Aussie billionaire sues Facebook over crypto scams with AG's consent02.02.2022
Australian billionaire Andrew “Twiggy” Forrest is taking Facebook to court over scammy cryptocurrency ads that he alleges used his name to defraud victims.
The Fortescue Metals chairman is accusing Facebook of breaching Australia’s money-laundering laws, claiming that it “knowingly profits from this cycle of illegal ads” that it failed to remove.
An initial court hearing in the Western Australian Magistrates court is scheduled for Mar. 28, with a committal hearing expected later in 2022.
Forrest is bringing forward the charges under Part 10 of the Commonwealth Criminal Code, with the consent of the Attorney-General Michaelia Cash.
According to the filings, one Australian victim lost $952,000 AUD after falling for the scam. The court documents stated that the scam “defrauded victims out of millions of dollars.”
“These scenarios played out in the underlying scam which used Dr Forrest’s name, likeness, and reputation to find victims, who often reported being swindled after believing Dr Forrest was actually endorsing the investment scheme.”
Forrest’s lawyers said that although they do “not know the precise number or identities of the individuals defrauded by reason of this vicious scam, the scope of the harm is vast.”
They added that he has spent “hundreds of thousands of dollars” to distance himself from the scam since March 2019, when it first started being promoted on Facebook.
The complaint claims that Facebook’s access to user data has been a leading “contributor to the proliferation of illegal advertisements, “fake news” and other unwanted internet material”. Forrest added that the company’s failure to remove the fraudulent ads was “criminally reckless.”
A spokeswoman for Facebook’s parent company, Meta Platforms, told The Australian that it is taking a “multifaceted approach to stop these ads” by detecting the ads, blocking the fraudulent advertisers, and in some cases, taking court action.
However, Forrest believes that the social media giant should be doing more to prevent fraud from being spread on its platform. Because the scammers are mostly located overseas, Forrest says that they “can’t be easily tracked down.”
He added that “the best way to protect Australians is to deter Facebook — through a criminal prosecution — from allowing itself to be used as an instrument of crime.”
“Facebook has shown little appetite to self-regulate or take basic steps to protect Australians from the misuse of its platform by crooks and scammers, so I’ve been left with no other option than to take this action,” he said.
If found guilty by the Australian courts, Facebook could face fines and be compelled to change the way its advertising works.
The businessman also lodged a separate lawsuit with the Superior Court of California last September, seeking injunctive relief. The case is still pending, with the date of the civil case yet to be set.
Scam has been ongoing
In 2019, Forrest was among several Australian celebrities who were falsely quoted giving testimony for a fraudulent cryptocurrency, including Kate Winslet. One scam quoted the celebs in fake mainstream news articles advertising a fake Bitcoin investment platform.
In 2020 the Australian Securities and Investments Commission issued a warning on fake celebrity-endorsed crypto ads, including Aussies like High Jackman, Nicole Kidman and Waleed Aly.
Other celebrities including Elon Musk, Bill Gates and Richard Branson have also had their image stolen to front crypto scams.
Forrest sent an open letter to Meta Platforms CEO Mark Zuckerberg in Nov 2019 requesting the platform to remove the fraudulent ads and prevent his image being used in the future.
As reported by Cointelegraph in Aug 2021, investment scams cost Australian investors more than $50.5 million in the first six months of 2021, with crypto scams contributing to more than 50% of the losses.