Introduction
The extensive financial losses suffered by retail investors through illicit online broker schemes have been significantly enabled by certain payment service providers (PSPs). These entities, alongside deceptive call centers, are pivotal in the orchestration of such fraudulent activities. Recent investigations have spotlighted two such PSPs—Germanika GmbH and Transact Europe EAD—revealing their involvement in these schemes.
Transact Europe EAD: A Bulgarian PSP Under Scrutiny
Transact Europe EAD, based in Bulgaria, has been identified as a key player in processing substantial sums from investors involved in illegal broker operations, notably those associated with E&G Bulgaria and Gal Barak. These transactions were allegedly laundered and redirected to the scheme operators.
The company operates as a subsidiary of Transact Europe Holding, also registered in Bulgaria. Notably, Falk-Uwe Preussner, a German national and significant shareholder in Uwe Lenhoff’s Veltyco Group, holds nearly 30% of Transact Europe Holding. His partners, Israeli-born U.S. citizens Yehuda Avganim and Avi Chesed, also possess substantial shares and are linked to CardConcept Europe Limited, a payment services company associated with the platform www.processing.com, which was prominent in the binary options industry.
This intricate network suggests a U.S.-German collaboration operating from Sofia, Bulgaria, with direct ties to the fraudulent activities of Lenhoff, Barak, and their associated entities.
Germanika GmbH: Unauthorized Financial Operations in Germany
In June 2018, the German Federal Financial Supervisory Authority (BaFin) ordered Germanika GmbH, headquartered in Cologne, to cease its unauthorized financial transfer operations. The company had been offering international money transfer solutions without the necessary BaFin authorization, channeling investor funds to operators of fraudulent broker schemes.
Germanika GmbH’s managing director, Ivonda Skotele, a Lithuanian citizen, is also registered as a director and shareholder of Capital Process Ltd in the UK. The company’s activities included collecting customer funds from illegal platforms operated by E&G Bulgaria, managed by Gal Barak and Marina Andreeva. Additionally, Germanika GmbH facilitated transactions for other illicit broker sites like www.forexgrand.com, operated by Bulgarian entity Nordic Pearl Ltd, which is linked to Grand Services Ltd in the Marshall Islands. This pattern mirrors the operational structure of E&G Bulgaria’s fraudulent schemes.
Conclusion
The involvement of Germanika GmbH and Transact Europe EAD in facilitating financial transactions for illegal broker schemes underscores the critical role certain PSPs play in enabling financial fraud. Their operations highlight the need for stringent regulatory oversight and the importance of thorough due diligence in the financial services sector to protect investors from such deceptive practices.