Austrian Police Uncover $1.2 Million ‘Rip-Deal 2.0’ Crypto Fraud

Detectives in Vienna, Austria have disrupted a $1.26 million (€1.2 million) crypto fraud operation they’re calling “Rip-Deal 2.0.”

A 39-year-old suspect with a long series of past convictions was arrested in Milan, Italy, earlier this year with help from Europol, according to English-language local news outlet The International. In October, a regional court sentenced the person to three years in prison.

The suspect reportedly engaged in a new variation of the Rip-Deal scam, which traditionally uses counterfeit cash to buy luxury goods like expensive watches or gold. In this instance, victims were giving the scammer cryptocurrency in exchange for the counterfeit cash. Viennese police are calling this variation the “Rip-Deal 2.0.”

The suspect was also found to be in possession of €200,000 in fake cash. Chief Inspector Gerald Goldnagl, head of the Vienna unit, said that “these crimes are often carried out by organized gangs from the Western Balkans.”

These recent developments are the culmination of an operation that started in 2021, when a private investigator helping victims of the scheme contacted the Vienna police department. To pull off the fraud, the alleged scammers posed as businessmen and offered help to one man looking to sell a flat in Italy in exchange for a €75,000 commission. They then paid the seller with counterfeit money and disappeared.

“We were able to solve this case relatively quickly. Photos and voice recordings of the suspect, known as ‘Kennedy,’ were key,” Detective Valentin Szaga-Doktor said.

The investigation gradually expanded with the inclusion of more cases linked to the same suspect. His victims were spread across Austria, Switzerland, and Germany.

One Austrian businessman nearly lost €131,000 after the scammers attempted to convince him to transfer crypto in a fake industrial machinery deal. He called off the deal after his daughter, a police officer, noticed the warning signs and raised the alarm.

Detective Mario Kaintz recognized that the group’s methods for the fraud were “brilliant.” In some cases, “they get victims to input their passwords or ‘seed phrases’ for cryptocurrency wallets, sometimes spying on their phone screens using cameras hidden in the ceiling.”

Dmytro Yasmanovych, Head of Compliance at crypto cybersecurity firm Hacken, told Decrypt that such strategies can be countered “by employing anti-surveillance tools, such as camera detection devices and signal-blocking technologies during sensitive meetings.” He particularly suggests employing “actual signals and reflecting light detection devices rather than” mobile device applications.

Signal blockers, as described by Yasmanovych, are radio frequency jammers. There are ones that specifically help detect surveillance cameras, usually targeting the range from 900MHz to 2499MHz, with some extending to the 5GHz range. But keep in mind that radio jammers are illegal in many jurisdictions, so it’s prudent to consult local laws before buying and using one.

It’s also worth mentioning that radio jammers will do little good if a camera keeps a local copy of a video (in most cases on a microSD card) that will be retrieved later. In those cases, the recommended light detection devices that Yasmanovych mentioned are more useful. They use laser-based detectors to find reflective lenses, much like optical scanners looking for lenses, and infrared-detectors to find night vision cameras that emit infrared light.

The Viennese police’s Rip-Deal fraud unit of Viennese police resolved 102 cases with €25 million ($26.2 million) worth of damages since 2020. Still, the police believe many cases go unreported because victims fear being implicated, especially when counterfeit money is involved.

Yasmanovych said that “cybersecurity firms and law enforcement can build trust by creating anonymous reporting mechanisms and offering clear assurances that victims will be treated with sensitivity and confidentiality.”

Edited by Stacy Elliott.