Finally, it happened! Tens of thousands of scam victims in the EU have been waiting for this for months. EFRI has sent petitions to the EU and the Bulgarian Prosecutor General. Under the leadership of Austrian cybercrime experts, various authorities in the EU have been investigating the binary options and broker scams of Gal Barak and his partners since 2017.
In January 2019 the investigating authorities were successful. The German Uwe Lenhoff was arrested in Austria. An EU arrest warrant was issued against the Israeli suspect Gal BARAK. BARAK wanted to flee to the non-EU country of Serbia but was arrested at the border. After a brief detention in Bulgaria, Barak was released into house arrest in his house in a noble suburb of Sofia.
Bulgarian Scam Hub attacked Europe
Lenhoff and Barak had made Sofia a center of their activities. Gal Barak operated several scam and illegal boiler rooms in Sofia through his Tradologic and E&G Bulgaria.
Lenhoff, on the other hand, also had his headquarters in Sofia with his Winslet Enterprises EOOD. Lenhoff also founded the listed Veltyco Group PLC in 2016. The funds from cheated retail investors and consumers were channeled to the Bulgarian companies of Lenhoff. In many cases also via companies in Montenegro and Serbia.
Shared payment services
While Lenhoff and Barak each operated their own scams, they shared many resources. In Montenegro, for example, they operated the Global Payment Solutions Podgorica DOO together with a local lawyer. They also worked together in the area of boiler rooms. This created “synergies” for the efficient ripping off of retail investors.
Lenhoff and Barak have also worked closely with Rudolf Booker‘s Dutch Payvision for their various scams. Until shortly before the arrest of Lenhoff and Barak, Payvision transferred millions to the accounts of Barak’s companies at the Bulgarian Investbank. Money laundering on a grand scale.
Lenhoff has already told – the prosecutors – about his cooperation with Payvision. The interrogations of Barak will hopefully bring further clarification. This clarification is necessary in order to identify and recover the money of the cheated retail investors.
The Scam Grasshoppers
To understand the European cybercrime scene, it is important to understand that most scammers know each other quite well, at least they (sell and/or buy) exchange client-victim data, very often they use the same payment gateway provider and/or shell companies and/or acquiring organizations. The leaders of the scam scene are mostly Israelis who already have a close sense of togetherness. In this respect, the arrest of a key person like Gal Barak can lead to the uncovering of other scams and their supporters and facilitators.
This close cooperation of the scammers results in regular scam hubs like Sofia, Belgrade or Podgorica. Like grasshoppers, the scammers wander between jurisdictions with constantly changing companies and are difficult to reach for victims, lawyers and authorities.
In the United States, prosecutors currently indict binary options scam schemes around the Israeli Yukom Communications. More than 20 suspects are investigated and accused by US prosecutors of cheating retail investors with their scams BinaryBook and BigOption. Almost all suspects are Israelis. The former CEO, the Israeli Lee Elbaz, has already been found guilty of investment fraud and faces a long prison term. Five other former employees have already pleaded guilty. The owners of Yukom, the Israelis Yossi Herzog and Kobi Cohen are also indicted and awaiting trial. In case Israel extradites to the U.S. In the course of the trial, the US prosecutors have shown in great detail how these Israeli scam systems have created victims around the world.
Enforcement agencies and investigations
Lenhoff was extradited to Germany after his arrest in Austria. Together with other suspects, he is intensively interrogated there by the authorities, as reported by German Media outlets. For months the authorities have been working with Lenhoff’s statements to get the overall picture of his gigantic scam network.
The German public prosecutor’s office wants to charge Lenhoff and his accomplices with operating a criminal cybercrime organization.
Bulgaria blocked investigations for months
Lenhoff’s partner Gal Barak, on the other hand, could hardly be interrogated by the authorities in Austria and Germany during the past 10 months. With the help of his Bulgarian and Austrian lawyers, he has avoided extradition to Austria until Dec 2, 2019 (more than 10 months). In Bulgaria, he was able to continue the scams with the support of his Bulgarian wife and partner Marina Andreeva (now Marina Barak) and his partners Gery “Gabi” Shalon and Vladislav “Vlad” Smirnov.
The extradition that has now taken place gives the authorities in Austria and the EU for the first time the chance to obtain the relevant information from Barak during interrogations. They can also confront him with specific allegations. For the tens of thousands of victims of the Lenhoff and Barak scams, this extradition is a breakthrough in the EU’s fight against cybercrime and scams. With the imprisonment of Lenhoff and Barak, there is a legitimate chance that one will get the backers, accomplices, participating financial service providers and boiler room agents. That would be a decisive blow against the incredibly large cybercrime network.
Justice for victims
In any case, it will be exciting. Both Barak like Lenhoff obviously refer to other people. Among them well known people like Dutch real estate investors or financial service providers. They try to distribute their responsibility among other parties involved. Barak’s extradition will also have an impact on the strong cybercrime scene in the Balkans.
In Serbia alone, in 2017/18, 7,000 Israelis worked in boiler rooms and marketing companies in Serbia, attacking retail investors in the EU. The extradition of Barak to Austria will also contribute to the fight against of the cybercrime scene in the non-EU states on the Balkans.
The interrogations and trials against Uwe Lenhoff, Gal Barak, and the many other suspects will hopefully lead to the victims getting back at least part of their money. Not only the scammers are responsible for the fraud, but also those payment service providers like Payvision who have facilitated the transfer of the funds to the fraudsters. This despite public warnings from financial regulators against these scammers from 2015 onwards.
We should consider the extradition of Gal Barak to Austria as a token that the EU authorities are finally taking action against the scammers and their supporters.
Questions to answer
The most important questions for Gal Barak must be his connections with his US accused partner Gery Shalon and his Russian partner Vladislav Smirnov. It must also be clarified what role the joint companies in Serbia, Bosnia-Herzegovina, and Montenegro have played in money laundering. This is where the trace of the money