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OneCoin Update – German prosecutors bring charges of money laundering
German prosecutors have not yet brought charges against the crypto-fraud scheme OneCoin and its principals, but are now taking action against the German payment processors involved. This is a somewhat strange approach and legally contestable. The public prosecutor’s office in Bielefeld has brought charges against three people for money laundering for the OneCoin scam. which is not yet legally binding. German payment processors processed more than €360 million for the OneCoin Ponzi scheme.
Latest Updates
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KBH Andelskasse clients convicted in the U.S. for $250 Mio money-laundering scheme
The Swedish Monark Finance AB was one of 183 foreign high-risk customers of collapsed KBH Andelskasse. In 2018, transactions with these customers triggered 1,645 money laundering alarms. The bank processed €4.1 billion in that year, the majority of which were suspicious and came from these customers. While the Danish prosecutors investigate KBH Andelskasse the Canadian Firoz Patel, beneficial owner of Monark Finance, has been sentenced to a 3-years prison term for money-laundering in the United States.
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Urgent Warning against scam-facilitating Lithuanian payment processors
In the last few weeks, we have noticed an increasing number of Lithuanian companies acting as illegal payment processors for scams and handling bank payments for their client-victims. The payments are made on the basis of fake invoices for alleged consulting services issued by these illegal payment processors. Recently we have uncovered Skylas UAB, Fuselma UAB, or Merelita UAB as such scam facilitators and money launderers. We urgently ask investors to be super-cautious before paying an unrelated Lithuanian company for fake services.
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Investor warnings against CMG Markets, Paragon Finance, and Lithuanian payment processors
The UK regulator FCA issued a warning against the broker scam CMG Markets, operated by Mitz Group with Mitz Partnership OÜ, Estonia, and its parent company Mitz Holdings Ltd, St. Vincent and the Grenadines. The scam is related to the Paragon Finance scam. Their payment processors are the Russian Piastrix for credit and debit cards and the Lithuanian Fuselma UAB and Skylas UAB with Trustcom Financial UAB for bank transfers. The scams of course take cryptos too.
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Chinese law enforcement seized $4.2 billion in PlusToken Ponzi scheme
According to The Block, crypto assets worth more than $4.2 billion at today’s prices have been seized in Chinese law enforcement actions in the PlusToken Ponzi scheme. The seized cryptos will be forfeited to the national treasury. The scammers allegedly cheated more than 2 million people out of more than $7.6 billion. So far, 16 people have been convicted and received prison-terms between two to 11 years as well as fines between $100,000 to $1 million.
Payment Processors
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CySEC confirms crypto regulation – What it means for Maxigrid and BitandBuy!
Maxigrid Ltd is a regulated Cyprus Investment Firm (CIF) and has made its crypto platform - as well as its bank accounts with GlobalNetint - available to scammers and acted as a payment processor for them. The Financial Ombudsman Service of the Republic of Cyprus purported that the CySEC would not regulate crypto assets. Apparently, it does. The CySEC has issued a guideline on how CIFs should deal with crypto.
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Law and Tax Enforcement Actions – Start with Payment Processors to chase cybercriminals
FinTelegram is frequently contacted by law enforcement agencies in various jurisdictions with requests for information. It has become known in the international law enforcement scene that FinTelegram has indeed valuable information and contacts. In our respective discussions, we recommend starting enforcement actions against facilitating payment processors. They are the backbone and payment data hubs of the ever-expanding cybercrime universe and its scams.
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Maxigrid Case – GlobalNetint allegedly terminated bank accounts
Maxigrid Ltd of the Israeli FinTech entrepreneur Roy Almagor is a CySEC-regulated investment firm. Despite the regulation, Maxigrid has supported scams like RoyalsFX or LincolnFX as a payment processor according to the information available to us. Payments from client-victims of the scams were made via the Lithuanian GlobalNetint (GNI), among others. Allegedy, GNI terminated the bank accounts of Maxigrid, Roy Almagor, and related entities.
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Investor Warning – Russian Umarkets broker scam facilitated by Epayblock and Exactly
The huge Russian Umarkets broker scam is allegedly operated by Market Solutions Ltd, SVG, and Maxi Services Belize Ltd, Belize. On their website, the companies Prometheus Ltd, SVG, and TS Software Ltd are also stated as operators or owners. The scam works with different payment processors like Exactly (www.exactly.com), the Lithuanian Epayblock, and also accepts crypto deposits from potential victims.
Cybercrime Court Cases
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Binary options supervillain – The Yossi Herzog Story exposed in Australia
Yossi Herzog, charged in the Yukom Case in the U.S. with binary options fraud to the tune of $200 million is one of the alleged supervillains of the binary options era. Apparently, he defrauded tens of thousands of victims out of hundreds of millions with his broker schemes in the U.S., Europe, and Australia. As a result of Australian investigations, the Australian regulator ASIC is now heavily criticized for not having taken action against Herzog and his scams earlier.
Regulatory Updates
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Cybercrime story around Danish Shadow Banking Hub KBH Andelskasse unfolds
EFRI co-founded by FinTelegram, has filed several complaints against the Danish KBH Andelskasse. The small cooperative bank was finally taken under supervision by the Finansiel Stabilitet and is being wound up. Danish prosecutors opened a criminal case on charges of money laundering and facilitating cybercrime. The leading Danish financial newspaper Børsen has published a series of reports about KBH Andelskasse based on FinTelegram and EFRI findings and his own research.
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Gooooood Morning BaFin! Another Cease-and-Desist order against a dissolved company
Almo Markets VIP GmbH accepted funds from private persons on its bank accounts for the sole purpose of transferring these funds to offshore companies operating FX, CFD, and crypto scams. Among these scams facilitated by Almo Markets VIP have been 53capitaltrade, YesOption. YesTrading, TradeGBP, TradeDAX as well as Coinbrokerz. Almo Markets VIP vanished. As did all the scam sites. And with them the money. BaFin missed some time, we guess!
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Sorry, too late! BaFin issued a cease-and-desist order against dissolved laundromat
In recent years, German companies have increasingly been used as payment processors for scams and cybercrime. Dozens of German companies are still acting as illegal payment processors for scammers. The law calls it money laundering. Lipans Smart Consult GmbH was one of those laundromats. BaFin issued a Cease-and-Desist Order but the company has already been dissolved months ago.
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European Funds Recovery Initiative (EFRI) is a non-government organization with the mission to support scam and cybercrime victims.
