Scams within the financial industry, particularly in the foreign exchange (forex), cryptocurrency and binary options space, are prevalent. On Tuesday, Ukraine’s law enforcement agency announced that it had caught and shut down the operations of one of these scams, an international FX pyramid scheme – Forex Trend Limited.
The Security Service of Ukraine (SBU), which is Ukraine’s main government security agency, announced that its officers had blocked the activities of the organizers of Forex Trend Limited, which has caused millions in losses for citizens of Ukraine, as well as residents in other European Union (EU) countries.
The press center of the SBU said on Tuesday (translated): “The task force discovered that the offenders under the guise of the operation of the international investment company Forex Trend Limited, using previously created websites and supposedly trading platforms, attracted funds of citizens in very large amounts, guaranteeing windfall revenues in the short term.”
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According to the SBU, the organizers of the pyramid scheme managed to take funds from several thousand Ukrainian citizens and foreigners, which equaled more than UAH 340 million ($12.5 million).
Forex Trend Limited Fraudsters Laundered Money Through Dummy Companies
The funds were taken by the offenders and laundered through a chain of companies, which appear to be dummy companies or offices registered in offshore jurisdictions, as well as private individuals in Ukraine and the EU. Furthermore, the money was laundered through the purchase of luxury goods, both in Ukraine and in other EU countries, the statement said.
Law enforcement officers conducted a series of raids on the residential premises of the scam participants and their associates in the Kyiv, Zaporizhia, Dnipro, and Kharkiv region. During the raids, SBU officers seized documentation, fake seals and digital storage media which confirmed that illegal activities had taken place.
This proof includes cash received from a transaction, jewelry, gold bars, gilded watches, and also firearms. Following the investigations, the members of the pyramid scheme have been notified that they are suspected of committing a crime under Part 4 of Article 190 of the Criminal Code of Ukraine (fraud).