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EU Broker Scam – Investigations in five jurisdictions; More than 200,000 German victims; Connections to Amsterdam and Belgrade!

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The investigations of the various EU Law Enforcement Agencies into what is probably the largest European-Israeli cybercrime organization around the German Uwe Lenhoff and his Israeli partner Gal Barak are taking on ever greater proportions. Since the beginning of the investigations, the case has expanded to such an extent that the EU authorities in the individual countries are focusing on specific sub-segments. The German public prosecutor’s office in Saarbruecken is primarily investigating the cybercrime and scam activities of Uwe Lenhoff in connection with German victims. The Austrian authorities who ultimately launched and coordinated this EU case, are also investigating the international dimension. For this reason, the Israeli Gal Barak is also extradited to Austria. Other authorities of other EU countries are also already involved. This is the first EU-wide coordinated law enforcement action against cybercrime.

The Cybercrime Case Analysis

The authorities of several EU countries have been investigating operators of illegal and fraudulent binary options and broker scams since 2017. Among the main suspects were the German Uwe Lenhoff, 55, and the Israeli Gal Barak, 33, as well as more than two dozen direct suspects from several countries and several dozen employees of illegal boiler rooms.

Uwe Lenhoff was arrested in Austria in January 2019 and extradited to Germany in the summer. There he is in custody. According to a recently published report by the largest German TV station ARD, the public prosecutor’s office in Saarbrücken is working intensively on an indictment. His Israeli partner Gal Barak was also arrested in Bulgaria in early 2019. He wanted to flee to Serbia, but could be picked up at the border. After a short prison stay in Sofia, Gal Barak was released under house arrest. At the beginning of December 2019, the competent court in Sofia approved his extradition to Austria. Gal Barak is to be charged there.

In addition to Uwe Lenhoff and Gal Barak, other principals of the global cybercrime organization are under investigation. These include Gery Shalon, an Israeli national accused in the United States of financial crime, securities manipulation, and money laundering, and Vladislav Smirnov, a Russian national and payment services expert. Another focus of these EU investigations is the Netherlands and the Balkans.

Serbia and the Albanian arrest

ARD reports that another member of the leadership team of this cybercrime organization was arrested in Albania. FinTelegram suspects that this is the longtime partner of Uwe Lenhoff, the Albanian Betim Tasholli. He had operated the so-called Silkline (Silkline Group shpk) boiler room for Lenhoff’s scams in Kosovo. The client-victims of the binary options Scams Option888, XMarkets, TradoVest or LottoPalace were attacked via this boiler room. These Silkline boiler rooms have actually been established and developed by Israeli cybersecurity expert Karin Zalcberg and her partner James Azar. Both now work in the U.S. as cybersecurity experts.

All these scams are directly connected to Lenhoff’s public-listed company Veltyco Group PLC, registered in the Isle of Man. As a matter of fact, Betim Tasholli acted as a trustee for Uwe Lenhoff for certain Veltyco transactions. He is recorded in the Offshore Leaks Database as the nominee shareholder for Quasar Holdings Ltd the ultimate beneficial owner (UBO) of which was Uwe Lenhoff. In April 2017, Veltyco bought a 51% stake in this company for a total consideration of €2 million in the so-called “Bet90 Acquisition“. Ironically, the sports betting platform Bet90 is currently the core business of Veltyco Group PLC.

Tasholli was used to be the nominal shareholder in Lenhoff’s Lensing Management Ltd, registered in the British Virgin Islands, the principal shareholder of Veltyco. No surprise, this guy is a very interesting man to the authorities.

Betim Tasholli and his co-conspirators have been the target of a law enforcement action in Kosovo a few months ago. FinTelegram reported on the “Kosova Razzia” here.

35 Office Raids indicate to hundreds of broker scams

According to the ARD report, there are said to have been 35 office raids in five jurisdictions so far. In this EU-wide law enforcement actions, documents are said to have been seized that point to several hundred illegal investment (broker) scams. The highly decentralized, geographically dispersed but highly networked cybercrime organization makes multi-jurisdictional investigations complicated for the authorities. Money easily crosses borders, law enforcement cannot!

Following the Amsterdam Connection down to Belgrade

Of utmost interest for the authorities in connection with this vast EU cybercrime case is the Amsterdam connection. This is mainly due to three facts:

  • Lenhoff claims to the authorities in his statements that he and his partners own 4,400 condominiums in Amsterdam;
  • One of Lenhoff’s most important partners was the Amsterdam real estate investor Dirk Jan (“DJ”) Bakker who is also incriminated by Lenhoff in his statements;
  • The ING subsidiary Payvision was one of the most important payment processors for Lenhoff and Barak and transferred the two million amounts until shortly before the arrest. Wiretap transcripts of phone conversations between Lenhoff and Payvision founder and CEO Rudolf Booker place a massive burden on the latter.

It is a fact that many binary options and broker scams had a connection to Amsterdam. The FinTelegram editor was personally present at meetings and discussions of binary options attackers with Lenhoff and Payvision people in 2016. Amsterdam was certainly a hub of the international broker-scam scene.

It is a fact that many binary options and broker scams had a connection to Amsterdam. The FinTelegram editor was personally present at meetings and discussions of binary options attackers with Lenhoff and Payvision people in 2016. Amsterdam was certainly a hub of the international broker-scam scene.

The Dutch investigative medium Follow the Money (FTM) is now also investigating this Amsterdam Connection. FTM journalist Siem Eikelenboom confronted ING and Payvision with corresponding accusations and received only evasive answers. FinTelegram and FTM will jointly investigate the Amsterdam Connection. From Amsterdam, there is a direct connection to Belgrade where Lenhoff and Barak were intensively involved.

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