29 January, 2020 | AtoZ Markets – Russian police have initiated criminal proceedings against an unknown number of scammers for operating illegal online trading scheme, reports the local news outlet Fontanka. Moreover, the scammers are impersonating themselves as the official representative of the Forex broker Larson&Holz.
Larson & Holz IT Ltd is registered in Saint Vincent and the Grenadines and offers access to various OTC markets, including forex, CFD and binary options. The broker does not have a license from the Russian central bank, which regulates the FX industry in the country. However, the broker claims that it does not need to acquire any licenses as it facilitates transactions and maintains funds only in a blockchain-based environment.
Police Raids Scammers Impersonating FX Broker
The Ministry of Internal Affairs has made an announcement on Tuesday confirming the arrests made on suspicion of fraud and false representation. The police is also enquiring some other companies such as RBC and MTS, but did not reveal any of the arrested individuals. Police seized documents and computers during the raid, which included 40 private apartments and a dozen offices.
According to the police statement, the scammers had operated as a high yield investment program (HYIP) with a minimum deposit of $ 5,000. As usual, the questionable profits dried up long before the original investment amount paid off. The Petersburgers' deposits were stolen immediately and never participated in the forex markets, authorities said. The official of the Russian Ministry of Internal Affairs, Irina Volk also said:
"It was a large-scale fraud. According to preliminary estimates, the damages resulting from the illegal activities of the impersonating brokers have exceeded 21 million rubles".
Read More: Corona Virus Affects Financial Organizations in Hong Kong
30 Victims Statements Appear in the Case
According to local news outlet, about 30 victims' statements appear in the case. Currently, police have handed over more than ten people to the Central State Administration offices on Ligovsky 145. However, two of them might have a link with the organization of the scheme. They are 45-year-old businessmen from St. Petersburg - Kirill Kuzin and Ruslan Dakalo.
The police statement reads, the active members of the group identified, and two alleged organizers - co-founders of shell companies. Each of the accomplices assigned a specific role. Those are managers, client managers, accountants, instructors, and specialists. They also allegedly operate in the currency, stock, commodity and cryptocurrency markets.
Think we missed something? Let us know in the comments section below.