Swedish criminals using Spotify to pull off easy money laundering

Money laundering is like a sneaky puzzle that criminals solve to make their ill-gotten gains look totally legit. They go through a bunch of tricky steps to hide the fact that the money is from shady stuff, so it seems like it’s all clean and legal.

To kick things off, crooks sneak their dirty money into the money world. They do stuff like hiding cash, messing with financial papers, or slipping it into businesses that handle loads of cash. Once it’s in there, they move on to the “layering” part, where they get super crafty. They make a big, tangled mess of transactions to make it almost impossible to figure out where the money really came from. This can mean shifting cash between lots of different accounts, buying and selling stuff, or even creating fake companies to throw everyone off the trail.

Last but not least, in the integration stage, the “cleaned” cash becomes a part of the regular money world. Crooks might invest it, buy stuff, or just use it for regular everyday things. Sometimes, they stash it in secret offshore accounts or tax havens to make it even harder to figure out where it really came from.

Also read: Are women more susceptible to cybercrimes than men?

How are criminals using Spotify to their benefit?

Not too long ago, one of Sweden’s big newspapers, Svenska Dagbladet (SvD), dug deep into a story about how criminal gangs have been using Spotify to clean their dirty money for a while. To be more specific, they’ve been shelling out cash for fake music streams from artists connected to these gangs and cashing in on the artificially boosted popularity.

Since fall 2021, the detectives over at the National Operative Unit of the Swedish Police Force have been keeping tabs on rappers who drop their tunes on the big streaming platforms. At first, they were doing this to pick up hints and details about crimes from the lyrics. But as they started to see clear trends in the streaming data, those analysts began to suspect that the bad guys were actually using the service for something entirely different.

After interviewing folks who are part of these networks or have some inside knowledge about fighting against fake streaming bots, the reporters at SvD have figured out that the crooks have been using Spotify to clean their cash since 2019.

According to one of the interviewees from a criminal crew, the initial move involved purchasing Bitcoin through off-the-books transactions facilitated by a Facebook group. After that, these gangs used the cryptocurrency to cover the costs of bogus music streams, like plays generated by bots, hijacked accounts, or other shady methods. Apparently, this arrangement took place on Telegram, leading the sellers to be known as “Telegrambots.”

Also read: Staying one step ahead of credit card frauds; Tips to keep your money safe

How does the scam work?

So, how does this whole plan wash the money clean? Well, when you get more streams, your music climbs up those charts. Higher rankings lead to even more legit streams, and artists with ties to the gangs have even gone as far as creating their own record labels to cash in on this artificially boosted fame. And when you’ve got actual streams, you’re raking in real cash from Spotify. And there you have it: the money is back, all scrubbed of its shady origins.

In exchange, a lot of these rappers get a kind of “street cred” boost from their connection to the gangs. Apparently, one of them even has tens of millions of streams on the platform.

Of course, some cash is bound to disappear in the process, thanks to how Spotify’s payout system works (you know, free accounts versus premium ones, where the listeners are located, and so on). Plus, there’s always the danger of getting caught. Spotify has been cracking down on fake streaming, and they can halt payments to accounts that they can prove are part of this shady business.

Spotify has been important to Swedish startup scene

According to the newspaper’s insiders, this method of money laundering really only makes sense when you’re dealing with amounts above a few million Swedish krona (just to give you an idea, 1 million SEK is roughly equivalent to $90,290).

Earlier this year, Spotify, which is like the shining star of Sweden’s startup scene, announced that it had dished out a whopping $40 billion (that’s about €37.2 billion) to the music industry since it first kicked off.

The company told TNW that just 1% of the streams on their platform are considered fake, and their systems catch weird stuff before it becomes a “big deal.” Additionally, the music streaming giant points out its collaboration with the Music Against Fraud Alliance and the educational materials they offer to artists about the dangers of messing with stream numbers.