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Vienna Cybercrime Trials and the disturbing Balkan Papers
The Israeli scammer and cybercrime principal Gal Barak was sentenced to four years in prison and restitution payments at the beginning of September 2020 at the start of the Vienna Cybercrime Trials (“#VCT”). Further charges against his co-conspirators will follow in various EU jurisdictions. Barak and his partner Uwe Lenhoff have also operated their illegal boiler rooms and payment processors in the Balkans. The Balkan Investigative Reporting Network has recently published the Balkan Papers related to the #VCT.
Latest Updates
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EU Commission takes action against Cyprus and Malta’s Golden Passports Schemes
EU passports are highly prized as they give their owners the right to travel, live, and work freely in all 27 members of the union. Unfortunately, some countries such as Cyprus and Malta sell citizenships and thus EU passports as part of investment programs for the sole benefit of these countries. Most recently, Al Jazeera has revealed that Cyprus is also offering its "Golden Passports" scheme to convicted criminals and money launderers. Now the EU is finally intervening.
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German Watchdog issues Cease and Desist against two illegal payment processors
On October 19, 2020, German regulator BaFin issued two Cease and Desist Orders against the two unauthorized payment processors ION & Maga Consulting GmbH and Premium Service ECN GmbH. Both of them have been processing bank transfers from client-victims of the broker scams BlueTrading, CoinBrokerz, and TradeDAX respectively.
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EFRI charges Payvision with scam facilitation claiming restitution payments
The European Funds Recovery Initiative (EFRI) has sent a letter of formal notice to the ING subsidiary Payvision and asked for restitution payments for the victims of scams of the German Uwe Lenhoff, who died in prison while waiting for his indictment. The German prosecutors charged Lenhoff with operating a cybercrime organization, investment fraud, and money laundering. Lenhoff was a close business partner of Payvision and an acquaintance of its founder and then CEO Rudolf Booker.
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CySEC confirms receipt of Maxigrid Request 4 Action
Over the last months, FinTelegram has received plenty lot of evidence that suggests the involvement of Roy Almagor's CySEC-regulated Maxigrid Ltd in broker scams like RoyalsFX or LincolnFX. These scams have harmed thousands of EU small investors. However, the legal responsibility to investigate the allegations lies with the responsible regulator CySEC and law enforcement. We have therefore sent a Request 4 Action to the CySEC Chairwoman and Europol. The receipt was confirmed by CySEC and thus the clock is running.
Payment Processors
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Dear Bank of Lithuania – please explain your situation with International Fintech!
According to reports by Lithuanian journalist Vakaris Deksnys, the Bank of Lithuania has terminated the license of the International FinTech UAB of Israelis Eyal Nachum and Tamir Zoltovsky without providing a reason. It already happened in July 2020. No statement was given by the regulator on this matter as it would be necessary and required. That's a strange approach. How can a regulated company simply disappear form an EU regulator's list without further explanation?
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Binary options fraud – Notorious Cartu Brothers charged by U.S. CFTC
It is a court season for the fraudulent binary options industry and its perpatrators. Among the worst scammers were David Cartu and his brothers. After the Canadian regulator OSC had already sued them for binary options fraud, the U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement action. The regulator charges six individuals and four companies with operating a fraudulent binary options trading scheme that received over $165 million via their Irish GreyMountain Management Ltd.
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Broker scam Trade99, ClearTransfer, and another vanished crypto platform
Since we started our reports about the RoyalsFX Scam and described the background and processes, victims of other scams like LincolnFX or Trade99 have come forward. They have identified similar processes and/or have been involved in several of these scams and have discovered parallels. The involvement of the CySEC-regulated Maxigrid Ltd as a payment processor and its crypto platform BitandBuy was one of these parallels. As is the disappearance of another crypto platform.
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BaFin issues cease and desist order against payment processor Global Data Conduct
The German regulator has issued a Cease and Desist Order against the illegal payment processor Global Data Conduct GmbH, a company registered in Cologne, Germany. This German company at least acted as facilitator for the broker Scam TradesFX, received bank transfers from client victims and forwarded them to the scammers. The sole managing director of the company is Anatolijs Dedenko, who lives in Düsseldorf.
Cybercrime Court Cases
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FinTech Service – I did not do that! Confessions of an alleged scammer and scam facilitator!
On May 8, 2018, the German regulator BaFin issued cease-and-desist orders against three of Kai Petersen's companies to terminate their scam business. One was the FinTech Service GmbH, registered in Dusseldorf, Germany. An appeal against these orders was rejected by the respective court in Frankfurt. In September 2019 the U.S. SEC has charged Kai Petersen together with his Israeli partners Gil Beserglik and Raz Beserglik with binary options fraud. FinTelegram has reported and Kai Petersen has contacted FinTelegram for clarification.
Regulatory Updates
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German BaFin issues Cease-and-Disease order against TopInvestus – again!
On October 9, 2020, the German regulator BaFin again ordered the discontinuation of the TopInvestus broker scam. Already in May 2020, the regulator issued a cease-and-desist order against the scam which was then operated under the domain www.topinvestus.com by Silverdale Holdings Ltd, British Virgin Islands, and Vindigo Systems OÜ, Estonia.
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Investor Warning – Crypto-based forex scheme Mirror Trading International
The much criticized Bitcoin-based forex trading MLM scheme Mirror Trading International ("MTI") was established in April 2019 in South Africa by MLM veteran Johann Steynberg. In July 2020 the Texas Financial Services Authority (FSSB) issued a cease-and-desist order against MTI and in August 2020 the South African FSCA issued an investor warning. Allegedly the MTI scheme has more than 140,000 members holding some 17,000 BTC in their trading accounts.
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European Funds Recovery Initiative (EFRI) is a non-government organization with the mission to support scam and cybercrime victims.
