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OPERATION “PONZI 14” – Action day against large-scale investment fraud

The Hague, 24 June 2013

Law enforcement and judicial authorities carried out a joint operation in France, Malta, Germany, Portugal, Luxembourg, Belgium, Switzerland, Italy, Cyprus and Seychelles in the early hours of 17 June. A coordination centre was set up at Eurojust and run by the French National Desk, with the assistance of other involved National Desks and the Case Analysis Unit, providing analytical support prior to and throughout the joint action.

This coordination centre was the first at Eurojust to deal with financial crime of such enormous scale and complexity, and required the coordination of arrests and searches of premises as well as the freezing of assets.

The investigation into the organised crime group began in France in early 2012, carried out jointly by the French Gendarmerie (Section de Recherches of Caen) and the French Police (DIPJ of Caen), led by an investigating magistrate of the Juridictions Interrégionale Spécialisée (JIRS) in Rennes. Eurojust supported the investigation by facilitating the transmission and execution of mutual legal assistance requests and holding a coordination meeting in May, where the scope and details of the joint operation were discussed and planned.

The organised crime group recruited investors in France, Germany and Italy, using various means to gain their trust (large meetings in hotels, use of luxury cars, participation of financial experts and alleged representatives of the ancient Order of Malta). Investors made a minimum investment of EUR 5 000 for a promised return of 20 per cent, and were promised a return of 300 per cent for investments of EUR 100 000 over a period of five years. The proceeds were placed in bank accounts in Seychelles, Malta and Cyprus, and invested in real estate, boats and yachts in France and Azores, Portugal. Approximately 400 victims of the fraud have been identified throughout Europe and the damages suffered are estimated at a minimum of EUR 23 million.

More than 200 law enforcement officers were deployed for this operation, including 100 in France, 16 in Malta, 56 in Germany, 11 in Portugal, 10 in Italy, 7 in Luxembourg and 2 in Cyprus. 16 persons were arrested and 6 others were interviewed as suspects. A number of premises were searched and investigations into banks were carried out, resulting in the freezing of around EUR 700 000 in bank accounts. Significant seizures were made: three boats and one yacht, two villas, fourteen luxury cars, valuable paintings and jewellery.

Mr Vincent Jamin, Assistant to the National Member for France, said: “All the participating countries demonstrated a high level of commitment to dismantling this organised crime group. Eurojust’s added value was shown by its ability to coordinate such a large-scale transnational investigation and synchronize common operations, including the freezing of assets.”

Dr Donatella Frendo Dimech, National Member for Malta, remarked on the success of the action day: “We have witnessed judicial and police cooperation materialise, not just in Malta but in a broader European context. Eurojust provided a forum for prosecutors and law enforcement officials to work in a joint and concerted effort with a common goal – ensuring that a Europe without borders does not translate into an area where criminal activity can take place unfettered. In the fight against crime there is no weapon which is more effective than the determined resolve of judicial and police authorities. Judicial cooperation serves this purpose precisely and this operation bears witness to this.”

In a Ponzi scheme, potential investors are recruited by other investors and promised huge returns. Any money the investors receive is then funnelled back into the fraudulent company to pay new investors. A Ponzi scheme involves no bona fide investment or services. The scheme essentially runs itself, as investors are recruited and then in turn recruit other investors. The scheme ultimately fails, most notably when money stops flowing into the investment operation.

For more information, please contact:

Ms Leen de Zutter, Assistant to the Press Officer
EUROJUST - Maanweg 174, 2516 AB, The Hague, the Netherlands
Tel +31 70 412 5507