Last updated on May 11, 2020
GreyMountain Management Ltd (GMM) started its Irish operations in May 2014 and was sent into liquidation in July 2017. In more than 3 years, hundreds of millions of payments from client-victims of owned and/or related binary options scams have been processed. Former GMM employee and developer Simon Kinsella estimated that in the period between April 2016 and June 2017, $150 million in credit card payments were processed through GMM. This does not include, however, payments through the other Cartus´legal entities. Neither are bank transfers. In his statement, Kinsella also confirms Wirecard’s close involvement with GMM and the existence of Snow Charge, an alleged money-laundering system.
The Canadian-Israeli Binary Options Plague
GMM, the Cartu Brothers, and their network of entities and individuals including the Israeli Uri Katz have been the operators of some of the worst binary options scams, such as BeeOptions, Glenridge Capital, Edgedale Finance or Innovate Markets. Moreover, they facilitated third-party schemes with their white-label broker solution offered by Katz’ Worldwide Tech Limited and their plethora of payment processing entities. Between 2014 and 2017, their official home base was in an office building in Dublin, Ireland, next to the office of the Irish Wirecard subsidiary.
The Irish Family Business
At its launch in 2014, GMM was looking for payment processors for its freshly squeezed binary options schemes. That was given the past of the Cartu brothers apparently not so easy reports Kinsella in his report called “Project Avalanche”. David Cartu is said to have worked as a payment processor for the gaming and gambling industry before.
In the end, however, David Cartu was successful at Wirecard UK & Ireland. At the time, Michelle Molloy was a director at the Irish Wirecard subsidiary responsible for sales and operations. Kinsella suspects that bribery may have been involved. Fact is, for sure, that Michelle Molloy‘s then 18-year-old son, Ryan Coates, as well as her cousin Martina Hennel, were installed as management at GMM. Family business instead of proper compliance.
GMM was located in Dublin in the same office building (Ulysses House on Foley Street) as Wirecard UK & Ireland. This was convenient for both sides and allowed for short votes.
We heard that Kinsella was threatened by the Cartu brothers for his Avalanche Project report. His LinkedIn profile got deleted and his Avalanche Project report disappeared from the net. However, FinTelegram has a copy of it.
Michelle Molloy and MegaCharge
By the end of 2016, Michelle Molloy resigned from her post as CEO from Wirecard UK & Ireland and became a director at Cartu’s new payment processor Mega Optimization Ltd (d/b/a MegaCharge) in January 2017, alongside David Cartu. However, MegaCharge was apparently buried after the end of GMM. Molloy adapted her LinkedIn profile after the FinTelegram 2018 reports, calls herself now simply Michelle M., and deleted her activity for MegaCharge. However, her activity can be easily traced in the Irish companies register (Source: UK Companies Check).
Also the traces of MegaCharge have been deleted on LinkedIn and the web in the best possible way.
The Snow Charge Laundromat
GMM and its network of bogus companies evidently acted as a so-called Third-Party Acquirer (TPA) – channeling fraudulent merchants to Wirecard and some other acquirers by delivering the KYC service as well as a layer service – hiding the fraudulent nature of the actual merchants. According to the developer responsible at GMM at the time, this Snow Charge payment gateway solution was designed as a huge money-laundering machine. So allegedly, GMM had developed the credit card payment processing solution “Snow Charge” which systematically faked payment transactions and made them look legitimate to the credit card networks. Snow Charge was a huge success in the global binary options scammer scene:
The payment information is made to look like it came from a “bona fide” website called “Sithtrader.com” (in some cases) before it is sent through a “reverse proxy” to the legitimate PSP … Originally the legitimate PSP did not know about this.Simon Kinsella on Snow Charge
As months went by GMM got busier and busier taking more and more brands on. Word was spreading like wild fire within the binary options industry that GMM was offering a binary options payment processing service that was easy to use. Very little due diligence was performed on these new companies.Simon Kinsella, GMM employee and developer
With Snow Charge it was possible to prevent the credit card networks from detecting fraud, transaction laundering at its best. The individual transactions were re-coded and masked. Snow Charge was thus an upstream system for Wirecard.
The audit report now available from KPMG has highlighted Wirecard‘s serious and systematic problems with KYC and AML. Wirecard had outsourced this compliance activity to third-party acquirers such as GMM. And these had put their own payment gateway solutions over the Wirecard system and obviously misused Wirecard acquiring services and probably also its bank accounts as a gigantic money-laundering machine. Given the close personal relationship between Wirecard and GMM in Ireland, it may be assumed that the functionalities of Snow Charge was well-known to the management of Wirecard. In addition Wirecard must have received hundreds if not thousands of victims´complaints and charge back requests as some of the issuing companies told their customers that Wirecard acted as acquirer of the fraudulent merchant.
If the portrayal of Snow Charge by the then responsible developer at GMM is correct, this would confirm the accusations concerning Wirecard and its support of scams. Regardless of whether and to what extent the Wirecard management was involved in the manipulation of their TPAs, it turns out that the implemented KYC/AM/CTF procedures did not work. This alone represented a massive violation of regulatory obligations.