Originally Syndicated on May 10, 2024 @ 4:04 am
The EFRI campaign, which was started in April 2019 by the media and EFRI, aims to reimburse investors who were duped by the broker scam KayaFX for their money. Since then, victims have provided us with a wealth of information that gradually but definitely paints the whole picture of this Bulgarian-Israeli broker scam enterprise. Actually, this scam’s perpetrators have been at it since 2014. First there was Tradorax, which offered binary options, and its running business, Alagos Limited (Gibraltar). Even though businesses and domains (Trading Styles) have changed since then, fraud hasn’t altered.
Switching brands and boiler rooms in Israel
It is crucial to realise that while the boiler rooms behind the scenes stay the same, trading styles (brands and domains), operational companies, and frontline staff change on a regular basis. Customer information is sold or traded amongst the various trading models. Based on the data that we have access to, Mercure Group EOOD (formerly known as Rax Media EOOD) and ABC Global EOOD, two Bulgarian firms, were and still are the boiler rooms—marketing companies or business process outsourcing providers—behind Tradorax and its successor brands. Both run sizable boiler rooms in Sofia that employ dozens of people.
The people in charge of the boiler rooms are Israelis, just like E&G Bulgaria, owned by Israeli Gal Barak. Established in January 2014 as RAX Media Ltd (ΜΞС ΜЕДИА) in Sofia, Bulgaria, Mercure Group EOOD was given the business number 202913389. Avi Itzkovich (Itzkovic) and James Henry Vigottski (Wygodsky) founded the company. According to the Bulgarian Companies Register, the company’s management team consists of a. The individuals associated with this plan will be covered in further detail in a different report.
Financial Regulator alerts
The authorities in charge of overseeing the financial markets have warned repeatedly about the illicit and dishonest trading practices, as well as the people who practise them. The following is a list of cautions:
The dates on which the investor warnings above were published demonstrate that this broker scam scheme is still in operation today, and authorities are still very busy handling the large number of complaints. It should be mentioned that regulators were not entirely aware of the possibility of binary options scams before 2016.
As a result, there weren’t many public alerts before 2016. Investors frequently take months to detect fraud, and regulators are only prompted to take action by investor complaints. In this regard, there can occasionally be a significant delay between the time the fraud is committed and the authorities’ public investor warning.
Companies and brands involved
Use EFRI to report your claims.
In the event that you have fallen prey to broker scams and their various trading tactics, kindly register with our European Fund Recovery Initiative (EFRI). We also appreciate all of the information you have provided about these brokers, their offenders, beneficial owners, payment service providers, and accomplices. Together, we can expose this massive scam, bring the perpetrators to justice, and get your money back.
Suspects in an Israeli-run investment scam are apprehended by European and Israeli law enforcement.
Police conducted searches and arrests on May 11 in relation to the purportedly fraudulent websites Tradorax, Tradervc, Kayafx, Kontofx, and Libramarkets in a number of different nations.
According to Europol, Israeli police last month made an unusual arrest in relation to a suspected €30 million ($36 million) investment scam.
During a cross-border “action day” on May 11, Europol reported that five individuals were detained in Bulgaria and one in Israel in relation to “a fraud scheme organised mainly by Israeli nationals.”
Earlier, five more individuals were taken into custody in Spain.
With assistance from law enforcement in Bulgaria, Israel, Latvia, North Macedonia, Poland, Spain, and Sweden, the German police spearheaded the operation.
The call centres operating out of North Macedonia and Bulgaria were part of the purported fraud scheme. The purported fraud operation resulted in losses of approximately €30 million for Europe.
The Times of Israel was informed by a person with knowledge of the inquiry that the suspects were in charge of the purportedly fraudulent internet trading platforms Tradorax, Tradervc, Kayafx, Kontofx, and Libramarkets. The websites allowed users to invest in cryptocurrency, CFDs, and binary options.
While TraderVC and Libramarkets used a software platform called Panda TS, Tradorax used the technology provided by Israel’s SpotOption, which was charged with fraud by the US Securities and Exchange Commission in April.
The criminal network allegedly used search engines and social media advertising to entice thousands of victims, according to Europol. Then, it is said that these victims were coerced into making investments in cryptocurrency, CFDs, or high-risk options. German authorities, however, claim that the money was just stolen by the alleged scammers and never really invested. The suspects used software that could be manipulated to show gains from their investments so that victims would be motivated to invest even more money.
Approximately twelve locations in Bulgaria, Israel, Poland, North Macedonia, and Sweden were searched, according to Europol. High-end cars, jewellery, real estate, electronics, and almost €2 million ($2.4 million) in cash were all seized by the police.
Images released by German police in Koblenz, who looked into the purported fraud ring, depict the thieves’ opulent working area.
The fraud gang members, who are between the ages of 32 and 65, are of German, Bulgarian, Israeli-Romanian, Polish, Danish, and Belgian nationalities, according to Koblenz police.
According to a source who spoke to The Times of Israel, the lone captured Israeli is a dual citizen of Romania and Israel and was taken into custody in Bulgaria.
According to documents obtained by the Times of Israel, Avi Itzcovich, an Israeli-Romanian national, was the Tradorax’s manager.
Itzcovich, along with an Israeli-Belgian named Jack Wygodski or Jacques Henri Wygodski, controlled a company called Raks Media in Sofia, Bulgaria. Tradorax posted job openings in 2015 for Israelis looking to move to Bulgaria to work in a call centre.
According to reports, Tradorax stopped operating in September 2017, just a few months after Tradorax was mentioned in an article about binary options scam published by Britain’s Independent.
The Israeli Knesset outlawed the selling of “binary options,” a type of financial instrument, in 2017. Numerous individuals who operated call centres out of Israel relocated their operations abroad and/or modified their business plan such that the scam now involved the sale of cryptocurrency, contracts for differences, or FX. The Times of Israel was recently informed by prosecutors in a European nation that although call centres for investment scams are now dispersed throughout the continent, investigators have repeatedly discovered that the service providers on scam websites are Israeli, or that the money obtained through fraud ends up in Israeli bank accounts or in the bank accounts of people who are of Israeli descent.
Although thousands of people were employed in the online fraud industry, Israeli prosecutors have indicted only a few of these individuals and stole billions of dollars.
Settlement
In the meantime, the US Securities and Exchange Commission declared on May 25 that it had achieved a settlement with Israeli father and son Gil and Raz Beserglik, as well as German national Kai Christian Petersen. The individuals were accused of being in charge of tens of millions of dollars’ worth of fraudulent activities. They had owned, controlled, and ran the binary options websites Bloombex Options, Morton Finance, and Startling Capital.
The three men decided to settle the case without acknowledging or disputing the charges made in the SEC’s complaint.
Petersen consented to pay a $100,000 civil penalty in addition to $200,296 in disgorgement and prejudgment interest. Gil Beserglik consented to pay a $300,000 civil fine in addition to $2,347,224 in disgorgement and prejudgment interest. Raz Beserglik consented to pay prejudgment interest of $2,086,421 in addition to disgorgement.
The SEC’s investigation was conducted by Jason Anthony and Deborah Maisel, and supervised by Jennifer Leete. The litigation was conducted by Ken Donnelly and Samantha Williams, and supervised by Fred Block.
