European Enforcement Action – Gal Barak, The Wolf of Sofia Arrested

Tradologic Network exposed

The Austrian, German and Bulgarian authorities have succeeded in striking a decisive blow against the vast European criminal organization operating illegal broker and money laundering schemes. FinTelegram already reported last week about the extensive police action against the ring of illegal online brokers. Over the past months, the FinTelegram team has provided the relevant authorities with the best possible information. In the end, a long and carefully prepared international police action against the illegal broker schemes could be successfully carried out. The head of this criminal organization, Gal BARAK, was arrested. Here is the first summary of this remarkable police action which we will report about in the next weeks.

European Kingpin Arrested

The Israeli citizen and so-called Wolf of Sofia, Gal Barak, was not only the beneficial owner behind the numerous illegal broker sites like SafeMarkets, Golden Markets or XtraderFX, but together with his partner Marina ANDREEVA the boss behind E&G Bulgaria. This E&G Bulgaria managed the boiler rooms and online marketing activities that left thousands of damaged investors in Europe. Furthermore, Gal BARAK was the managing director of the Bulgarian TRADOLOGIC whose software was used by many illegal broker sites.

In addition to Gal BARAK, a number of other employees and partners of this criminal organization are under investigation and have been interrogated. The organization has comprised dozens of companies in all parts of the world, the management team being primarily Israeli citizens operating from Bulgaria. The perpetrators have set a special focus in the area of binary options, CFDs and cryptocurrencies.

Insiders Supported Authorities

The enforcement action was prepared with the support of insiders that decided to depart from these schemes and instead support FinTelegram and enforcement agencies with their information. Thanks to those insiders, important information and details of the global network of people, companies, and bank accounts were uncovered.

FinTelegram, together with lawyers, accountants and public authorities, has set up the European Funds Recovery Initiative (EFRI) to assist victims in the recovery of their claims. Injured investors can file their claims on EFRI’s website. We will examine these and share them with the relevant authorities. Through EFRI’s legal representatives, the appropriate measures are taken to assert the claims against responsible persons, companies, and banks. Besides, EFRI will take care to let the victims become a private party to the criminal claims in the appropriate ways.

The role of participating banks and payment services provider is to be questioned by the authorities. Evidently, they failed to apply the required Anti-Money-Laundering (AML) and KYC procedures and thus facilitated these fraud schemes. In our opinion, the Bulgarian Investbank or the Dutch Payvision among others are to be regarded as co-conspirators of these illegal broker schemes and should be held accountable for the damages to investors.

A Global Cybercrime Organization

Besides Gal BARAK also the German citizen Uwe LENHOFF was arrested. He is currently in custody in Austria. LENHOFF was a partner of Gal BARAK and principal shareholder of the listed company VELTYCO. Through this VELTYCO, many millions of illegally received investor funds have been moved to offshore destinations in the LENHOFF environment. Among these illegal broker sites in the VELTYCO network are Option888, TradoVest or XMarkets. Besides Gery SHALON and Vladislav SMIRNOV, LENHOFF was also one of the shareholders of TRADOLOGIC. The website of VELTYCO is “under construction” since a few days.

Tradologic network and beneficial owners

GAL BARAK‘s partners also include Gery SHALON, an Israeli indicted in the U.S, and Vladislav SMIRNOV, a Russian citizen. These three people formed the head of a globally acting criminal network extending from the U.S. to Europe, Georgia, Israel, and Russia. Hundreds of millions of illegally received funds from investors were shifted via the Bulgarian Investbank. These funds ultimately ended up via the Investbank with the offshore companies of the participating Gal BARAK, Vladislav SMIRNOV, Gery SHALON, and his family. The team called themselves a family.

Attempt To Bribe FinTelegram

Recently Gal BARAK, Vladislav SMIRNOV, and Gery SHALON tried to bribe the managing director of FinTelegram to avoid further reports on these schemes. In an action coordinated with the authorities, additional evidence was obtained on this attempted bribery. Conversations and communications that took place and were recorded and part of the criminal case.

Gal BARAK, Vladislav SMIRNOV and Gery SHALONhave also run some fake sites where false information has been spread. The aim was to systematically direct the suspicion towards other persons over the last months and to damage the reputation of FinTelegram.

If you have a claim against any of the illegal broker sites, you can file it through EFRI’s website.