Financial Crime: Austrian Police Reported Massive Blow Against Illegal Broker Schemes

The Austrian police announced a successful European enforcement action against illegal broker schemes operated by the Israeli Gal Barak and his E&G Bulgaria. Gal Barak is a partner of the international cybercrime organization around the Israeli Gery Shalon and the Russian Vladislav Smirnov. U.S. authorities have filed an indictment against Gery Shalon and his co-conspirators in 2015 already. With the European enforcement action, another massive blow against this cybercrime organization has been struck.

Huge Success For Investor Protection

It started as a mission impossible for the police teams in Austria and Germany. Even though we live in the EU it’s not that easy to coordinate enforcement actions against cybercrime perpetrators and their organization across different member states. The mission becomes almost impossible when the main perpetrators are Israeli citizens. But finally, the mission became a success because of passionately working and dedicated police guys in the Austrian Federal Crime Agency (Bundeskriminalamt BKA). And some humble contributions of FinTelegram.

Since September 2017, experts from financial investigations offices in Austria, Germany, Czech and Bulgaria under the lead of the Austrian police have been investigating the international cybercrime organization around Gal Barak and his E&G Bulgaria. This network is accused of having damaged several thousand retail investors across Europe for around 100 million euros per year through illegal online trading platforms. Gal Barak, one of the prime suspects has been arrested. It was a massive blow against the perhaps largest cybercrime organization in Europe if not worldwide.

The Austrian Home Secretary Herbert Kickl congratulated the Austrian investigators and their colleagues from Bulgaria, Germany and the Czech Republic at the Federal Criminal Police Office:

“This successful action is an important blow against cybercrime, where perpetrators have access to the latest digital technology. All the higher is the performance of the investigators, who, with meticulous work and thanks to the international exchange of information, have made group-like criminal structures visible and smashed up”.

Herbert Kickl, Austrian Home Secretary

The Investigations

The Austrian police had tracked down the group of perpetrators in close cooperation with their colleagues in Germany, Czech, and Bulgaria. Following intensive investigations and international exchange of information, an initial intervention was planned in consultation with Germany. This part of the group includes the operation of the trading platforms XTraderFX, Optionstars, OptionstarsGlobal, Golden Markets, SafeMarkets, Cryptopoint, and some other brands. According to the available information, these platforms attracted at least EUR 66 million from investors, of which about eleven million from retail investors in Germany and Austria. However, it is assumed that these sums will increase many times over after a precise evaluation of the data seized. National and European orders for house searches, seizures and arrests were issued by the public prosecutor’s offices.

Enforcement Action Achievements

The European investigation orders were carried out by the Bulgarian authorities in Sofia from 28 January 2019 to 1 February 2019 with the support of the investigators and IT forensic experts of the German and Austrian police. Several terabytes of data, business records and a six-digit amount of money were seized. The premises of a total of 21 companies and four private addresses of suspects were searched. In addition, a total of 14 accounts were seized and a prime suspect arrested. The prime suspect Gal Barak is in extradition custody in Bulgaria.