Investment Fraud

Investment fraud scammer arrested

A cross border Police operation, supported by Europol, led to the arrest of a Croatian national believed to have been running a large-scale, multi-layered investment fraud scheme which cost unsuspecting victims a total of at least €5 million. Over 70 German victims have been identified so far.

On 6 October, the 50-year old man was arrested in Tenerife, Spain, by the National Police, as a result of a complex investigation involving four countries (Germany, the Netherlands, Spain and Hungary).  This arrest follows a complex investigation initiated in December 2019 by the German Police Headquarters Ludwigsburg, with the support of Europol’s European Financial and Economic Crime Centre (EFECC).

On the action day 37 property searches were carried out: Germany (18), the Netherlands (12), Spain (4) and Hungary (3).

How The Investment Fraud Scam worked

  • The criminal pretended to be an employee of a real, Geneva-based investment company, reaching out to unsuspecting victims to persuade them to part with their savings, and promising lucrative investment companies.
  • To appear legitimate, he set up a fake (spoof) website which looked almost identical to the real company’s website.
  • To trick his victims he provided fake investment documents that appeared to come from legitimate banks and insurance companies.
  • The victims were instructed to send funds, via wire transfer, to bank accounts he controlled.
  • Once the payments had been made, he disappeared with the money, moving the stolen funds from one jurisdiction to the other to conceal their illegal origin. (The investigators were able to track the stolen funds to Türkiye).

European Coordination

International police cooperation was central in bringing the perpetrator to justice as the criminal had set up a sophisticated infrastructure spread across multiple countries to hamper law enforcement’s abilities to track him down.

Europol’s EFECC supported the investigation by bringing together the national investigators to establish a joint strategy and to organising the intensive exchange of evidence needed to prepare for final phase of the investigation.  Europol experts from its European Financial and Economic Crime Centre were also deployed to Spain to assist the Spanish national authorities with the action day.

Stay Safe!

Europol’s advice to prospective investors to avoid investment fraud:

  • Don’t rely on unsolicited marketing material/calls/emails or social media direct contact: Do an internet search for the company name and verify the contact information with the financial institution or firm directly.
  • Compare and confirm websites: Check for misspellings in the website, the complete website name (URL) and email address. Also, many consumer protection and financial market supervisory authorities publish lists of abused websites and warnings on current frauds.
  • Avoid unusual payment methods: Be cautious if you are instructed to send funds via wire transfer to an off-shore location, or if you are instructed to pay using cryptocurrency or other unusual payment method.

The EAST Expert Group on Payment and Transaction Fraud (EPTF), which meets three times each year, focuses on the prevention of payment and transaction fraud, including investment fraud. The 13th EAST EPTF meeting took place on 29 June 2022.

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