With Friends Like These: AI, Affinity Fraud, and a New Kind of Threat

Welcome to the June 2025 edition of our newsletter!  In this issue, we’ll examine how traditional affinity fraud scams are being enhanced by artificial intelligence.

Broken Trust: The Evolution of Affinity Fraud Scams

Affinity fraud – where a fraudster targets members of a group because of a shared religious, educational, civic, or professional background – has been around as long as people have been, with Bernie Madoff being one key example.  Throw new technologies into the mix, and the traditional risks escalate considerably.  The opaque promise of riches via cryptocurrencies, for example, is a potentially fruitful avenue for anyone looking to bring their associates into the fold.  Such scammers often approach military service members or other groups of which they have been a part, simultaneously swaddling themselves in honor and tradition while using that as  a cloak to blind the victim to the scammer’s true intent.

Artificial intelligence can also be used to help a fraudster make claims of affinity seem more real, creating fake degrees or other records to “prove” someone is a member of a group, even when they’re not; and to more realistically insert them into photos, or create authentic-seeming video clips, to further gain a victim’s trust.

What can you do if a client, friend, or relative is approached by someone claiming to be from their college or another affiliation, and wanting to invest together?  First, ideally the potential victim needs to be aware enough to seek advice before committing any funds, then traditional due diligence can pierce even the most sophisticated fraud scheme.  We’ve encountered examples of parties claiming to have degrees which a university could not verify, and going so far as to send photographs of their phony degree as evidence, even when told the school had no record of them even attending.

Artificial intelligence adds a new wrinkle to such schemes, lowering barriers to entry for fraudsters and augmenting the types of fraud they can attempt.  But vigilance and diligence have also been around for most of human history, and in the right hands, they are powerful tools.