Major Fraud Trial Unfolds in France: A Closer Look at Crypto and Diamond Scam
A significant fraud trial has commenced in France, involving allegations linked to crypto and diamond investments. Over 20 defendants are being prosecuted for deceiving around 1,300 victims, including several prominent football clubs.
Details of the Fraud Scheme
Reports from local media reveal that the trial commenced on October 21 in a conference center in Nancy, eastern France, due to the high number of plaintiffs involved. The accused are alleged to have executed a sophisticated scam between 2016 and 2018, leading to losses of approximately €28 million (around $30 million). They created deceptive websites that promoted investment opportunities in diamonds and cryptocurrencies, attracting investors with enticing offers of substantial annual returns. One victim, for instance, lost €400,000 by investing in what was labeled a “diamond savings plan.”
Impact on Football Clubs
As reported by Barron’s, the fraudulent schemes not only targeted individual investors but also ensnared a dozen professional football clubs. The defendants reportedly impersonated player agents, notifying clubs of changes in banking details. This manipulation led clubs to redirect player salaries to new accounts controlled by the fraudsters, with clubs such as Sochaux, Angers, and Toulouse suffering a collective loss of about €60,000.
Operational Scale and Legal Proceedings
The operation’s scale was extensive, with 199 bank accounts opened across 19 countries to facilitate the movement of funds. Approximately 850 victims are represented in the trial, many of whom invested a substantial portion of their savings or even took out loans for these purported investment opportunities. This case has been labeled “red card” due to the involvement of football clubs among the plaintiffs.
Methods Employed by Fraudsters
The European Union Agency for Criminal Justice Cooperation reported that the fraudsters utilized sophisticated tactics to execute their scheme. They approached victims under the pretense of investing in businesses, building rapport, and convincing them to set up crypto wallets. Once established, the suspects allegedly made off with the funds, utilizing the nature of cryptocurrency to facilitate fast and hard-to-trace transactions across borders. This complexity has posed challenges for authorities aiming to track the flow of illicit funds.
Current Status and Recovery Efforts
The trial is expected to last four weeks, with 22 defendants facing serious charges ranging from criminal conspiracy to gang-related fraud. Among them, approximately 12 individuals are accused of allowing their identities to be used to open bank accounts for transferring funds. Others face charges related to creating fraudulent websites or acquiring counterfeit diamonds, while three defendants remain at large and are being tried in absentia.
Authorities have managed to recover €2.8 million, which may potentially serve as compensation for the victims. The Colman law firm, representing about 100 plaintiffs, emphasized that the trial represents a decisive stance against international financial fraud. Victims of this scheme come from several countries, illustrating the transnational nature of the fraud and the significant hurdles faced in addressing such crimes.
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