Police Across Europe Crush Ponzi Schemes, Recover Lost Money

Authorities in Europe have dismantled several investment fraud schemes across the continent and recovered some of the money victims lost. Confiscation of proceeds from crimes is a strategic priority of the European Union, Europol said.

Ponzi Scheme ELaw enforcement across Europe in action against investment fraud schemes. (Photo: Nick Youngson CC BY-SA 3.0 Alpha Stock Images, Picpedia)With the help of U.K. law enforcement and Europol, Spanish police recovered some of the over 15 million euro (US$18,2 million) hundreds of victims had lost in a ponzi scheme after a Spanish national living in the U.K. tricked them into making seemingly safe investments with high returns.

Police recovered about six million euro ($7,28 million) or some 40 percent of the money people invested, according to Europol.

“An investigation was launched at the beginning of March 2019 after a complaint was filed in Gerona, Spain, after the main suspect disappeared,” read the statement.

Other complaints soon emerged, detailing a pyramid scheme committed by the missing suspect.

U.K. authorities helping the investigation found more than £642,000 ($904,900) in U.K. bank accounts and froze them to ensure they can be confiscated. British investigators have also traced back a portion of the redirected funds that had been deposited in online gaming firms, a luxurious car, jewelry, and IT equipment.

“Confiscation is a strategic priority in the European Union's fight against organized crime. The recovery of proceeds from crime deprives criminals of what they have strived to acquire and strengthens the notion that ‘crime should not pay’,” read the statement.

In a separate operation last week, German authorities initiated the investigation into a large-scale online investment fraud network which deprived hundreds of victims of an estimated 30 million euro ($36,42 million), according to Europol.

“Victims from Germany alone suffered at least seven million euro ($8,49 million) in losses while 300 complaints were filed in Spain. The suspects laundered the illegal profits through bank accounts controlled or owned by shell companies based in different EU countries,” read the statement.

In the cross-border Germany-led operation supported by Europol and Eurojust, law enforcement and judicial authorities in Bulgaria, Israel, Latvia, North Macedonia, Poland, Spain and Sweden, helped dismantle the “criminal network involved in investment fraud and money laundering,” it explained.

Bulgarian police arrested five people during the operation, while one suspect was arrested in Israel and five in Spain. Police also searched a dozen locations in Bulgaria, Israel, Poland, North Macedonia and Sweden and seized “numerous electronic devices, real estate, jewellery, high-end vehicles and approximately 2 million euro ($2,42 million) in cash,” according to Europol.

The agency explained that the “criminal network created different trading online platforms advertising substantial profits from investments in high-risk options and cryptocurrencies,” and that at least four of these professional-looking trade sites were operated by the criminal group, which lured victims with ads on social media and search engines.

Europol also said that mainly Israeli nationals have organized the fraud scheme and that they had call centers in Bulgaria and North Macedonia.

“The members of the criminal group were posing as experienced brokers when contacting the victims via the call centre they had set-up. The suspects were using manipulated software to show the gains from the investments and to motivate the victims to invest even more,” read the statement.