A joint investigation supported by Europol has led to the dismantling of a Franco-Israeli criminal network involved in large-scale CEO fraud.
The five-day operation, led by France, resulted in eight house searches in France and Israel, the arrest of the main suspect in Israel and eight arrests (six in France and two in Israel).
Europol made a number of seizures including electronic equipment and vehicles, about $3.2 million from Portuguese bank accounts, $3.3 million from Hungarian bank accounts, $640,000 from Croatian bank accounts, $428.000 from Spanish bank accounts, $375,000 in virtual currencies.
The total value of the seizures is estimated at almost $6 million
The criminal network, comprised of French and Israeli nationals, targeted companies located in France.
In early December 2021, one of the suspects impersonated the CEO of a company specialised in metallurgy, based in the department of Haute-Marne in north-eastern France.
The fraudster asked the company’s accountant to make an urgent and confidential transfer of $418,000 to a bank in Hungary. The fraud was discovered a few days later when the accountant, thinking he was acting on behalf of the company’s CEO, attempted to make a transfer of $536,000.
The company filed a complaint, and the investigators subsequently found that the call from the alleged CEO came from a number in Israel.
In late December 2021, a real estate developer based in Paris also felt victim to fraud with a similar modus operandi. The damages were much more significant in this case, however. To perpetrate the fraud, the suspects impersonated lawyers, saying they worked for a well-known French accounting company. After gaining the victim’s trust, the fraudster requested a large, urgent and confidential transfer. Pretending to be consultants, they persuaded the Chief Financial Officer (CFO) to transfer millions of euros abroad. In total, they defrauded the company of more than $40 million in a matter of days.
Using a pre-existing money laundering scheme, these funds were quickly transferred to different European countries, then to China and finally to Israel.
A link between these two scams was established in January 2022 when the Parisian real estate company filed a complaint. The information exchange and international cooperation facilitated by Europol led to the discovery of accomplices, modi operandi and funds. The criminal investigation in Croatia contributed to the discovery of the real identity of the money mules used by the criminal network. The competent authorities in Croatia blocked and froze over $643,000 in several bank accounts.
The Portuguese investigation led to the seizure of approximately $3.2 million held in multiple bank accounts.
The Hungarian authorities discovered that more than $7.5 million had been received in Hungarian bank accounts before being withdrawn in cash or transferred to bank accounts in other countries. The Hungarian authorities interrogated 16 individuals, two of whom had been arrested previously and are currently under criminal supervision. They seized more than $1 million in several bank accounts.
Since January 2022, Europol has facilitated the exchange of information and provided specialized analytical support, including financial and cryptocurrency analysis and expertise. The analysis led to the identification of links between countries to enable the urgent seizure of criminal assets before the suspects could launder them.
On the action days, Europol deployed experts to France, Hungary and Israel to cross-check operational information against Europol’s databases in real-time and provide forensic support on the ground.
