International authorities have dismantled a sophisticated fraud operation that stole more than €3 million from over 100 victims through a fabricated online investment scheme. Further investigation revealed the organization’s connections to broader criminal activities involving human trafficking and drug operations, with financial movements exceeding $21 million.

Spanish-German Probe Halts $21 Million Underground “Mafia Crypto Bank”

The multi-country operation, spearheaded by German prosecutors with significant Spanish police involvement, culminated in coordinated searches across Albania, Cyprus, and Israel, with one suspect arrested in Cyprus pending potential extradition to Germany.

The criminal network operated through two distinct branches: an Arab-origin group responsible for receiving money worldwide and a Chinese-origin network that facilitated cash delivery in Spain, receiving compensation through cryptocurrency transactions.

This structure enabled the organization to operate as an underground banking system using the hawala method, which allows money transfers outside the conventional banking system. One media outlet described the operations as a “mafia crypto bank.”

In Spain alone, authorities conducted 13 searches and arrested 17 members of the organization. The operation yielded substantial assets: €205,000 in cash, more than €183,000 in cryptocurrency, 18 vehicles valued at over €207,000, and numerous encrypted electronic devices. Authorities also froze 10 properties worth more than €2.5 million, luxury handbags valued at €230,000, and high-end cigars worth over €622,000.

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Europol Coordinates Takedown of Cross-Border Financial Crime Syndicate

The investigation into the investment fraud began after a German married couple reported being victimized by the scheme. Perpetrators posed as financial brokers, initially encouraging victims to make small deposits before systematically manipulating them into transferring substantially larger amounts, showing fake profit charts to create the illusion of successful investments.

Spanish authorities indicated that over a three-month period, they documented 32 operations worth more than €5.5 million. However, through one of the organization’s financial routing addresses used solely to receive and transfer funds, investigators tracked over $21 million in transactions between June 2022 and September 2024.

The January operation in Spain involved more than 250 officers coordinated through a command center in Almería, where the investigating court could monitor all searches in real-time. Of the 17 people arrested in Spain, 15 have been remanded to prison on suspicion of money laundering and membership in a criminal organization.

Two-Year Investigation

The broader international effort involved coordination between law enforcement agencies from Germany, Cyprus, Albania, the United Kingdom, and Israel, with Europol providing operational support and Eurojust facilitating cross-border legal cooperation.

The operation comes amid growing concerns from Europol about the role of cryptocurrencies in facilitating criminal activities. In its latest Internet Organised Crime Threat Assessment report, the agency highlighted how digital assets and artificial intelligence are increasingly being leveraged by criminal networks.

“Cybercriminals are keen to leverage Artificial Intelligence, which is already becoming a common component in their toolbox,” noted Catherine De Bolle, Europol’s Executive Director.

Officials indicated that the investigation remains active, with further actions expected as authorities continue to trace the network’s operations and potentially recover additional assets.

This article was written by Damian Chmiel at www.financemagnates.com.RegulationRead More

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