“Every night needs its own menu.”
Honoré de Balzac
Fraud stories in cyberspace know no bounds — fraudsters have wide open ground to work with here. By now, most people are aware that a great deal of information can be gathered about any of us simply by carefully examining our online activity: favorite films, musicians and books, a list of our closest friends and family, favorite vacation spots, near-term plans, current emotional state, employment situation — all of it is exactly the kind of information fraudsters need. Experienced hackers, for instance, can guess an email password with ease, based on a psychological profile built from a user’s online footprint. Con artists are the aristocrats of the criminal world: they don’t use force against their victims or intimidate them the way ordinary criminals do. Often they don’t even break the law at all, and know their “four hundred relatively honest ways of parting people from their money” — much like the great schemer and self-styled champion of banknotes, Ostap Bender.
Recently, “sextortion” has been growing in popularity online. Fraudsters have long used leaked data from major corporations, after the data of billions of users fell into cybercriminals’ hands. In 2017, for example, Yahoo admitted that breaches of its databases had compromised three billion accounts. Other major leaks involved Marriott International (500 million customers), LinkedIn (164 million), Adobe (153 million), eBay (145 million), Sony PlayStation Network (77 million), Uber (57 million), and Ashley Madison (31 million). Today, a new form of extortion has emerged in this space, in which fraudsters threaten to release webcam recordings of adult-content viewers, even if they were browsing in “incognito” mode. Whether the criminal actually has such recordings is, in practice, something the victim can rarely determine — but the fear of exposure alone is enough to lure victims into the trap. The perpetrators often send the victim an email containing a password to their computer or to the site with the “adult content,” claiming to have hacked the device, accessed the webcam, and recorded the victim’s “activities” while watching pornography.
The main threat from these cybercriminals is a promise to expose the victim’s sexual preferences by sending compromising emails to every contact in the address book on the victim’s computer or smartphone. The ransom demanded typically ranges from $1,000 to $1,500, usually to be transferred to a specified Bitcoin account. Victims’ reactions vary widely: some, confident they have nothing to do with such activities, simply ignore these “chain letters”; others try to negotiate with the extortionist to find out whether they really do have compromising material. There is also a category of people who, without much thought, transfer the requested sum to the stated account. Law enforcement agencies in various countries naturally try to combat such offenses, including through international cooperation. In this article, we tell the story of one such case involving a client who came to us.
Client Story: A Bitcoin Wallet Under Suspicion
A young man named Sergey (name changed) is a Ukrainian citizen who permanently resides in Lviv. He came to our law firm because of criminal proceedings opened against him in Germany on a charge of extortion. §253 of the German Criminal Code (German: Strafgesetzbuch, StGB) defines extortion as follows: coercing a person, through violence or the threat of significant harm, to perform an act, tolerate a hardship, or refrain from acting, for the purpose of unlawful enrichment. This offense is punishable by imprisonment from one to ten years, or by a substantial fine.
Under this particular scheme, threatening letters were sent en masse to various individuals, demanding they transfer a large sum to a Bitcoin account named by the fraudsters, under threat of “exposing” their activity on pornographic websites. Apparently, in some cases such intimidation genuinely hit its mark: some of the victims of the threats really did rush to pay the demanded sum, fearing exposure and hoping to “stay out of trouble.” Our client’s Bitcoin wallet came to the attention of police officers, because, according to their records, it regularly received funds from people who had fallen victim to this type of extortion. According to our client himself, he had no idea such schemes existed, much less that his crypto wallet might have been used for criminal purposes. As a result, the young man, entirely unexpectedly, turned to our lawyer, who specializes in criminal law, in the hope of restoring justice and being cleared of something he had not done.
The Lawyer’s Work: International Cooperation and a Search in Ukraine
Having received a power of attorney from the client to handle the case, the lawyer wasted no time getting to work. First, he requested the case file from the police. It turned out that officers had already been working for some time to expose the individuals behind this form of organized crime, using every legal instrument at their disposal. Sergey had initially planned to appear before the German authorities on his own for questioning, to state that he had not committed the offense he was then accused of. On the one hand, he felt fairly confident, since he genuinely had not done anything unlawful. On the other hand, on the lawyer’s advice, it was better to wait for the case file before taking any further steps. It was essential to know exactly what materials and evidence the prosecutor’s office had in order to choose the correct defense strategy for our client.
Once the requested case file was received, it emerged that, in this case, the police had made use of the option to seek assistance from Ukrainian law enforcement. Such measures for solving crimes are possible under international police cooperation frameworks. To search for evidence of our client’s involvement in the fraud scheme, at the request of the German police, Ukrainian police officers carried out a search of Sergey’s apartment. However, the search and the examination of information found on electronic devices produced no evidence whatsoever that the young man had been involved in the fraud scheme described above. Nonetheless, the German prosecutor’s office was in no hurry to discontinue the criminal case opened against Sergey, apparently still hoping to obtain evidence of his involvement in the fraud scheme at a later stage.
According to the client’s own account, obtained by the lawyer and subsequently set out in our petition, Sergey had been an active participant in online trading, in particular on a cryptocurrency exchange — a dedicated online platform designed for trading and exchanging digital coins. This exchange also allowed for converting cryptocurrency into conventional money. Sergey, who had long traded various digital assets and had also successfully traded currency on Forex, was earning money online quite successfully. In doing so, he had no idea that the bitcoins he had acquired had previously originated from a fraud scheme. As a result, our client became, entirely unexpectedly, the subject of an international criminal case.
Lack of Evidence and the Case Closed
After carefully analyzing the materials in the case file, the lawyer defending Sergey’s interests concluded that the German authorities did not have sufficient evidence of our client’s involvement in the fraud scheme he was accused of participating in. Indeed, despite the investigative measures taken by the German police with the assistance of the Ukrainian police, no material evidence or leads proving Sergey’s involvement in the offense had been found.
Given this, we had sufficient grounds to petition the German authorities to discontinue the criminal case that had been opened. Accordingly, the lawyer representing our client’s interests prepared a well-reasoned petition to the public prosecutor’s office to discontinue the criminal case for lack of sufficient grounds under §170 of the German Code of Criminal Procedure (German: Strafprozessordnung, abbreviated StPO).
Based on this petition, exactly as we had expected, the case was closed and the criminal prosecution discontinued. The young man, with what could only be described as a weight lifted off his shoulders, thanked us for our excellent and prompt work.
Conclusion: Staying Cautious in Cyberspace
In closing this article, we would once again like to advise our clients to remain vigilant and cautious, since our belief in miracles, and our need to satisfy our own ambitions or avoid unflattering public exposure, are precisely what feeds extortionists and con artists. Fraudsters exploit the instincts and misconceptions of trusting citizens, sometimes making their fortune from it. Criminal schemes grow ever more inventive and sophisticated over time — for professionals of the criminal world, there is no limit to perfection. None of us is immune, and any of us could fall for a con artist’s trap or, as in this case, end up, through no fault of our own, the subject of a criminal case.
Remember that hasty and sometimes mistaken actions in such a situation can occasionally lead to an unfortunate outcome, even if you are certain you are entirely innocent. Information you give during police questioning, for example, can lead to further questions and the disclosure of information whose release could have negative consequences. And if you are found guilty of such an offense, you may face a substantial fine or even a lengthy prison sentence. We sincerely hope that such an unfortunate fate passes all of us by — but we remain at your service at all times, knowing full well that life is rarely a smooth road.
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