Europol has supported a large-scale operation led by Italian and Portuguese authorities against two networks of money-mule recruiters working for a criminal organisation carrying out cryptocurrency scams. Law enforcement from Austria, France, Germany, Romania, Spain and Switzerland were also involved in the investigation, as well as Eurojust.
A series of raids were carried out on 21 and 27 May in France, Italy and Romania. They resulted in 11 detentions, including the mastermind behind the money laundering scheme. Law enforcement authorities also carried out 15 house searches and seized several electronic devices, jewellery and cryptocurrencies.
The organised crime group under investigation carried out classic ‘rip-deal’ scams, targeting millionaires looking to invest or sell properties. Investigators uncovered how the criminals outsourced the money laundering to two other criminal networks. These networks recruited money mules – people who receive money from a third party in their bank account and transfer it to another account or withdraw it in cash, giving it to someone else in exchange for a commission. Europol warned of this trend in its report Decoding the EU’s most threatening criminal networks.
In this case, the main perpetrators of the scam lacked the technical expertise to launder their profits, which exceeded EUR 10 million. That is why they delegated part of the criminal process to external service providers. This crime-as-a-service business model further increased their threat, as all their needs could be met by other criminal actors through financial exchange.
An elusive labyrinth
Law enforcement authorities investigated the case for two years, as the criminal scheme was complex and challenging for investigators to unravel. The main criminals running the scam were members of families originally from the Balkans, although most of them were based in France.
However, the crypto-tracing analysis performed by the investigators and supported by Europol revealed that two money-laundering rings, involving multiple nationalities and geographical locations to try to hide from law enforcement, were linked to the main group of criminals.
The investigation revealed that criminals were running a rip deal scam. In this scam, a suspect lures a victim interested in investing or selling property by pretending to belong to an international investment fund, builds trust and carries out the deception at the time of payment. This time, however, they used cryptocurrencies and different apps to accomplish the scam.
The criminals contacted the victims, scheduled an appointment at luxury restaurants or hotels, and instructed them to download applications to manage cryptocurrencies. As soon as the victims installed the app, the criminals used sophisticated technical tools to take control of the crypto wallets. It was only when the payments were made using these applications that the victims realised that all their funds had disappeared from their crypto wallets.
As the criminals were targeting millionaires and generating huge profits from their activities, investigators were led down a completely new path – that of the money mules.
European coordination
During the investigation, Europol provided analytical support to law enforcement authorities by disseminating analytical reports and carrying out crypto tracing for the investigators in the field to help advance the investigations. The agency also brought together the investigators to establish an intelligence picture and prepare the action days.
A team of Europol experts was deployed in Italy to facilitate the exchange of information between the countries involved in the investigation and to provide ongoing forensic support on the spot.
Eurojust supported the investigation by enabling cooperation between the judicial authorities involved in the operation. The coordination meetings at Eurojust helped the authorities to exchange information and prepare for the Action Day. Additionally, Eurojust supported the execution of European Investigation Orders, European Arrest Warrants, and freezing orders.
Money-mule prevention campaign
Europol developed the #DontBeaMule prevention campaign to raise awareness about the use of money mules. The campaign is available in all EU languages and informs the public about how money mules operate, who the most targeted individuals are and how to recognise the warning signs.
Law enforcement authorities involved in the investigation:
- France: French National Police (Police Nationale);
- Germany: Federal Criminal Police Office (Bundeskriminalamt) and Hessian Police (Hessische Polizei);
- Italy: Italian National Police (Polizia di Stato);
- Portugal: Portuguese Criminal Investigation Police (Polícia Judiciária);
- Romania: Romanian Police (Poliția Română);
- Spain: Spanish Guardia Civil (Guardia Civil), Spanish National Police (Policía Nacional);
- Switzerland: Federal Office of Police (fedpol), Zürich City Police (Stadtpolizei Zürich).
