Large-scale fraud and money laundering via cryptocurrency
When police stopped a driver for using a mobile phone while driving, they unexpectedly discovered tens of thousands of euros in cash inside the vehicle. This triggered preparations for a criminal investigation, and the investigation service submitted an information request to FIU-the Netherlands.
One of our analysts searched the database of unusual transaction reports and identified several that were linked to the individual in question.
The reports originated from banks, providers of crypto asset services and casinos. Banks had noticed that exceptionally large sums were regularly being deposited into the individual’s account and promptly spent. A casino reported that the same customer was gambling with unusually high amounts, using notes of 100 euros or higher. Meanwhile, providers of crypto asset services flagged the person due to large-scale purchases of digital currencies.
“The individual invested in cryptocurrency on behalf of others, but did not have the required licence.”
No licence
The FIU’s analysis revealed that third parties were transferring money to the individual to invest in cryptocurrencies. According to data from the Dutch Chamber of Commerce and other public sources, he was running a crypto-related business. Our analyst explains: “On his website, he encouraged others to entrust him with their money, promising to grow their investments through cryptocurrency trading. But further analysis revealed that he didn’t hold the required licence. Anyone managing crypto investments on behalf of others must be licensed, to prove they are under regulatory supervision and can be trusted.”
Luxury car and gambling
The analysis confirmed that part of the received money was indeed used to invest in cryptocurrencies.
“But at the same time, a significant portion was spent on personal expenses including the purchase of a luxury car. He was also found to be gambling online with the funds that had been entrusted to him by others.”
“Much of the invested money was used for personal expenses, such as luxury items.”
Reports kept coming in
As the analysis progressed, reports of unusual transactions continued to come in.
“There was a recurring suspicion of fraud. The overall picture that emerged was that he likely speculated on cryptocurrency price increases, skimming off part of the profits and using that money for personal gain.”
Conviction
The case was officially classified as suspicious and handed over to the investigation services. The individual has since been convicted in a first instance ruling for large-scale cryptocurrency fraud and money laundering. Investigators also found that he transferred funds to family members and acquaintances. Actions which, according to the court, contributed to laundering his victims’ money.