What every founder needs to know about investment scams and fake employee schemes

What are online investment and job recruitment scams?

Investment scams targeting businesses involve fraudsters posing as venture capitalists, angel investors, accelerators, or financial advisors to extract money through fake funding opportunities.

Criminal organizations systematically target:

• Startups actively fundraising or mentioned in press coverage about capital needs
  
• Companies that regularly process international payments and multi-currency transactions
  
• Businesses using multiple payment platforms and banking relationships
  
• Teams focused on rapid growth who may overlook security protocols in favor of speed
  

Job recruitment scams victimize job seekers through fake employment offers while simultaneously infiltrating businesses through fake employee schemes that steal intellectual property, conduct corporate espionage, or create backdoors for future ransomware attacks.

This results in direct financial loss, operational disruption, reputational damage with investors and customers, and potential regulatory consequences. In worst-case scenarios, businesses unknowingly become participants in money laundering networks or suffer data breaches that destroy years of carefully built trust.

How investment and recruitment scams target businesses

1. VC and investor impersonation and fake investment platforms

Fraudsters research active fundraising through TechCrunch, LinkedIn, and company announcements. They create polished fake identities by cloning legitimate fund websites with slight URL variations (andreessen-horowitz.co instead of a16z.com), fabricating team profiles using stock photos or AI-generated images, and citing non-existent portfolio investments borrowed from real funds.

How it works:

1. Initial contact occurs via LinkedIn InMail, often targeting founders who've publicly discussed fundraising.
   
2. Scammers reference specific details from pitch decks or press coverage to establish credibility, then migrate conversations to WhatsApp or personal email, claiming they want to "move quickly" or "keep discussions confidential."
   
3. The fake due diligence process requests pitch decks, cap tables, financial projections, customer lists, and bank statements under the guise of "preliminary diligence."
   
4. Fraudsters send professional-looking NDAs and term sheets, create artificial urgency with "tight deadlines" or "competitive situations," then request "due diligence fees" (USD 5,000-50,000), "appraisal fees," "legal processing fees," or "proof of funds deposits" to "demonstrate seriousness."
   

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2. Task-based job scams

Victims receive unsolicited SMS messages or LinkedIn approaches offering "flexible remote work" or "earn money rating products." Recruitment moves to WhatsApp or Telegram groups where "mentors" showcase fabricated success stories and commission earnings.

How it works:

1. The scam involves downloading apps or accessing websites where victims complete simple tasks: rating products, liking videos, clicking links, or posting reviews.
   
2. The interface displays fake commission earnings accumulating in an account. To "unlock" earnings for withdrawal, victims must first make deposits that grow progressively larger with each task level.
   

These schemes specifically target individuals interested in remote work opportunities. Distributed teams and startups with flexible work arrangements create cover for these scams, as the business model appears legitimate within the remote work economy.

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3. Fake employee infiltration and corporate espionage

Sophisticated actors, including state-sponsored operatives, use stolen US identities enhanced with AI-manipulated photos to apply for remote positions.

How it works:

1. Fake employees pass video interviews, background checks, and reference verification, then receive company equipment and system access.
   
2. Once inside, they steal intellectual property, install malware, conduct espionage, or create backdoors for future ransomware attacks.
   

The Department of Justice revealed in December 2024 that 14 North Korean nationals generated USD 88 million over six years by fraudulently obtaining IT employment at more than 300 US companies, including Fortune 500 firms. The scheme operated through "laptop farms" where domestic facilitators received company equipment and provided remote access to overseas workers using VPNs to appear US-based.

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4. Business email compromise and money laundering schemes

Criminals compromise or spoof business email accounts, then send "urgent" requests related to recruitment or investment activities. They also recruit legitimate-looking businesses as unwitting partners in laundering schemes.

Common scams include:

1. Fake executive requests to process "confidential" wire transfers for acquisition due diligence
   
2. They create fake invoicing for services never rendered, exploit international trade financing and B2B payment systems, and use complex layering schemes across multiple business accounts.
   
3. Impersonation of recruiters requesting payment for placement fees or background checks
   
4. Fake investor communications requesting funds transfer to "secure" the investment
   
5. Compromised vendor accounts requesting payment redirection for "new banking details"
   
6. Businesses receive funds that must be quickly forwarded to third parties, often keeping a commission. These funds typically originate from other fraud victims.
   

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Platform-specific risks you should know about

Each platform creates unique vulnerabilities that criminals systematically exploit.

1. LinkedIn

LinkedIn provides verified professional context that builds trust. According to CNBC, LinkedIn removed 80.6 million fake accounts in the second half of 2024, up from 70.1 million in the prior period, indicating the scale of fraudulent activity.

• Weak verification gap: Anyone can create a polished profile claiming to work at a legitimate firm, and there's no way to verify employment claims without contacting the company directly.
  
• Staged connections: Mutual connections can be faked through strategic connection requests, and the platform's messaging system makes it easy to reach founders who've publicly discussed fundraising.
  

2. WhatsApp and Telegram

WhatsApp and Telegram’s end-to-end encryption makes monitoring difficult for platforms and law enforcement. Their group functionality also enables mass targeting, and minimal identity verification allows hackers to create accounts easily with spoofed information.

• No platform oversight: Once conversations move from LinkedIn to WhatsApp, there's no platform oversight or report function that matters.
  
• Loose verification: There’s no way to verify the person's identity beyond what they choose to show you.
  

3. Job boards and recruitment platforms

Job boards struggle to verify the legitimacy of every posting, particularly for small companies or new accounts. Automated fraud detection often misses sophisticated fakes with professional language and realistic job descriptions.

• Risky application process: Uploading your resume means sharing personal information with unverified parties
  
• Unrestricted messaging: Platforms often allow direct messaging that bypasses their own security measures.
  

4. Email

Business Email Compromise (BEC) is a multi-billion dollar threat.

• Spoofed emails: It’s easy to make it appear like the messages come from legitimate company domains even when they don't.
  
• Compromised accounts: When a real vendor's email gets hacked, their messages look completely authentic because they are coming from the actual account.
  
• Lack of internal controls: There's no built-in verification for payment instructions, and most email systems don't flag sudden changes in communication patterns like unusual payment requests or banking detail changes.
  

Regulations and requirements you should know

Understanding the regulatory landscape helps you implement compliant fraud prevention while protecting your business from liability. These requirements exist across jurisdictions where Aspire operates and where our customers do business.

While these regulations exist to protect the financial system, they also help protect your business from becoming a fraud victim or unwitting participant.

Singapore

If you're operating in Singapore, the Monetary Authority of Singapore (MAS) requires proper Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) controls.

MAS Notice 626 specifically requires enhanced monitoring for businesses that handle multiple currencies or frequent international transfers. The Shared Responsibility Framework, implemented December 2024, mandates real-time fraud surveillance for phishing scams across 17 covered financial institutions.

What you need to do:

• Implement Know Your Customer (KYC) procedures: proper identity verification for vendors, partners, and counterparties
  
• Monitor transactions for suspicious patterns: rapid money movement, unusual destinations, inconsistent transaction purposes
  
• Report suspicious activity to MAS and Singapore Police Force when detected
  
• Keep detailed records of all transactions, verification steps, and due diligence procedures
  
• Train your team to recognize money laundering and fraud warning signs
  

The Personal Data Protection Act (PDPA) governs how you collect, use, disclose, and protect personal data of Singaporean residents.

Data protection requirements:

• Obtain consent before collecting personal data, or rely on legitimate interests exception for fraud prevention
  
• Implement reasonable security arrangements to protect personal data from unauthorized access
  
• Retain personal data only as long as necessary for business or legal purposes
  
• Notify individuals and the Personal Data Protection Commission (PDPC) of data breaches within specific timeframes
  

Hong Kong

If you're expanding into Hong Kong, these requirements apply regardless of company size.

Online investment scams in Hong Kong generated HK$3.08 billion in losses from January-October 2024, up 30% year-over-year.

The Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) maintain alert lists of unlicensed entities, suspicious investment products, and fraudulent websites.

What you need to do:

• Enhanced due diligence on new vendors and payment relationships
  
• Participation in fraud intelligence sharing when suspicious activity is detected
  
• Stronger verification processes for payment instruction changes
  
• Regular assessment of counterparty risks, particularly for cross-border transactions
  

Personal Data (Privacy) Ordinance (PDPO) requirements:

• Six Data Protection Principles governing collection, accuracy, retention, use, security, and access
  
• Data users must not collect personal data unless necessary for lawful purpose
  
• Appropriate security measures to protect personal data
  
• Data breach notification to Privacy Commissioner for Personal Data and affected individuals
  

Europe

If you have EU customers, employees, or process data of EU residents, General Data Protection Regulation (GDPR) applies even if your business is not based in the EU.

Key data protection requirements:

• Lawful basis required for all data processing: consent, contract, legal obligation, or legitimate interests
  
• Data minimization: collect only what's necessary for the stated purpose
  
• Right to erasure: individuals can request deletion of their data (with exceptions for legal obligations)
  
• Data breach notification within 72 hours of becoming aware
  
• Data Protection Impact Assessments (DPIAs) for high-risk processing
  

United States

If you're processing payments in the US market, you need to understand:

FinCEN (Financial Crimes Enforcement Network) requirements:

• Suspicious Activity Reports (SARs) required for transactions of USD 5,000 or more at financial institutions
  
• Initial reports due within 30 days of detection
  
• New rules effective January 2028 extend AML/CFT program requirements to approximately 15,000 registered investment advisers managing USD 119+ trillion
  

FBI Internet Crime Complaint Center (IC3):

• Report all internet-enabled fraud through ic3.gov
  
• IC3 data contributes to federal investigations and fraud pattern identification
  
• The FBI's Financial Fraud Kill Chain achieves 66% success rate in stop-payment actions when victims report promptly
  

FTC (Federal Trade Commission) guidelines:

• Consumer and business scam reporting through ReportFraud.ftc.gov
  
• FTC tracks fraud trends and issues advisories on emerging threats
  
• Loss reports help identify evolving scam typologies and high-risk platforms
  

NASAA (North American Securities Administrators Association):

• Investment fraud guidelines for verifying broker-dealer and investment advisor registrations
  
• 8,800+ active investigations in 2024, with 32% involving social media-originated scams
  
• State securities regulators provide verification services for investment professionals
  

SEC (Securities and Exchange Commission):

• Investor alerts on cryptocurrency scams, group chat investment schemes, and AI-enabled fraud
  
• BrokerCheck and EDGAR databases for verifying investment professional credentials
  
• Report suspicious investment activity through sec.gov/tcr
  

The US has no federal comprehensive privacy law, but multiple states have enacted regulations:

California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA):

• Applies to businesses serving California residents with revenue over $25M, or handling data of 100,000+ CA consumers
  
• Right to know what personal information is collected and how it's used
  
• Right to deletion of personal information (with exceptions)
  
• Right to opt-out of "sale" of personal information
  
• Data breach notification laws vary by state, with most requiring notification within specific timeframes
  

Other state laws include:

• Virginia Consumer Data Protection Act (VCDPA)
  
• Colorado Privacy Act (CPA)
  
• Connecticut Data Privacy Act (CTDPA)
  
• Utah Consumer Privacy Act (UCPA)
  

How Aspire protects you from investment and recruitment fraud

At Aspire, protecting our clients from financial crime is central to our mission of supporting globally minded founders. We've built multi-layered defenses to help you identify, prevent, and respond to investment scams, fake investors, recruitment fraud, and social engineering attacks. Our platform monitors transactions in real-time, verifies identities and counterparties, and flags suspicious activity before damage occurs.

When potential fraud is detected, we act immediately by holding transactions, reaching out for verification, and coordinating with regulators when required. Beyond technology, we provide ongoing fraud awareness education to help your team recognize and report threats. Our active protection is designed specifically for startups, distributed teams, and fast-growing companies operating globally.

Report suspicious activity immediately

If you suspect you've encountered investment fraud, recruitment scams, or suspicious payment requests:

Contact Aspire immediately:

• Through your account dashboard
  
• Via our support channels
  
• Your dedicated account manager
  

Report to authorities:

• Singapore: ScamShield Helpline 1799 or report at scamshield.gov.sg
  
• Hong Kong: Police Anti-Deception Coordination Centre 2860 5012
  
• United States: FBI IC3 at ic3.gov and FTC at ReportFraud.ftc.gov
  
• International: Contact your local law enforcement and financial regulator