A joint operation involving national authorities from Austria, Cyprus, and the Czech Republic led to the arrest of six individuals in connection with an online scam related to the sale of rights for a new cryptocurrency. The coordinated action, which was supported by Eurojust and Europol, resulted in the seizure and freezing of assets totaling €2 million. The scammers had posed as operators of a legitimate online trading company and offered 10 million tokens for a new currency for sale, accepting payments in established cryptocurrencies. However, in February 2018, the perpetrators closed all their social media accounts, executed an exit scam, and exposed the fact that investors had been deceived, resulting in estimated losses of around €6 million.
Eurojust played a crucial role in supporting the operation against the online scam by establishing a coordination center to facilitate communication among the participating authorities, enabling the swift execution of European Arrest Warrants and search warrants. Europol also contributed to the operation by deploying a mobile office in Cyprus and organizing operational meetings. Additionally, they worked closely with the Austrian desk at Eurojust to provide a comprehensive analysis of the investigation. Not all victims of the fraud have been identified at this stage, and efforts are ongoing to bring justice to those affected by the scam.
In another incident, Instagram influencer Jebara Igbara, known as “Jay Mazini,” has been sentenced to seven years in prison for orchestrating a multi-million dollar crypto Ponzi scheme. The 28-year-old from New Jersey pleaded guilty to fraud charges, admitting to running a Ponzi scheme involving cryptocurrency fraud that resulted in approximately $8 million in illicit gains. The money was used to fund an extravagant lifestyle, including luxury cars and excessive gambling. This case serves as a cautionary tale about the risks associated with investing in cryptocurrency and the importance of conducting due diligence before getting involved in any financial scheme.
More recently, Queensland Police took action against an alleged crypto investment fraud operating on the Gold Coast, resulting in the arrest and charging of four individuals. The investigation, led by the Financial and Cyber Crime Group Money Laundering Unit, began in July 2022, focusing on companies suspected of engaging in fraud and money laundering activities. The first quarter of this year has seen $336 million lost to Web3 hackers and fraud, with nearly half of the capital stolen in January alone. This highlights the ongoing challenges faced by law enforcement in combating financial crimes in the cryptocurrency space and the need for increased vigilance among investors to protect themselves from fraudulent schemes.
Overall, the joint operation involving national authorities from Austria, Cyprus, and the Czech Republic, supported by Eurojust and Europol, resulted in the successful arrest of individuals involved in an online scam related to a new cryptocurrency. The investigation uncovered a fraudulent scheme where scammers posed as legitimate traders, offering tokens for sale and ultimately executing an exit scam that resulted in significant losses for investors. Additionally, the sentencing of Instagram influencer Jay Mazini for his involvement in a crypto Ponzi scheme serves as a stark reminder of the risks associated with investing in cryptocurrency. The ongoing efforts by law enforcement to combat crypto-related fraud and money laundering highlight the need for increased awareness and due diligence in the digital asset space to protect against financial crimes and scams.
