A report by the Australian Crime Commission (ACC) and Australian Institute of Criminology said high levels of retirement savings made Australians attractive targets.
Home Affairs Minister Jason Clare said financially literate men aged over 50 were the main victims and the losses were likely much higher as people were often too embarrassed to report such fraud.
“The criminal syndicate cold calls the investor, refers them to a flash website and sends them a brochure promising strong investment returns,” said Clare.
“After taking their money they string them along for months or even years and then the money disappears.
“These criminal syndicates usually operate from outside Australia. They use front companies and false names. Once they’ve stolen the money the website disappears and the trail goes dead.”
ACC chief executive John Lawler said criminals often bought the personal details of potential victims from the customer lists of legitimate companies, and blamed the proliferation of the Internet for exacerbating the problem.
“What’s happened is that this has enabled them, the Internet, with anonymity, to reach out around the globe and create very swanky websites,” he told ABC radio.
“They can commit frauds and perpetrate and present themselves as the regulator or indeed the authorities.
“They can even manipulate search engine data so that when you search for a particular event or a particular entity, you’ll bring up their names first and any negative comment in relation to those companies will be put down to page four or five.
“So people who can do that in a global context are a very significant threat.”
Australian Securities and Investments Commission chairman Greg Medcraft said fraudulent investments were difficult for even savvy investors to identify.
“Perpetrators of this type of fraud are skilled at using high-pressure sales tactics, over the phone and using e-mail, to persuade their victims to part with their money,” he said.
To combat the threat, letters were being sent to every household in Australia warning about the scams.
It is the first time law enforcement agencies have undertaken a mailing campaign on such a scale regarding serious and organized crime.