Eleven arrests as German, Israeli and Georgian authorities stop major online investment scam

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Eleven arrests as German, Israeli and Georgian authorities stop major online investment scam

Europe's law enforcement agency Eurojust made 11 arrests as they dismantled a criminal network operating at least 18 online trading platforms, defrauding investors of at least tens of millions of euros, it said in a statement on 27 October.

Authorities in Germany, Georgia and Israel, with the help of Eurojust, targeted a group of fraudsters of Georgian and Israeli origin who had set up several limited companies, which operated these platforms.

They pretended to generate high profits on investments in financial securities, shares, commodity assets, currencies and cryptocurrencies.

Eurojust said seizures in Georgia and Israel last week was made of real estate, luxury vehicles, communication equipment and cash in Georgia and Israel, for a yet unknown amount.

Investigations into the fraud scheme started in 2015, after complaints from citizens, including German victims, who had lost all their investments via at least 18 different online trading platforms.

Investors, who had reacted to professional-looking online advertisements, were approached by employees of call centres, who spoke the language of their customers.

For this purpose, they used made-up names and fake or hidden phone numbers and provided false information on the location of the investment companies, trying to gain the trust of investors.

The perpetrators forecasted considerable gains on investments, which encouraged the victims to invest and subsequently lose substantial sums of money.

The profits were laundered via foreign bank accounts and later transferred back to their own account numbers, amongst others in Georgia. The overall trading took place in euros, US dollars and pounds sterling.

The operation was initiated by the General Public Prosecutor's Office (GPPO) of Bamberg in Germany, the Bavarian Central Office for the Prosecution of Cybercrime, with support from the Bavarian State Police.

During the operation, well over 100 law enforcement officers were deployed in Georgia, including close to 20 German officers and a German prosecutor.

Eurojust assisted the German, Georgian and Israeli authorities with the execution of requests for Mutual Legal Assistance and coordinated cross-border judicial support.

In Georgia, the operation was led by the National Prosecution Services, with coordination via the Georgian Liaison Prosecutor at Eurojust, who took up his duties last year.

In Israel, support was provided by the Department of International Affairs, Office of the State Attorney of the Ministry of Justice, Head of Fraud Unit - Central District and the International Legal Assistance Unit of the Israel Police.