per year, as reported in the Daily Mail, the Guardian and in the financial press.
The frequently the fraudster establishes contact with their victim on one of the many social media platforms, dating websites and chatrooms, gaining their trust, convincingly persuading the target that they are in a genuine romantic relationship. It is extremely rare for a face-to-face meeting to take place. Once trust has been built up the victim is then relentlessly targeted.
Joanna Bailey, head of banking and financial fraud litigation department, commented, "We come across all types of investment fraud. Lately, we see a rise in romance scams where affluent individuals are approached through social media platforms. The fraudsters then contact those individuals regularly (almost daily) and seek to establish romantic relationships with them to gain their trust. In the course of the conversation, they allege that they are trading/investing with a certain company which generates great profits for them." Joanna further commented "They may also allege that they have access to valuable market insights from their contacts. As the online relationship progresses, the fraudsters induce their victims to invest more and more of their money, promising to them that this will lead to higher profits or that it will allow them to be part of exclusive groups of investors. The majority of people think that they are dealing with a legitimate person and trading company. In most cases, however, there is no entity behind the broker firm and the trades opened are totally fictitious.
Novice investors in general do not know how to check whether a firm is regulated or know the regulatory rules for the provision of financial services. Alternatively, the fraudster may be registered but in an offshore jurisdiction which provides little to no regulatory protection to investors in the UK."
The fraudsters often suggest to their victim that payments should be made in cryptocurrency allegedly to avoid delays in bank transfers but in reality, this is an attempt to bypass the controls set in place by the banking regulations to prevent fraudulent transactions. Also the wrongdoers believe that the blockchain technology provides some degree of anonymity to the recipients of the payments.
However, in a legal case fought by Joanna Bailey and her highly competent team they were instrumental in the first case in Europe where the High Court of England and Wales granted an order permitting service of court proceedings via the transfer of a token on the blockchain in the case of D'Aloia v. (1) Persons Unknown (2) Binance Holdings Limited & Others, enabling the delivery to anonymous persons.
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