Numerous individuals have invested substantial sums of money through an online platform in two foreign investment companies that are part of the same Group.

According to the Unit for Combating Cover-Up Crimes (UCUCC), funds received from recent investments were distributed to initial investors as profits, in an effort to create the perception of legitimate business activities.

However, the online platform ceased operations, resulting in the loss of capital for the investors. Suspicions of investment fraud escalated when similar units from abroad reached out to the UCUCC, requesting information about the two companies. These requests further substantiated claims of their involvement in investment fraud.

As Brief reports, UCUCC, in its annual report for 2022, disclosed that the investigation into this case spans multiple countries and anticipates the issuance of seizure orders for registration and enforcement in the Republic.

Initially, the Electronic Transport Foundation alerted the UCUCC about alleged fraud concerning the accounts of the two foreign investment companies. The foundation suspected unauthorized access to the companies' electronic accounts. However, as the Unit delved into the matter, the investigation took a different direction, with negative publications surfacing that referenced investment fraud of the Ponzi Scheme type.

To unravel the flow of funds and ascertain the destinations of investors' capital, the UCUCC's Analysis Department conducted a meticulous graphical analysis of the companies' transactions.

The Unit's analysis uncovered significant amounts of money being transferred through the accounts of the aforementioned foreign companies. The majority of these funds ultimately found their way into the coffers of foreign banks and other entities.

The findings of the analysis were shared with relevant Units in all countries involved. Simultaneously, the UCUCC received court-issued freezing orders through requests for judicial assistance from competent authorities of European Union member states. These orders enable the Republic to recognize and execute the seizure of substantial amounts, surpassing €4,000,000, held in the two accounts.

In its comprehensive annual report, the UCUCC thoroughly examined and documented the characteristics, trends, and techniques related to this case. The information was subsequently disseminated to interested parties for their awareness and understanding.

The key indicators of suspicious activity for the year 2022, based on the reports submitted by Obligated Entities, are as follows:

Firstly, insufficient documentation: As part of preventive measures to hinder money laundering, financial institutions require their clients to provide supporting documents for transaction execution. When clients are unable to comply with this requirement, it may indicate suspicious activity.

Secondly, negative information from the Media: Often, Obligated Entities come across negative information, such as from foreign or domestic media, regarding their clients. The identification of such negative information frequently leads to the submission of Reports.

Thirdly, fraud: One of the most common reasons for submitting a report is suspicion of fraud. This indicator includes suspicion of investment fraud, internet-based fraud, VAT fraud, and more.

Fourthly, activities lacking economic rationale: Nearly all businesses are created to generate profit, and their financial decisions are based on that premise. However, in some cases, Obligated Entities identify transactions that lack economic rationale. This can raise suspicions of illegal activities and lead to report submission.

Fifthly, unusual client behavior: Ambiguity surrounding business activities, refusal to provide required documentation or other supporting documents are just a few examples of unusual behavior that, when combined with other factors, raise suspicions and may lead to report submission to the Unit.

Sixthly, transactions inconsistent with declared activity and/or client's financial profile: Another common suspicion indicator pertains to individuals conducting transactions unrelated to their declared activities or their financial profile. In such cases, suspicions arise regarding the legitimacy of these individuals' actual activities.

Seventhly, forged documents: Another common indicator for report submission is the provision of documents that are suspected or proven to be forged. In many instances, documents are presented to the Obligated Entity to justify an action, such as invoices and bills of lading.

Eighthly, the use of straw men: A common suspicion is the use of straw men to conceal the ultimate beneficial owner of companies. Providing false or misleading information regarding the identity of the ultimate beneficial owner constitutes a criminal offense punishable by imprisonment and/or fines.

Ninthly, investigation by Law Enforcement Bodies: Reports are submitted to the Unit when Obligated Entities discover that their clients are under investigation by Law Enforcement Bodies, such as when the Police issues a court order for document disclosure to the Obligated Entity. This information may come to the attention of these entities from other sources as well, such as local media.

Tenthly, cash deposits: Systematic cash deposits of significant amounts raise suspicions for Obligated Entities and often lead to report submission. Such behavior is considered high-risk and is characterized as an indicator of illicit activity.