Chapter 45: Illusory Profits: How Platforms Coerce Further Deposits

The screen flickered in blue and green. For Eitan, these colors were not merely pixels on his smartphone display; they were a promise. They represented the financial freedom he dreamed of, the apartment he wanted to help his daughter purchase, and the peace of mind he had never enjoyed as a self-employed individual in Israel. Every time he opened the 'GlobalTrade-Pro' platform application, the bottom-line figures were higher. Within two weeks, the $10,000 he had deposited turned into $14,500. A 45% return. He knew that in a bank, it would take him a decade to reach such a figure.

This is the critical moment where social engineering meets the greed of the heart, resulting in a lethal honey pot. In this chapter, we will analyze the psychological and technological mechanism common in the arsenal of investment scammers: the illusory profit. We will examine how platforms posing as professional entities manage to convince investors to transfer their savings, and what the potential legal implications of these misrepresentations are.

The following scenario is an educational example based on common fraud patterns. The characters and events are intended for illustration purposes only.

The Green Illusion: Eitan's Story and the Slippery Slope

Eitan, 56, a construction foreman at an infrastructure company, was not a reckless man. He knew that one must work hard for money. But the advertisement he encountered on Facebook, promising a 'smart algorithm for trading oil and gold,' arrived just as he was feeling burned out. He submitted his details and, within an hour, received a call from 'Mark.' Mark spoke fluent Hebrew with a hint of an elegant European accent, sounded educated, patient, and most importantly—he did not apply pressure.

'Eitan, I don't want you to deposit much,' Mark said in their second conversation. 'Let's start with $250. See the system, learn how it works. If you see it's not for you, you can withdraw the money with the click of a button.'

Eitan deposited the funds. The next day, the system showed a profit of $40. The day after, another $30. He tried to withdraw $50 'just to test it,' and the money appeared in his bank account within two days. That was the opening shot. Trust was established. As far as Eitan was concerned, Mark was his mentor, and the platform was a legitimate work tool. He did not know that at those very moments, behind the scenes, there was no trading in oil, no gold, and no stock exchange. There was only code inside a well-designed website, allowing the site operators to input any number they wished into the 'balance' field.

Three weeks later, the phone vibrated. 'Eitan, there is a once-in-a-lifetime opportunity,' Mark's voice was excited. 'There is an IPO for a green energy company in Germany. Our VIP clients are getting in now. The problem is that the minimum entry is $50,000. You have a balance of $15,000; if you top it up, the system may show a doubling of the amount within a short time.'

Eitan hesitated. This was all his severance money. He logged into the application. The charts were spectacular. Green columns climbed upward, and under the heading 'Expected Profit,' significant amounts appeared. He felt he was 'on a roll.' He transferred the money. Within three days, his balance showed $120,000. He was already planning the trip to South America he had always postponed.

The crisis began when Eitan requested to withdraw $20,000 to cover his bank overdraft. Suddenly, Mark was unavailable. A day later, 'Sofia' from the Compliance department returned his call. 'Eitan, in order to release the money, you must pay capital gains tax to the authorities abroad. It comes to $15,000. It cannot be deducted from the balance due to international tax regulations.'

Here, Eitan made a common mistake. He borrowed money and paid the 'tax.' Then came a demand for a 'conversion fee,' then 'insurance for international transfers.' Each time he deposited, the number on the screen rose, but the money in the bank account never arrived. At the end of the process, Eitan lost $85,000. The screen still showed he had a 'balance' of half a million dollars, but these numbers were worthless.

The Illusory Profit Mechanism: The Psychology of Fraud

Advanced social engineering and cognitive biases are the foundation of trust in the numbers on the screen. Many platforms use 'dashboards' that look identical to familiar financial systems. They include charts pulled from legitimate sources, economic news, and an available support chat.

The strategy is often based on immediate reward. Viewing a profit on the screen may trigger a sense of security for the investor. Scammers may allow 'wins' in the early stages to encourage the deposit of larger amounts later.

Another critical point is the trial withdrawal. As seen in many educational scenarios, a small withdrawal is sometimes permitted initially. This move may break the 'trust barrier.' The investor may become convinced that the system is real, without realizing that the small amount returned is part of a tactic designed to lead to much more significant deposits.

The Transition from Profit to Payment Demand

An advanced stage of such fraud begins with an attempt to withdraw a significant amount. At this stage, the illusory profit becomes a tool of pressure. A representation is presented to the investor that they must pay fees or taxes to 'release' a high balance visible in the account.

The investor may feel that if they do not pay the additional amount, their entire previous investment will be lost. This is a state where individuals act out of a desire to 'save' what is perceived as an existing asset. This cycle often ends only when the investor has no possibility of depositing more, or when questions arise that lead to the account being closed and the website disappearing.

Legal Aspects: Examining Courses of Action

During years of professional work and in the review of similar cases, the first question that often arises is: 'How could the site show a balance if there is no money?' Legally, a ledger on an unregulated platform's website does not constitute evidence of the existence of assets and may be considered a misrepresentation.

The central legal difficulty is sometimes identifying the defendant, as these companies tend to operate under fictitious names and in remote countries. However, legal action allows for the examination of various paths, focusing on the intermediary parties.

Responsibility of Financial Institutions

When funds are transferred from a bank account in Israel to platforms that turn out to be fraudulent, the question of the financial institution's liability arises. According to the Banking Law (Service to Customers), 5741-1981, and Bank of Israel guidelines regarding anti-money laundering, banking institutions have a duty of care toward their customers.

In certain circumstances, unusual transfers to destinations defined as high-risk may necessitate a review by the bank. One can examine whether the financial institution acted in accordance with required standards of care, whether it identified red flags, and whether it asked the customer clarifying questions. Such liability is always examined according to the specific circumstances of each case.

Payment Services Law, 5741-2019

This law regulates liability in cases of misuse of payment instruments. In cases of fraud where the customer was misled regarding the nature of the transaction, it is possible to examine the option of invoking mechanisms of 'failure of consideration.' In cases of credit card payments, there is importance in acting quickly with the credit card issuer, although in most cases, scammers prefer bank transfers or digital currencies that make reversing the transaction difficult.

Warning Signs: Identifying Misrepresentations in Investments

Investment frauds are often based on promises that are inconsistent with economic reality. It is worth paying attention to the following signs:

• Promises of extraordinary returns: A promise of a very high return in a short period and on a consistent basis should raise immediate suspicion.
• Demand for additional deposits for withdrawal: A regulated financial entity will deduct fees or taxes from the existing balance and will not demand 'fresh money' as a condition for releasing funds.
• Lack of regulatory licensing: It is recommended to check the Securities Authority website to see if the entity offering investments has a proper license to operate in Israel or a recognized license from equivalent authorities abroad.
• Request for remote control: A request to install software such as AnyDesk or TeamViewer for the purpose of 'assistance with trading' is a significant red flag for an invasion of privacy and a threat to bank accounts.
• Beneficiary accounts that do not match: Transferring funds to the accounts of private individuals or companies whose names are not related to the platform is a suspicious sign.

Initial Steps in Case of Suspected Fraud

1. Ceasing communication and deposits: It is recommended to stop all contact with the suspected entity and not to transfer additional amounts, regardless of the explanations or threats made.
2. Full documentation: Saving screenshots of balances, correspondence, call recordings, and transfer confirmations. This material is essential for future legal review.
3. Reporting to the financial institution: An urgent request to the bank to report the incident. In some cases, it may be possible to attempt actions to recover the funds if the report is made shortly after the transfer.
4. Filing a complaint: Contacting law enforcement authorities to obtain confirmation of filing a complaint, a document that may be required by various institutions.
5. Caution regarding follow-up scams: Victims of fraud may receive inquiries from entities posing as law firms or 'fund recovery companies' requesting payment in advance. Great caution must be exercised regarding such inquiries.

Chapter Summary

The illusory profit is a powerful psychological tool that exploits the hope for quick profit. Understanding the mechanism behind digital displays is the first step in self-protection. It is important to remember that what appears on the screen does not necessarily testify to the existence of an actual financial asset.

Although the legal battle to recover funds from fraud cases is complex, it is possible to examine options under certain circumstances, with an emphasis on the conduct of the intermediary financial institutions. Early caution and verification of licensing are the most significant tools for preventing the loss of funds.