Category: Malta

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Eurojust helps tackle massive fraud of EUR 645 million with medicinal cannabis plants across Europe

Source: Eurojust

In Germany, France and Spain alone, over 4 500 victims have lodged formal complaints against the fraudsters, who set up a crowd-funding programme to raise a minimum of EUR 50 per investor for the development of medicinal cannabis plants. In reality, no cannabis plants were ever bought, although the organisers of the scheme pretended to work with legitimate and licensed enterprises that would cultivate them. The fraud ran from at least January 2020 to July 2022.

The entire scheme had the character of a pyramid or ‘Ponzi fraud’ and promised extremely high returns on investment. Investigations in Germany and Spain, later followed by counterparts in other countries across Europe, showed that investors had been only partially paid.

Most of the invested money was used to pay affiliates, keep the scheme running and expand the fraud through extensive online campaigns. For this purpose and to launder the proceeds, a web of international enterprises was used. The scheme itself appears to have been run by a Russian criminal network, with an affiliated German-based crime group.

Victims in Germany and Spain claim to have lost at least EUR 51.5 million, but the total investment is estimated to be close to EUR 645 million. In total, around 550 000 participants worldwide were registered as online investors, most of them European citizens. Around 186 000 participants transferred funds, either via cryptocurrencies or bank transfers.

Since 2022, Eurojust has been extensively supporting the national authorities, including assisting the German, Spanish and French authorities in setting up and funding the JIT. This led to a successful Joint Action Day coordinated at Eurojust.

At the request of the German and Spanish authorities, in recent days operational actions against the criminal networks were also carried out in Estonia, Latvia, Italy, Malta, Poland, Portugal, the United Kingdom and the Dominican Republic. The French authorities made a decisive contribution to the analysis of crypto flows during the investigations and took part in searches in Germany and Spain on the action day.

Europol supported this massive cross-border investigation from the outset, taking the lead in operational coordination and providing tailored analytical support. Furthermore, Europol shared results of the financial investigations as well as other intelligence with the involved countries. On the action day, Europol deployed officers with mobile offices to various locations worldwide.

During the action days, over thirty places were also searched and for several millions of Euros in crypto assets and bank accounts were frozen. Also real estate properties, luxury vehicles, artwork, cash and various luxury items were seized, as well as large numbers of electronic devices and documents.

The operations were carried out on the ground at request of and by:

  • Germany: Public Prosecutor’s Office Berlin; Criminal Investigation Department Berlin (LKA)
  • Spain: Central Investigative Judge no. 6 at the Audiencia Nacional; National Police (Policia Nacional – UDEF Central Brigade against Economic Crime, Financial Fraud Group)
  • France: Paris’ Prosecutor’s Office JUNALCO (National Jurisdiction against Organised Crime); Gendarmerie Nationale (Research Section Rennes)
  • Estonia: Office of the Prosecutor General; Police and Border Guard Board
  • Latvia: Prosecutor General’s Office; International Cooperation Department and Economic Crime Enforcement Department of the Central Criminal Police Department of the State Police
  • Italy: Postal Police Service of the National Police – Operational Section for Cyber Security, Macerata, and Operational Centre for Cybersecurity of Marche
  • Malta: Malta Police Force – International Relations Unit
  • Poland: Public Prosecutor’s Offices of Jelenia Góra, Lublin, Warsaw, Warsaw Praga and Wrocław; Central Bureau for Combating Cybercrime
  • Portugal: Central Public Prosecutor’s Office Lisbon (DCIAP); Judicial Police (Policia Judiciária)United Kingdom: National Crime Agency
  • United Kingdom: National Crime Agency
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Eurojust supports an EPPO-led operation against carousel VAT fraud for the first time

Source: Eurojust

During the searches, law enforcement seized vast quantities of smartphones, worth more than EUR 15.3 million, as well as a yacht, worth EUR 3 million, and EUR 1.2 million in cash and cryptocurrency. Several luxury cars, jewellery, luxury watches and 2.5 kg of gold were also found.

The suspects are being investigated for large-scale cross-border Missing Trader Intra-Community (MTIC) fraud involving the trade of electronic goods and protective face masks through companies based in several European countries. MTIC fraud is the theft of value-added tax (VAT) from a government by organised crime groups. The perpetrators are believed to have defrauded up to EUR 195 million through several criminal schemes. Most of the VAT damage was caused in Sweden, where the missing trader companies were based.

Eurojust supported two investigations targeting the same crimes, one led by the EPPO and a second one led by the Swedish authorities. The EPPO investigation targeted the two managers and shareholders of a German distributor company that was acting as an in/out buffer/conduit company in the fraud chain. It purchased and sold mobile phones to other companies in several countries, which were then sold to the Swedish missing trader companies. Eurojust was instrumental in identifying ongoing linked investigations in Sweden, targeting the individual behind the Swedish missing trader companies.

The case was opened at Eurojust in 2021 at the request of the German European Delegated Prosecutor. Eurojust facilitated the cooperation between the EPPO and Sweden, Denmark, Hungary and Poland – all EU Member States that do not participate in the EPPO – and the United Kingdom. Eurojust can support cross-border cooperation in EPPO cases that involve countries that do not participate in the EPPO. The Agency also facilitated cooperation between Sweden and Malta.

The Agency hosted seven coordination meetings to facilitate judicial cooperation between the EPPO and the national authorities involved in the case. Eurojust facilitated the exchange of information and the execution of several European Investigation Orders and European Arrest Warrants.

During the action day, a coordination centre was set up at the EPPO premises in Luxembourg, for the first time jointly with Eurojust. The Eurojust coordination centre focused in particular on coordinating the execution of the Swedish measures in Malta.

In the run-up to the action day, Europol provided analytical support to the partners in this investigation. Furthermore, Europol supported the action day by providing over 100 secure communication channels (VCP – Virtual Command Post), and by deploying a specialist with a mobile office to the operational command centre at EPPO’s headquarters in Luxembourg.

Eurojust and the EPPO signed a Working Arrangement in February of 2021 to facilitate cooperation between the Agency and the EPPO.

The following authorities took part in this investigation:

  • Germany: German Tax Investigation Offices in Berlin, Bielefeld, Cottbus, Münster and Nuremberg; Police Headquarters from Nordhessen and Brandenburg; State Criminal Police Offices from Brandenburg and Berlin;
  • Malta: Malta Police Force – Financial Crimes Investigation Department and International Relations Unit;
  • Poland: Circuit Prosecutor’s Office in Warszawa and Zamość; Police Headquarters in Warszawa and Zamość;
  • Sweden: Swedish Economic Crime Authority.
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Over 100 searches and four arrests in Latvia, Germany, France, Italy and Malta against financial institution involved in money laundering

Source: Eurojust

National authorities in Latvia, Germany, France, Italy and Malta have carried out over 100 searches in a large-scale operation against a Russian-Eurasian criminal network and a Maltese-based financial institution allegedly involved in money-laundering services. Four suspects were detained during an action day supported by Eurojust and Europol. Potential suspects and witnesses were also interviewed in Latvia, Germany, Estonia and Malta.

During the actions, over 460 police officers were deployed to carry out the searches. Germany also deployed four officers to support the investigations and searches in Latvia and Malta. In addition to the arrests, various bank accounts and properties were seized.

The Maltese financial institution laundered at least EUR 4.5 million in proceedings from criminal activities since end of 2015. The total sum of laundered money could amount to tens of millions of euros. The financial institution and organised crime group (OCG) behind it offered money-laundering services via a network of fake enterprises and individuals who were registered directors, without performing any real business activities.

The OCG operated mainly from Riga and Berlin. Investigations were initiated in 2021 by the Latvian authorities after they noticed unusual money transfers from Latvia to the Maltese financial institution. Simultaneously, the German authorities had started investigations into suspicious money flows involving the same financial institution.

Eurojust supported today’s concerted action by setting up a coordination centre and establishing and funding a joint investigation team between the German and Latvian authorities. The Agency also organised five dedicated coordination meetings to prepare for the action day and assisted with the execution of European Investigation Orders in the countries involved.

On the action day, Europol deployed a money laundering expert to Latvia and set up a mobile office at Eurojust’s coordination centre to support the operation. Since December 2021, Europol has been supporting the investigation by providing operational and financial analysis and operational expertise. The Agency also supported the joint investigation team and provided financial support to the case.

Today’s operations were carried out by the following authorities:

  • Latvia: Rīga Northern Prosecution Office; Rīga Judicial Region Prosecution Office; 1st Unit of the Economic Crime Enforcement Department of the Central Criminal Police Department of the State Police
  • Germany: Public Prosecutor‘s Office Berlin (Staatsanwaltschaft Berlin); State Office of Criminal Investigations Berlin (Landeskriminalamt Berlin)
  • Estonia: Office of the Prosecutor General of the Republic of Estonia and Estonian Police and Border Guard Board
  • France: Public Prosecutor’s Office and Investigative Judge – Judicial Court of Nice; National Police (DIPN) Alpes-Maritimes Division (Judicial Police Nice; Research and Intervention Brigade; Financial Brigade) – Border Police
  • Italy: Public Prosecutor’s Office Rome; Guardia di Finanza, Financial Police Unit Rome (Nucleo Polizia Economica e Finanziaria di Roma)
  • Malta: Financial Crimes Investigations Department and Asset Recovery Bureau of the Malta Police