Israel has become a lucrative playground for high-tech thug entrepreneurs. A valley of silly cons and matchstick men who take advantage of the Law of Return to set up scam shops and businesses in our beloved country.

“I need to build a FOREX website,” said one potential customer. “It has to look real professional and serious.”

As I was trying to find out what he had in mind it became obvious something was fishy. Whatever the case was I told him our company’s policy prevented us from building software targeting the financial sector. Our meeting ended there.

Since then I’ve had to turn down a sporadic flow of companies requesting the exact same type of website but only recently did I find out what the deal was all about.

Lately, a friend of mine who works for a charity had to pass on donations from one such FOREX company and he enlightened me on the matter. It turns out it’s actually a very popular and profitable scam.

First you open a company in Israel, preferably a call center. Then you hire a very qualified (and affordable) workforce of expats that speak the language of the naive. Finally, you need a real website (at this point quotation marks are point-less).

It’s all fake.

The website is where users can manage accounts, enabling them to buy and sell currencies online. All thanks to a sophisticated and dynamic dashboard simulating market activity.

Users aren’t really buying or selling anything at all. They are being lured in via a phone call to invest in world currencies. Much like eTrade does legally with the stock market. The website is very important because today to earn someone’s trust (and life savings) you really need to “look” serious.

Once your account is created you can log in and see how much money you make because you will make money, it’s part of the scam. The website’s AI also simulates successive gains in order to give users the impression they’re generating profits. The injection of euphoria can turn any conservative into a ruthless risk taker.

Then comes the second phone call.

“We noticed you’ve made a small fortune already. Congratulations! We can help you re-invest it wisely…”

Investors who want to cash in on their gains aren’t allowed to, thanks to the small print above the “I agree” checkbox. In most cases once the money is re-invested an artificial “crash” is generated and they end up losing everything. Most will never even know it was a scam.

The police are having a tough time tracking them down because they are committing virtual crimes against foreigners living in foreign countries. Collection of evidence is laborious. Identifying the culprits isn’t an easy task, nevermind arresting them.

The only thing that will stop them is awareness through exposure. Detecting these enterprises while they’re still at their embryo phase is crucial for law enforcement agencies. As a rule of thumb I always beware of companies seeking products from real professionals that look… “real and professional.”

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