A significant breakthrough occurred in Hong Kong as police dismantled a fraud syndicate that utilised advanced deepfake technology to swindle men out of approximately HK$360 million (around $46 million).
This case marks the first known instance where local authorities have taken action against a group leveraging deepfake AI in romantic scams.
The operation initiated in October 2023 when the syndicate established a base in a 4,000 square foot industrial unit in Hung Hom.
Within this space, they began recruiting individuals, including university graduates, to construct fake trading platforms aimed at enticing victims into investing in cryptocurrencies.
Senior Superintendent Fang Chi-kin, leading the New Territories South regional crime unit, elaborated,
“The syndicate’s operation began with online romance.”
Victims were approached on social media, where they were initially sent AI-generated images of attractive individuals.
These artificially crafted personas were designed to appeal to various aspects of allure, including appearance, personality, and education.
Fang noted that a preliminary investigation revealed victims were often men from diverse regions, including Hong Kong, mainland China, Taiwan, India, and Singapore, who had been deceived by the deepfake technology.
Even during video calls, the victims remained oblivious to the deception.
The deepfake technology was so advanced that it seamlessly transformed the scammers’ appearances and voices into those of alluring women.
“Despite engaging in video calls, the victims continued to believe they were building a romantic relationship with supposedly superior women,” Fang explained.
After establishing an online connection, victims were gradually lured into investing in cryptocurrency through the fraudulent trading platform.
The syndicate provided fabricated profit transaction records, falsely claiming substantial returns on these investments.
Fang added,
“They even discussed future plans with the victims, creating a false sense of happiness to encourage them to continue investing for a shared future.”
Unfortunately, it was only when victims attempted to withdraw their funds that the truth emerged, leading to realisations of being scammed.
The syndicate's internal structure was multifaceted, encompassing various roles such as training, scam operations, technical support, and accounting tasks.
The police indicated that the group targeted individuals with higher education for roles such as clerks and typists, specifically to engage with English- and Mandarin-speaking victims.
Hong Kong police uncover a scam operation using deepfake technology to impersonate women, leading to over HK$360 million in fraud losses.
Superintendent Lu Wing-kan stated that these recruits were “provided with resources and training” to effectively conduct scams.
Training manuals, available in both Chinese and English, outlined how to create convincing personas and engage in conversations designed to foster trust.
“These manuals outlined how to approach different types of victims and offered guidance on creating personas and engaging in conversations to make victims like and trust them, especially regarding investment strategies, Lu shared.
The systematic approach to recruitment and training illustrates how the syndicate exploited technology and human psychology to their advantage.
The financial incentives for those involved were substantial.
Sources indicated that each swindler could earn tens of thousands of Hong Kong dollars monthly, with some potentially pocketing over HK$100,000 (about $12,800).
Following extensive investigations, police arrested 21 men and six women during a series of raids, seizing numerous computers, over 100 mobile phones, more than HK$200,000 (about $25,500) in suspected crime proceeds and luxury watches from the operations centre.
Among those arrested were five core members believed to be affiliated with the Sun Yee On triad, along with six university graduates and ten Form Six graduates.
Investigations remain ongoing, and further arrests have not been ruled out.
The Hong Kong police reported handling 508 cases of online romance scams between January and June 2024, leading to financial losses exceeding HK$242 million (roughly $30.8 million).
Moreover, they documented 1,822 cases of online investment frauds, with total losses reaching HK$1.08 billion (approximately $138 million).
The increasing sophistication of these scams, particularly involving cryptocurrency, highlights the growing threat posed by scammers exploiting emerging technologies.
The rise of AI has made it increasingly challenging for victims to discern deception, as demonstrated by the extensive losses reported by individuals across regions.
As authorities continue their crackdown, the case in Hong Kong serves as a stark reminder of the vulnerabilities that accompany technological advancements in the digital age.
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