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The EFRI Mission – Involving Regulators and Prosecutors to Recover Funds for Defrauded Investors

Last updated on June 18, 2020

The European Funds Recovery Initiative (EFRI), co-founded by FinTelegram, is specialized in the recovery of funds of investors who have been defrauded by investment scams. Furthermore, EFRI sees itself as an advocate for investors and investor protection. Currently, EFRI has been granted a Power of Attorney by more than 800 victims which have been defrauded of more than EUR 34 million. The approach applied by EFRI differs in several aspects from the activities of lawyers and other organizations in the recovery business. Also because EFRI is organized as an initiative and association of victims.

EFRI establishes big datapools

On the one hand EFRI (www.efri.io) organizes the fund recovery process more like a membership model, by setting up separate social media groups for victims of the different scams and by guiding the victims what authorities and how to approach them after having discovered that they have been defrauded. EFRI requests all victims to file criminal complaints themselves with the authorities at their place of residence and to be persistent to the authorities in following up their criminal complaints.

EFRI requests all victims to deliver their deposit information for the transfers made to the fraudsters. In addition EFRI wants to get all information on the fraudulent systems which have been collected by the victims.

Based on the documentation provided EFRI establishes data pools for each scam with the illegal and legal payment service providers and banks involved. In case of credit card or debit card payments EFRI tries to identify the acquiring organization which processed the payments for the fraudsters.

Money Laundering complaints against European banks and payment service providers

Based on these databases EFRI prepares money-laundering complaints against the involved banks and legal and illegal payment service providers.

Up to now, money-laundering complaints with a total volume of more than €15 million have already been filed. EFRI filed money laundering complaints for German banks and payment service providers like Wirecard, or Deutsche Bank/POSTBANK. Additionally, money-laundering complaints against KBH Andelskasse, Moorwand, and UPCConsulting have been filed with the respective regulators and public prosecuting offices. We guess BaFin or FCA, for example, knows EFRI´s letters by now quite well and feel already uncomfortable by recognizing EFRI´s letterhead.

More often than not, even regulated payment processors such as Wirecard, Payvision, or Deutsche Bank did not terminate their business relations with the scammers, although many public investor warnings have already been issued by the financial market supervisory authorities in various jurisdictions.

In addition, many unauthorized and illegal payment processors such as B2G, Xtrabit, P2P, Hermes Solution, IntellEstate Bau, and many more have made themselves available for fraud processing in exchange for fat fees. These too must be held accountable and are also responsible for the losses of retail investors.

We are convinced that the involvement of the competent authorities in the fund recovery process is ultimately beneficial both for aggrieved retail investors and for the security of the online investment scene. The European payment processors must understand that they will be held accountable for their involvement in any scams. We are convinced that this is the only method to stop this kind of fraud in Europe.

Elfriede Sixt, EFRI principal

Support European prosecutors with data

Based on the information from the victims about the fraud itself EFRI files criminal complaints against fraudsters identified as EFRI filed one in Denmark, several in Great Britain and in Israel. In addition, EFRI pushes prosecutors in the different European countries to start investigations by delivering all collected information on criminal complaints in the other European countries (to help them in exchanging information) and deliver out database about the fraud.

It is certainly not the fast lane but a rather holistic approach that but hopefully will not only result in the recovery of funds but also in the punishment of dishonest actors. In any case, this approach also documents the state of the financial scene for the authorities involved and leads the black sheep to be checked and punished. Justice for the defrauded retail investors.

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