By
Mayowa Adebajo
April 29th, 2024
Google, one of the world’s leading technology giants, has filed a lawsuit against a group of crypto scammers for allegedly defrauding over 100,000 individuals on its app store.
The complaint, filed in the United States Southern District Court in New York, claimed the defendants uploaded fake crypto trading apps and other investment opportunities on the Google Play Store to lure investors into the scheme.
Google Fights Crypto Scammers in Lawsuit
The move marks Google as the first tech company to take legal action against online scammers, aiming to set a precedent for protecting users.
The alleged scammers were simply identified as Yunfeng Sun, who also goes by the alias Alphonse Sun, and Hongnam Cheung, also known as Zhang Hongnim or Stanford Fischer.
Both are based in China and Hong Kong, respectively.
Google claimed in the lawsuit that Sun and Fischer provided fake information, including misrepresentations about their identity, location, and the nature of the apps, to obtain authorization to publish the apps on its Play Store.
Sun and Fischer started the operation in 2019 and successfully created and published at least 87 fraudulent apps to deceive users on the app store.
They allegedly lured victims to download the app through text message campaigns, online promotional videos, and affiliate marketing campaigns.
According to Google, the “texts would purport to be from the wrong numbers, but then the texters would strike up conversations with the victims, developing ‘friendships’ and ‘romantic attachments’,” the complaint said.
Victims Cries to Google for Help
One of the fraudulent apps, designed to appear legitimate, was revealed as TionRT. The app served as a crypto exchange, showing users they earned returns on their investments.
However, users were unable to withdraw their investments or profits.
Google said the app would allow users to withdraw small amounts initially, or require fees or minimum balances for withdrawals, ultimately deceiving victims out of more money.
Google was alerted to the fake apps by victims who contacted the company after unsuccessful attempts to withdraw their funds. The company claimed in the suit that users lost hundreds to tens of thousands of dollars each in the scheme.
The lawsuit was brought against the scammers under the US Racketeer Influenced and Corrupt Organizations (RICO) Act and based on violations of contract claims against the scammers.
The company is seeking a permanent injunction against the defendants and their employees and general damages to prevent them from creating Google accounts and accessing Google services in the future.
A Warning to Online Scammers
The company also claimed in the lawsuit that it suffered harm from the scheme, which threatened the “integrity” of its app store and required the diversion of resources to identify and thwart the operation.
The Alphabet-owned firm revealed that it incurred economic losses exceeding $75,000 in investigating the fraud.
Google’s general counsel, Halimah DeLaine Prado, said in a statement accompanying the lawsuit that the legal action was intended to warn online scammers.
“This litigation is a critical step in holding these bad actors accountable and sending a clear message that we will aggressively pursue those who seek to take advantage of our users,” said Prado.