German Handelsblatt report – Wirecard involvement in Option888 binary options fraud

Handelsblatt Wirecard and Option888 and Uwe Lenhoff

Felix Holtermann from the German Handelsblatt today reported on the German Fintech star and DAX member Wirecard and its connections with binary options scams. The report also covers the traces to the criminal case surrounding Uwe Lenhoff and his offshore company Altair Entertainment N.V. Lenhoff was arrested in February 2019 after many complaints from harmed retail investors and investor protection associations on the legal ground of months of intense investigations by various authorities in different EU countries. Lenhoff and has since been detained in Austria (read FinTelegram report). His partner, the Israeli Gal Barak, was also arrested in Sofia in Feb 2019, but released into house arrest in his apartment in Sofia.

Uwe Lenhoff has operated many illegal and fraudulent binary options sites such as Option888, Xmarkets, or TradoVest through his offshore companies such as Altair Entertainment N.V. Capital Force Ltd or Celestial Trading Ltd. Against Option888 and the other platforms from Lenhoff and Altair Entertainment, there have been a number of investor warnings from financial market regulators in different jurisdictions. Including German BaFin, Austrian FMA, Italian CONSOB, or UK FCA. Just to mention a view. Hence, the illegal nature of Lenhoff’s business has been public knowledge for years and should have been recognized in any proper KYC and AML check.

Despite the obvious illegality of the business operations, the German Wirecard has accepted Altair Entertainment as a customer and thus made fraud against small investors possible in the first place. The Handelsblatt report by Felix Holtermann provides a detailed account of some payment processes of aggrieved small investors:

The recipient was always the same: Altair Entertainment N.V., based in 0000 Willemstad, Curaçao, Caribbean. The account-holding office also appears from the transfer vouchers: “Wirecard Bank, Einsteinring 35, DE-85609 Aschheim”.

Felix Holdermann in the Handelsblatt report (translated by FinTelegram).

The attempt by the authorities to freeze money on the Wirecard account after all after the large-scale fraud had come up failed. Wirecard informed the public prosecutor’s office in Munich: “The account was opened on 10.06.2014 and closed on 02.12.2016“. Funds of the defrauded retail investors were clearly no longer available, which can surprise no one who knows the patterns of the binary options industry and its scammers.

We are dealing with a large number of cases and accounts through which transactions have been processed (…) We have requested several payment service providers to disclose account transactions, including Wirecard Bank.”

Victoria Haenel, German prosecutor in charge of the case

It should be noted that Lenhoff and its Altair Entertainment also maintained good business relations with other registered payment processors such as Payvision. According to the researches of FinTelegram and the European Fund Recovery Initiative (EFRI), dozens of other scam brokers have also used these two reputable financial institutions to steal money from retail investors. Lenhoff personally arranged this and, for example, orchestrated the payment process with Payvision boss Rudolf Booker (here his LinkedIn profile). Booker was obviously aware that he and the Payvision he managed were involved in a fraud system around binary options and broker scams.

It will be for the competent authorities to determine the level of involvement of these institutions and their responsibilities towards retail investors. Neither Wirecard nor Payvision are currently being recorded as defendants in the various criminal proceedings within the EU.

“There’s a problem with payment service providers. With them, the legal and the illegal become intertwined. It’s easier said than done to arrest those responsible for money flows.”

Involved Prosecutor (Source: Handelsblatt)

However, the fact is that binary options fraud at Wirecard, Payvision and other financial services providers has contributed significantly to their incredible growth. The increase in the companies value (shareholder value) was paid also by the aggrieved retail investors from broker scams such as Option888, XTraderFX or SafeMarkets.