German and Austrian police joined forces and together raided several offices and apartments in Germany, Austria, Kosovo and the Czech Republic, in search of evidence and suspects in binary trading scam. It is believed how Israeli-based binary options scam cost German traders millions of money, by convincing them to deposit while downplaying the risk at the same time. Also, it is believed how 35 locations raided, are not the only ones on the list and how the investigation will continue. The police arrested 10 suspects, for who they believe are related to XMarkets, ZoomTrader, TradoVest, Option 888 and TradeInvest90.
All these websites used Tradologic platform, Tradologic is an online trading software provider that was founded by Israeli but operated from Bulgaria. This is not the first time that a binary options scam took international proportions: in February 2019, Austrian prosecutors did an investigation and raid offices belonging to brokers like OptionStars, Goldenmarkets, OptionStarsGlobal, XTraderFX, SafeMarkets, and Cryptopoint. They all used Tradologic interface and had a bad reputation in the online trading community.
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Even though the police arrested 10 suspects, we know only one name – Karsten Uwe Lenhoff who has great experience in the online gambling industry, as well as in the sports betting industry. German journalists allegedly have a list of 200.000 traders from Germany who all deposited with these brokers. To make things more interesting, in the city of Saarbrücken that has around 180,000 citizens, there are 233 victims who lost more than 40,000 euros on average. The proportions of this case get even bigger if we believe the rumors how the same organization actually owns 400 similar websites.
A German TV show that published a story about this case found out how scam tactics used by these frauds are nothing new. All traders were recruited via phone calls and social networks. Agents, employed by the broker, would promise great trading experience, high payouts – in a single word – easy money. After the deposit was made, the trader was connected to an expert or a manager who would motivate the trader to deposit more and more, usually promising that the next trade is “the one”. Of course, those profits never happened, and when the trader would want to do a withdrawal, they would prevent him by saying how there is a glitch in the software and the request can’t be processed, or that only their manager can approve a withdrawal, and he/she is on vacation. Investigators believe how trades never even took place, and that traders had a virtual experience of trading. The money went directly to scam’s bank accounts. It is surprising how this scam didn’t have offshore bank accounts in tax oasis, but in reputable European banks:
- Sparkasse Koblenz Germany
- Fidor Germany
- ING Belgium
- Barclays UK
- HSBC UK
Sparkasse Koblenz and Barclays issued a statement about how they closed the accounts belonging to suspects. Sparkasse Koblenz notices a heavy flow of money that seemed suspicious and closed it even before the investigation took place. The other three banks did not respond whether or not the accounts are still open but stated they do everything according to law. Inside sources told German journalists how these accounts were open by citizens of Romania and Lithuania and how they stated they offer consulting services, as well as distribute software. Considering all this, this investigation is far from closure, and we can expect more news about it very soon.