The Austrian prosecutors are the first the brought charges against the alleged cybercrime principal Israeli Gal Barak. The process starts on 8 July 2020 in Vienna. The focus will be on the beneficial owner and principal of the cybercrime organization surrounding E&G Bulgaria EOOD. Barak has been charged with investment fraud and money laundering.
Facilitating Payment Processors
The indictment brings many interesting aspects to light and explains how illegal payment processors like the German B2G or the Montenegrin Global Payment Solutions facilitated scams and cybercrime. The prosecutors explain in great detail and with plenty of evidence the flow of money from the defrauded small investors to the scheme’s ultimate beneficial owners and cybercrime principals Gal Barak and his wife and partner Marina Barak (previously known as Marina Andreeva). For example, the money flowed via the illegal German payment processor B2G. As reported, this company belongs to the German Rainer Treuer and the Russian Oleg Shvartsman. B2G is not only included in the charges against Gal Barak but is also the subject of investigations by the German public prosecutor’s office.
The Flow of Money
From the B2G accounts, the funds were transferred to offshore companies such as New Markets SA in Samoa. This offshore company had its bank accounts with the Bulgarian Investbank. Marina Barak, Gal’s Bulgarian wife, is the authorized signatory and holds the Power of Attorney (PoA) for most of these offshore entities.
From New Markets SA the funds were then redistributed to other companies of Gal and Marina Barak in Hong Kong, British Virgin Islands, or the Marshall Islands. Some of the stolen money was then used to invest in real estate in Bulgaria. Most of the accounts of these offshore companies were with the Bulgarian Investbank, so they actually remained in the EU. The authorities have frozen some of the funds.
The investigators traced the money flow according to the motto “Follow the Money.” From the money circulation and the individual account movements described above, it can be established beyond any doubt that Gal Barak and his wife were the beneficial owners and were therefore behind the scams and responsible for the fraud on small investors.
We have no doubt that the prosecutors will succeed in convincing the honorable court that the various scams of the E&G scheme, such as XTraderFX, SafeMarkets, OptionStars, Golden Markets or CryptoPoint, have defrauded thousands of retail investors. The currently frozen money as well as the properties acquired with stolen money should be used for restitution payments.