(April 4): Alphabet Inc’s Google sued two people based in China it says used the company’s platforms to distribute and advertise fraudulent crypto apps.

The search giant claims the alleged scammers engaged in racketeering, violating the so-called Racketeer Influenced and Corrupt Organisations statute, the federal law used to crack down on organised crime. The lawsuit was filed in federal court in New York Thursday morning.

The lawsuit is the latest example of the company’s effort to crack down on fraudsters — in this case on its Google Play and YouTube platforms — by suing them directly. Google last year sued five individuals who allegedly tricked people looking for Google’s artificial intelligence chatbot into downloading malware onto their computers.

Google said in the lawsuit the defendants conspired to engage in a pattern of racketeering by committing hundreds of acts of wire fraud in their wide-ranging criminal scheme.

Victims of the scam poured their money into the apps, which were designed to look like crypto investments, and then found they could not withdraw their balances, according to the lawsuit. Approximately 100,000 users have downloaded the apps from Google Play, the lawsuit claimed.

“Keeping people safe online is core to our business and we will not tolerate the misuse of our platforms to facilitate cryptocurrency scams,” said Halimah DeLaine Prado, Google’s general counsel. “This litigation is a critical step in holding these bad actors accountable and sending a clear message that we will aggressively pursue those who seek to take advantage of our users.”

Google used business records to identify at least 87 apps uploaded to the Google Play store by the scammers since 2019, according to the lawsuit. The company has taken down the apps as they pop up, but said in the filing that they continue to bypass Google’s fraud detection systems.

The scammers “socially engineered and lured victim investors to download their fraudulent apps” through text messaging campaigns, videos promoting the app and online influencers, Google said in its suit.

Losses from crypto investment scams in the US increased to US$3.94 billion (RM18.6 billion) in 2023 from US$2.57 billion in 2022, marking a 53% increase, according to a recent report from the Federal Bureau of Investigation.