Spanish National Police reported on 15th July 2015, that they had broken up a criminal organization allegedly specializing in committing massive fraud through “pyramid schemes”. The group had obtained more than 50 million euros through scams from 50,000 people, 6,000 of them located in Spain. After more than year and a half of investigation, agents were able to confirm the existence a company that enticed its victims through publicity events, such as as events in luxury hotels, promotional videos or training talks and offered them extra income quickly inserting ads in their company network. Money that was developed by the company included invented virtual currency, with no value, and thus it was impossible for investors to recoup their investments.
Investigation by the National Police began a little over a year and a half ago thanks to a complaint by a former employee of the company, which was presented at the Interior Attaché in Bolivia. Following an investigation from the complaints filed in different parts of Spain by Police experts in financial fraud and money laundering, this led to 20 arrests, two in Madrid, one in Valencia, two in the province of Malaga, eight in the province of Seville, a person in Langreo, two in the province of Alicante and four in Arrecife (Las Palmas). In addition, 18 computers: laptops, hard drives, CPUs and tablets;numerous documents related to fraud and money laundering; 15,505 euros and two luxury cars have been seized.
In parallel, a bank account in Latvia has been blocked with more than 5 million and nearly 22 million US dollars, Canadian dollars 2,600; £1,600 pounds and AU$ 365 has been identified in the scam
Victims captured in talks and publicity events in hotels
The members of this organization had created a wide network of clients / victims who had been enticed through numerous promotional events, such as major events in luxury hotels with all expenses paid, promotional videos or training talks. The goal was to attract people with promises to supplement their income by achieving the highest number of new clients in the shortest time possible.
These revenues arose from the purchase of the packs that the company offered, and would receive income quickly by simply inserting a series of company announcements on the network. The packs offered a very big payoff, for example, with an investment of 18,000 thousand dollars one could achieve annual incomes of $ 67,600.
Given this high profitability, the victims did not hesitate to invest in the company, persuading both to friends and family to do the same.
A false virtual currency
Subsequently, the company decides to convert all the money that victims had accumulated in their back-office accounts originally in US dollars into a virtual currency invented by the company.
This new currency had no value so that victims found their dollars have been transformed into something useless, without any chance to recovery.
That original income received by the company was placed in different accounts located in countries classified as tax havens or countries with large tax benefits. The final volume of fraud could amount to some 50 million euros, a toll that could range around 50,000 people worldwide.
The operation was conducted jointly by the Money Laundering Group of Police Headquarters Western Andalusia and specialized agents of the Central UDEF of the General Commissariat of the Judicial Police attached to the Executive Service for the Prevention of Money Laundering (SEPBLAC) ; in collaboration with police Headquarters in eastern Andalusia, Valencia, Asturias and the Canary Islands; and police stations in Alicante, Velez-Malaga, Fuengirola, Elche, Denia, Arrecife and Langreo.
The research, led from the start by the Court of Instruction number sixteen of Seville, it has been directed by the Central Court of Instruction No. 3 of the National Court.