According to the FBI’s latest report from the Internet Crime Complaint Center (IC3), investors lost a record $5.6 billion due to crypto-related financial crimes in 2023, a 45% increase from 2022.
The report, released on Monday, stated that investment fraud was the most common and costly type of crypto-related fraud in 2023. Of the more than 69,000 crypto-related crime reports the agency received last year, nearly half were related to investment fraud, with losses amounting to $4 billion. While crypto crimes represented about 10% of the complaints filed with the FBI, the $5.6 billion figure accounts for nearly half of the total losses reported.
Investment scams typically promise victims high returns with minimal risk, and these types of scams have been increasing in recent years. The most prevalent type of crypto-related investment fraud last year was what the FBI described as “trust-based” scams, also known as “pig butchering” scams. In these schemes, scammers build relationships with victims (often via messaging apps) and then encourage them to invest large sums of money in fraudulent cryptocurrency platforms, from which victims are unable to withdraw funds.
According to the FBI report, many victims of such pig butchering or investment scams “have accumulated significant debt to offset the losses from these fraudulent investments.” While those aged 30 to 49 filed the most complaints related to investment scams, victims over the age of 60 reported the highest losses—exceeding $1.24 billion in just one year.
Although IC3 accepts complaints from both U.S. citizens and foreign nationals, U.S. investors accounted for 83% of all crypto-related fraud reports received last year. California residents led in both the number of complaints (9,522) and the amount of losses ($1.2 billion).
Human Trafficking Connection
A 2022 investigation by ProPublica, later followed by probes from organizations like the United Nations, revealed that many cryptocurrency investment scammers are victims of human trafficking, held captive by so-called “pig butchering” gangs across Southeast Asia and forced to carry out fraud.
The FBI report warns U.S. citizens traveling abroad of the risk of false recruitment advertisements linked to labor trafficking at overseas scam operations.
“These work sites imprison workers and use intimidation tactics to force them into participating in fraudulent schemes. Criminals post fake job ads on social media and online job boards, primarily targeting people in Asia,” the report said.
“Workers are often told they must pay for transportation and other costs, leaving them in debt from the start. They are then required to work off their debt while also covering food and lodging expenses. Criminals use the increasing debt and fear of local law enforcement as additional means of control. Trafficked workers are sometimes sold and transferred between different work sites, further increasing their debt,” the report continued.
#Scandal

🚀 The early 2000s witnessed one of the most significant financial scandals in India’s history, known as the Stamp Paper Scam or Scam 2003. This scandal, orchestrated by Abdul Karim Telgi, involved the counterfeiting of stamp papers and postage stamps, resulting in a massive fraud amounting to billions of rupees. It exposed severe loopholes in the Indian financial and administrative systems and shook the nation’s trust in its institutions.
Background of Abdul Karim Telgi
Abdul Karim Telgi, born in Karnataka, started his career as a fruit vendor. His journey into the world of crime began with minor illegal activities, eventually leading him to the lucrative business of counterfeit stamp papers. Telgi capitalized on the weak enforcement and monitoring systems in place within the government’s stamp paper production and distribution sectors. Over time, he built a vast network that facilitated the large-scale production and distribution of fake stamp papers across multiple states in India.
The Modus Operandi
Telgi’s operation was intricate and sophisticated. He managed to infiltrate the Nashik Security Press, a government facility responsible for printing various secure documents, including stamp papers. By bribing officials, Telgi gained access to the machinery and raw materials required for producing authentic-looking stamp papers. These counterfeit documents were then distributed through a network of agents to various states, including Maharashtra, Karnataka, and Gujarat.
The fake stamp papers found their way into the hands of banks, insurance companies, and other financial institutions, which used them in legal transactions. This widespread circulation caused significant financial losses to the government and private entities, with estimates suggesting the scam could be worth around ₹20,000 crores (approximately $3 billion).
Discovery and Investigation
The scam came to light in 2002 when police in Bengaluru seized a truck loaded with fake stamp papers. The investigation soon revealed the vast extent of Telgi’s operations. A special investigation team (SIT) was formed to delve deeper into the case, uncovering layers of corruption and complicity within the system. High-ranking police officers, politicians, and bureaucrats were found to be involved, either directly or indirectly, through bribes and favors.
The investigation faced numerous challenges, including threats to officials and witnesses, tampering of evidence, and systemic corruption. Despite these hurdles, the SIT managed to gather substantial evidence against Telgi and his associates.
Legal Proceedings and Convictions
Telgi was arrested in 2001, and subsequent investigations led to the arrest of several other individuals involved in the scam. The legal proceedings were lengthy, given the complexity of the case and the involvement of numerous high-profile individuals. In 2006, Telgi confessed to his crimes in court, expressing remorse for his actions.
In 2007, a special court convicted Telgi and sentenced him to 30 years of rigorous imprisonment along with a hefty fine. The court also convicted several of his associates and government officials who had facilitated the scam. The judgments were seen as a significant step towards restoring public trust in the legal system, though the damage caused by the scam was irreparable.
Impact and Reforms
The Stamp Paper Scam of 2003 had far-reaching implications for India’s financial and administrative systems. It highlighted the need for stringent monitoring and enforcement mechanisms to prevent such fraudulent activities. In response, the government implemented several reforms to enhance the security and integrity of stamp paper production and distribution.
One of the key measures was the introduction of e-stamping, an electronic method of paying stamp duty, which significantly reduced the risk of counterfeiting. Additionally, efforts were made to improve the accountability and transparency of the officials involved in the process.
Conclusion
Scam 2003 stands as a stark reminder of the vulnerabilities within financial systems and the extent to which corruption can undermine public trust. Abdul Karim Telgi’s audacious operation not only defrauded the nation of billions but also exposed the deep-rooted corruption within its institutions. The subsequent legal actions and reforms were essential steps towards addressing these issues, but the incident remains a cautionary tale for vigilance and integrity in governance.
The legacy of the Stamp Paper Scam continues to influence policies and practices in India, ensuring that such a massive breach of trust and legality is not repeated.#ScamReport #Scandal #CPIAlert #CryptoPCEWatch