Google Sues 2 Individuals for Alleged Crypto Investment Fraud Using its Play Store

American tech giant Google recently filed a lawsuit against two developers for uploading almost 90 fraudulent crypto investment applications on its online store, Google Play, which they used to defraud unsuspecting victims.

Despite the company’s previous attempts to take down fraudulent apps from its Play Store, the alleged scammers found a way to upload more of such bogus apps, with Google stating that their fraud scheme affected around 100,000 users.

Victims Promised ‘Illusory’ Gains From Crypto Investment

Google, in its complaint filed in the Southern District of New York, claimed that Yunfeng Sun and Hongnam Cheung, both Chinese online app developers, employed three primary methods to deceive investors into downloading their fake apps from Google Play.

The defendants reportedly used wrong number messages to initiate a conversation with the targeted victim, thereafter forming a friendly or romantic relationship and convincing the victim to download a fraudulent investment app on Google Play.

One such app was a purported crypto exchange called TionRT, which was uploaded to Google Play in July 2022. Sun and Cheung, along with others involved in the fraud scheme, promoted the app as legitimate.

However, victims were later aware of the fraudulent cryptocurrency exchange when they were unable to make more withdrawals. The platform eventually closed down, and investors did not get their money.

The alleged scammers also used online videos and affiliate marketing programs to convince investors that the crypto and investment apps on Google Play were genuine. They also allegedly made promises of high returns to the victims, with Google describing such financial gains as “illusionary.”

As a way to string investors along, the defendants, as stated in Google’s complaint, would allow withdrawals in small amounts. However, further attempts to withdraw more funds were impossible.

Sometimes, Sun and Cheung or their agents would require a fee between 10% and 30% or ask that investors maintain a minimum balance if they wanted to withdraw their funds. Despite victims’ compliance with the demands, they were still unable to make withdrawals.

“Defendants and their agents designed the fraudulent apps that were made available on Google Play to appear legitimate. Their user interfaces sought to convince victims that they were maintaining balances on the app and that they were earning “returns” on their investments. But those statements were false. The apps were not actual trading platforms; they existed only to ingest users’ money, with which the fraudsters then abscond.”

100,000 Google Users Affected

Sun, Cheung, and other unnamed associates have been carrying out their fraud scheme since 2019, with about 87 apps uploaded on Google Play.

While the tech company said that it removed some of these fraudulent apps, the defendants were able to upload new ones “using new aliases and infrastructure, making repeated material misrepresentations regarding their identity and activities to Google as part of attempts to deceive Google into allowing their new apps into Google Play.”

According to Google, approximately 100,000 users download fake apps, 8,700 of whom are said to be based in the United States. The lawsuit noted that financial losses for Google users ranged “from one hundred to tens of thousands of thousands of dollars” per victim, based on complaints.

Apart from its users, the tech company said it was also affected by the fraud scheme, stating that the defendants’ fraudulent actions affected users’ confidence in its services and platforms.

The firm added that stating that it suffered financial damage of more than $75,000 used to investigate the breach of its platform and remedy the damage caused by the defendants.

Google, in its filing, claims that Sun, Cheung, and associates committed wire fraud, breached various contracts, and violated the Racketeer Influenced and Corrupt Organizations (RICO) Act.

As a result, the firm is seeking a permanent injunction on Sun, Cheung, and their associates, to prevent them from accessing Google services, creating or maintaining any Google accounts, or using the company’s products to promote any website, app, or product.