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It is no secret that boiler room operators behind the many scams pay their agents and affiliates through accounts at gambling and betting companies like Mozzart. They need to launder the money stolen from their victims in the first place. FinTelegram has received well-prepared information from whistleblowers detailing how the FCA-regulated MIR Group d/b/a MuchBetter is systematically used by forex scammers, illegally operating brokers, and boiler room operators to launder money and pay their employees and affiliates. Here is part 1 of our MuchBetter report.
|Legal entities||MIR Limited UK Ltd, UAB MIR Lithuania (together “MIR Group“)|
|Related individuals||Israel Rosenthal, Christian Mark Sperring,|
|Partner||PayrNet UAB d/b/a railsbank, Valyuz UAB, Railsbank Technology Ltd|
|Regulators||FCA, Bank of Lithuania, Romanian National Office for Gambling|
MIR Group holds various licenses in different jurisdictions:
- The UK FCA regulates MIR Limited UK Ltd with reference number 900704.
- The company also holds a gambling license with number Nr:2427/26.11.2020 issued by the Romanian National Office for Gambling (NOG).
- UAB MIR Lithuania is a regulated agent of PayrNet UAB, authorized by the Bank of Lithuania with registration code number 305264430.
The problem: dirty money!
The money of boiler room operators and scammers is dirty because it has been stolen or earned illegally. According to findings of Forex Peace Army (FPA) investigators, the CySEC-regulated ForTrade deploys such a gambling payment scheme to pay its boiler room agents.
Both scammers and regulated investment firms use boiler rooms in different jurisdictions. Primarily, the boiler room agents and affiliates receive commissions from deposited funds of the clients (victims). The deposited funds from forex, CFD, or crypto scams, or offshore brokers are not used for trading and are held in escrow in segregated accounts as required by law. Instead, the client deposits are used to pay their employees and affiliates and fund the luxury life of the owners. This approach is illegal; it’s fraud. Therefore, the money flow must be hidden as best as possible to remain invisible to banks, regulators, and law enforcement.
The MuchBetter solution!
For some time now, boiler room operators have been using FCA-regulated MIR Limited UK Ltd d/b/a MuchBetter (www.muchbetter.com) to make payments to their agents and affiliates via their e-wallets. MuchBetter is a high-risk payment processor specializing in the gaming industry.
The MuchBetter website describes the e-wallet as a means to easily deposit or withdraw money to or from gaming operators. The money is parked on e-wallets and not on customers’ bank accounts. One can use the funds on the e-wallets using a MuchBetter MasterCard debit card issued by the MIR Group partner PayrNet d/b/a railsbank. MuchBetter. The e-wallet owners can manage their funds via a smartphone app downloaded from Google Play or Apple Store. Payments are then also possible via Google Pay.
Once the funds are in the MuchBetter e-wallets, they can be quickly sent to other e-wallet owners or spent using a debit card, similar to PayPal. Funds are transferred in a Peer-2-Peer (P2P) approach between the e-wallet owners without moving money on bank accounts. In effect, the MuchBetter P2P ecosystem is a sort of shadow banking system.
So much for the concept of MIR Limited, aka MuchBetter. Sounds innovative, doesn’t it?
Innovation beyond …
Boiler room operators and scams use the MuchBetter e-wallet shadow banking system to launder money stolen from their clients. They register with MuchBetter as merchants and consequently use their merchant account and e-wallets to pay their boiler room agents and affiliates. It is nearly impossible to track once the dirty money is funneled into the MuchBetter e-wallet ecosystem. It is outside the traditional banking system and, therefore, almost impossible for law enforcement analysts to follow. However, it has been confirmed to FinTelegram that law enforcement is well aware of MuchBetter and the likes.
The key question is whether and what MuchBetter knows about its dark merchants and what their compliance department is doing about it. We report on this and about the patterns of the P2P shadow banking ecosphere in Part II.
Stay tuned for part two of our MuchBetter report!
If you have any pertinent information about MuchBetter or other shadow banking ecosystems, please share it with us through our whistleblower system, Whistle42.