New York Attorney General Letitia James issued an investor alert on April 6 warning New Yorkers about fraudulent investment schemes that are spreading across Meta platforms, including Facebook, Instagram, and WhatsApp. The announcement highlights the increasing use of deceptive advertisements and deepfake technology by scammers to lure investors into high-risk scams designed to steal their savings.
James said these scams include pump and dump schemes, trust scams, and fraudulent cryptocurrency plans. She urged residents to carefully review any investment ads seen on social media before making decisions. “Scammers are using social media to exploit the names of trusted financial leaders and celebrities with the goal of stealing hard-earned savings from New Yorkers,” James said. “From fake investment platforms to celebrity endorsements generated through deepfakes and fraudulent cryptocurrencies, these schemes are becoming increasingly sophisticated. I urge everyone to remain vigilant, be wary of any investment ad on social media, and remember: if an investment seems too good to be true, it probably is a scam. Any suspicious ad or offer should be reported to my office.”
The alert explains how pump and dump scams operate in three steps: baiting victims with unauthorized images of public figures in misleading ads; moving conversations off-platform onto encrypted apps like WhatsApp or Telegram; then encouraging victims in group chats with false expert advice until they invest large sums in low-value assets that quickly lose value when scammers sell at inflated prices.
Trust scams follow a similar multi-step process where fraudsters build relationships with victims using fake professional profiles or cloned websites before convincing them to invest more money over time. Victims may even withdraw initial small profits as proof before losing larger investments when withdrawal becomes impossible due to new fees or vanished contacts.
The Attorney General’s office provided guidance for recognizing red flags such as promises of guaranteed returns, high-pressure tactics, celebrity endorsements created by artificial intelligence (AI), requests for cryptocurrency payments or shifting conversations onto encrypted apps. Tips also include verifying credentials independently through BrokerCheck by FINRA and consulting trusted advisors before investing.
James reminded the public that most fraudulent transactions involving cryptocurrency cannot be reversed once completed. She encouraged anyone who suspects they have been targeted by such schemes to report incidents online or call her office at 1 (800) 771-7755.
Letitia James heads the New York Attorney General’s office according to the official website. The agency operates as a public law enforcement and legal advocacy body for New York according to its official website, promoting social justice through civil rights enforcement and consumer advocacy as described by its official site. It provides services including consumer fraud investigations, charities oversight, tenant dispute mediation according to its official website, ensures public safety while defending civil rights as stated on its website, preserves the environment according to its official site, and addresses local legal issues through regional offices across the state as reported by its official website.
