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Tech giant Google has filed a lawsuit against two Chinese nationals, accusing them of developing fraudulent cryptocurrency apps on the Google Play store and defrauding more than 100,000 users globally. “This is a unique opportunity for us to use our resources to actually combat bad actors who were running an extensive crypto scheme to defraud some of our users,” said Google’s general counsel.
Tech giant Google filed a lawsuit against two Chinese nationals in the Southern District of New York on Thursday, accusing them of using its Google Play store to scam more than 100,000 users globally out of money through fraudulent cryptocurrency investment apps.
The lawsuit alleges that Yunfeng Sun (aka Alphonse Sun) and Hongnam Cheung (aka Zhang Hongnim or Stanford Fischer) have been running this fraudulent scheme since at least 2019. They allegedly made “multiple misrepresentations to Google in order to upload their fraudulent apps to Google Play, including but not limited to misrepresentations about their identity, location, and the type and nature of the application being uploaded.”
Halimah DeLaine Prado, general counsel at Google, told CNBC:
This is a unique opportunity for us to use our resources to actually combat bad actors who were running an extensive crypto scheme to defraud some of our users.
“In 2023 alone we saw over a billion dollars within the U.S. of cryptocurrency fraud and scams and this [lawsuit] allows us to not only use our resources to protect users, but to also serve as sort of a precedent to future bad actors that we don’t tolerate this behavior,” she noted.
The lawsuit alleges Sun, Cheung, and their associates designed the apps to appear legitimate. Users saw balances and supposed returns within the apps but were ultimately unable to withdraw their investments or claimed profits.
Sun and Cheung allegedly lured victims into downloading their apps using various means, such as sending text messages using Google Voice to target victims in the U.S. and Canada, posting promotional videos on Youtube and other social media platforms, and running affiliate marketing campaigns that paid commissions for signing up people. “The texts would purport to be from wrong numbers, but then the texters would strike up conversations with the victims, developing ‘friendships’ and ‘romantic attachments,'” according to court documents.
Google explained in the complaint that when it took the apps offline, the scammers created new ones and uploaded them to Google Play using “varying computer network infrastructure and accounts to obfuscate their identities, and making material misrepresentations to Google in the process.”
The tech giant is seeking damages in excess of $75,000 and a permanent injunction against the defendants and their associates. This ban would prevent them from creating Google accounts and accessing any Google services in the future.
