Cybercrime Legacy Report: The Veltyco Group Cybercrime Network!

The Veltyco Cold Case
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The arrest of Uwe Lenhoff almost precisely five years ago marked a pivotal moment in the European legal battle against cybercrime, initiating a series of subsequent arrests and legal proceedings against individuals involved in cybercriminal activities. Lenhoff, along with Dutch investor Dirk-Jan Bakker, was identified as the beneficial owner of Veltyco Group PLC. This entity served as a publicly traded facade for a vast cybercrime organization established by Lenhoff and his accomplices.

Cybercrime Activities in Broad Daylight

Vetlyco Network with Montenegro and Bulgaria

The Veltyco cybercrime organization was implicated in the operation of fraudulent schemes, notably including the broker scam Option888 and the lottery scam LottoPalace. The scams of this organization have defrauded tens of thousands of people of tens of millions of euros. Many people have lost their entire savings to these scams.

Law enforcement investigations into Lenhoff commenced in 2017, uncovering his involvement in a sophisticated network of financial fraud and money laundering.

Lenhoff’s association with Bakker and their collaborative effort to list Veltyco Group on the AIM segment of the London Stock Exchange through a reverse takeover in 2016 revealed a calculated attempt to legitimize the operations. The admission prospectus identified Silkline Marketing Limited, Tunegames Holding Ltd, and Altair Entertainment, among others, as subsidiaries or affiliates of Veltyco Group engaged in fraudulent activities, with law enforcement agencies classifying their operations as scams.

Financial regulators around the world have been issuing warnings against the Veltyco Group’s scams since 2017 at the latest. For example, the Italian Consob (here) issued warnings against the Option888 scheme in December 2016, the Austrian FMA (here) in November 2017, the German BaFin (here) in March 2018, and the UK FCA (here) in May 2018. The directors of the public-listed Veltyco Group should have taken action against Lenhoff by this time at the latest. Many other warnings against the other Veltyco-affiliated scams have been issued between 2016 and 2019.

The Dark Network

Veltyco’s business model apparently consisted of acting as a marketing company for affiliated schemes such as Option888 or LottoPalace and collecting commissions from the schemes in return. These commissions were paid with money previously stolen from victims of the schemes. This can certainly be described as a shady business model. Uwe Lenhoff, beneficial owner and director of Veltyco Group, and his partners directly controlled these fraudulent schemes.

The law enforcement authorities have investigated the money flows and have drawn up the following diagram showing who collected money from Lenhoff via his Bulgarian holding company Winslet Enterprises and/or was connected to it.

Veltyco and Uwe Lenhoff laundered money via MoneyNetInt

The illicit proceeds from these operations were laundered through a complex network of offshore companies, including Winslet Enterprises, which Lenhoff managed parallel to Veltyco Group. This network was linked to one of the largest cybercrime organizations in Europe, with ties extending to Gal Barak‘s E&G Bulgaria, another notorious cybercrime entity.

Barak was arrested in Serbia shortly after Lenhoff in early 2019 and sentenced to several years in prison in 2020 for investment fraud and money laundering. Barak’s lieutenants were also sentenced to long prison terms in Austria and Germany.

Payvision facilitating broker scams

Both Lenhoff and Barak’s operations were intricately connected, with Amsterdam emerging as a critical hub for their activities, notably through the involvement of Payvision, a payment processor founded by Rudolf Booker and utilized in laundering illicit proceeds.

Lenhoff’s arrest by Austrian authorities in early 2019 and his subsequent extradition to Germany were significant developments in the legal pursuit of cybercrime syndicates. However, Lenhoff’s unexpected death in July 2020, under mysterious circumstances, has complicated further investigations into Veltyco‘s activities. Lenhoff’s connections with the Serbian underworld and his involvement in money laundering operations through companies in Belgrade underscore the perilous nature of his endeavors.

Victims, Responsibilities, and Failing Authorities

Dirk-Jan Bakker was one of the key management personnel of Veltcyo

In the aftermath of Lenhoff’s death, his partner Dirk-Jan Bakker has portrayed himself as an unwitting participant in Veltyco‘s operations despite being listed as a key management member in the admission prospectus.

Download the Veltyco Admission Prospectus here.

In an extensive interview with Follow The Money in August 2020, by which time Lenhoff was already dead, Dirk-Jan Bakker saw himself as a victim of Lenhoff. Bakker granted Lenhoff a loan of €1 million via his Diman B.V. to buy a villa in Istanbul a few months after he met him. Generous! Lenhoff also had permission to use Bakker’s yacht, which he did. After Lenhoff’s death in July 2020, Bakker filed a complaint about this loan and requested access to the Lenhoff file. The authorities did not investigate Bakker. He was also not listed as a suspect, although Lenhoff incriminated him.

See the loan agreement and the criminal complaint here.

Lenhoff’s death was certainly very convenient for many people, as it meant that there were no more charges and no more trials in which Lenhoff would probably have made unpleasant statements. This can already be seen from his statements in the criminal file. It is astonishing that no one associated with Veltyco has ever been brought to justice by law enforcement.

The legal and regulatory actions against Veltyco rebranded as B90 Holdings PLC, and its associated entities reflect the extensive legal challenges in dismantling cybercrime networks.

This case study exemplifies the intricate legal frameworks required to combat cybercrime and highlights the ongoing efforts by law enforcement agencies worldwide to prosecute and dismantle networks involved in financial fraud and money laundering. The Veltyco Group saga serves as a cautionary tale of the legal, financial, and ethical implications of cybercrime, underscoring the necessity for rigorous regulatory oversight and international cooperation in the fight against these pervasive criminal enterprises.

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