Fake Financial Services Network Defrauds German Investors Out of $17Mln

MOSCOW (Sputnik) - A fraudulent binary options trading platform spanning three European countries has been busted this month after persuading German investors to put in millions of euros in unrefunded deposits.

The cross-border criminal operation was taken down in a series of raids across Bulgaria, Ukraine and Cyprus on October 8. Police from the three countries worked together with German and Dutch authorities, the EU police force Europol said.

"Operating between May 2019 and September 2021, the criminal network lured German investors into making transactions worth a total of at least €15 million [$17 million]," Europol said in a statement.

The Ukraine-based ring operated over 250 domain names and two call centres in Sofia. Their employees posed as financial advisers to encourage victims to invest large sums of money into fake binary options, a type of options contract in which the payout depends entirely on whether the stock price of the underlying asset will be above or below a specified amount at a given time.

"However, clients did not receive payment of their winnings or credit balance once they requested it. The investigation has so far led to 246 criminal proceedings across 15 German federal states"? Europol said.

Raids at eight locations in Bulgaria, Ukraine and Cyprus led to the arrest of a "high-value target" and the seizure of electronic equipment, bank accounts and data back-ups. Seventeen people were taken in for questioning.