Interesting German-Lithuanian Compliance Dispute about Wirecard and fintech regulation
The spot is on Lithuania! The Financial Times reported that German prosecutors suspect that more than €100M was stolen from Wirecard via the licensed Lithuanian Finolita Unio. Via this fintech, at least €35M was said to have flowed to fugitive ex-Wirecard executive Jan Marsalek and another €65M to the now insolvent company oCap (previously Senjo Trading) in Singapore. Both Finolita Unio and oCap are part of the Senjo Group, one of Wirecard's most important partners in Asia, and received a loan of €350M from the latter. Finolita Unio CEO Danas Oliskevicius rejects the accusations and blames the German BaFin.
Wirecard, Finolita Unio, and the Lithuanian Connection
In our researches on scam-facilitating payment processors, Finolita Unio UAB, regulated by the Bank of Lithuania with authorization code LB000490, came to our attention only once as a payment facilitator in the GlobalSpotFX scam with the Estonian Woodstock OÜ (report here). The Financial Times reports that Finolita Unio is part of Senjo Group, a former Wirecard partner through which hundreds of millions have flowed and vanished. More than €100M have been processed through its Lithuanian subsidiary.
GNI Leaks – Introducing high-risk payment processor group EMP CORP
FinTech entrepreneur Ozan Ozerk is a remarkable man. Hee has spent the last 10 years building a FinTech empire around Akce Group that ranges from the Lithuanian-registered European Merchant Bank to the FCA-regulated OpenPayd Group. He has also established processing gift card and voucher companies to process payment transactions of gambling, betting, lotteries, and online casinos for EMP CORP. We have started with the research of EMP CORP. Here is the first part of our reports.
European Compliance Mess – A challenging week for BaFin and MFSA
BaFin's President Felix Hufeld and Vice President Elisabeth Roegele had to resign because of the Wirecard scandal. Germany's Finance Minister Olaf Scholz wants to make a fresh start. In Malta, former CEO Joe Cuschieri and his longtime confidant and MFSA General Counsel Edwina Licari are involved in compliance issues. They have let themselves be invited to Las Vegas by Yorgen Fenech. Fenech is said to be the mastermind behind the murder of investigative blogger Daphne Caruana Galizia and suspected of bribing members of the former Maltese government.
Follow the Money – Cartu Brothers, Wirecard and GlobalNetInt
GlobalNetInt has for sure no issue with the online gambling business. Gambling is by far their most important high-risk client segment, our sources say.. And then there are the Cartu Brothers. Law enforcement agencies and financial market regulators have been after them for years now. The U.S. CFTC and the Canadian OSC have sued David Cartu, Joshua Cartu and Jonathan Cartu for alleged binary options fraud. They ask for money! The CFTC claims damages of $165M in the process. We learned that the Cartu Brothers companies have their accounts at the Lithuanian GlobalNetInt.
Check this out – German PPRO Group gets $180M at $1B+ valuation
Germany has a new FinTech. FCA-regulated PPRO Financial is controlled by the German PPRO Holding GmbH and has affiliated companies in Europe, Asia, North and South America. Today, the company announced that it had received a total of $180 million in fresh money from investors based on a valuation of more than $1 billion. With this, PPRO joins the club of FinTech unicorns. However, in the past, PPRO has also attracted attention for supporting broker scams with its payment services.
Porn Baron Hamid “Ray” Akhavan arrested again for violation of pretrial release
January 7, 2020, was a productive day in the U.S. SDNY District Court. Russian hacker Andrei Tyurin was sentenced to 12 years in prison as an accomplice to Israeli cybercrime supervillain Gery Shalon, who was also charged. He had previously pleaded guilty. In parallel, Hamid "Ray" Akhavan and his German partner Ruben Wiegand, charged with money laundering and bank fraud, had a trial. Akhavan was rearrested for violating pretrial release conditions.
PXP Financial and MoneyNetInt cooperate for cross-border payments
Regulated by the FCA with reference No 504318, PXP Financial Limited as an Authorized Payment Institution was originally founded as Kalixa Accept Limited by Austria's Bwin. Following the acquisition of Bwin by public-listed GVC Holdings PLC, Kalixa was sold to Senjo Group for €29 million in late 2019 and renamed PXP Financial. The company recently announced its cooperation with FCA-regulated MoneyNetInt Group. Senjo Group was one of the largest - and, according to the Financial Times (FT), most opaque - partners of the collapsed Wirecard.
BaFin employee fired for conspicious Wirecard speculations
The collapse of the listed German FinTech miracle Wirecard is still making high political waves. The regulator BaFin is at the center of criticism for not acting properly in this affair. The Wirecard fraud took place under the sleepy regulatory eyes of BaFin employees. Some employees actually used the Wirecard crisis and possibly insider information to speculate privately with its shares. At least four BaFin employees have been exposed as Wirecard speculators; one of them was fired as of November 30.
Money-laundering complaint filed against Deutsche Handelsbank and PPRO Group
EFRI has filed several crucial money-laundering complaints against banks and payment processors with the competent authorities in various jurisdictions. Without the intentional or negligent facilitation of these institutions, investment fraud by scammers would not be possible in the first place. EFRI has now filed a money laundering complaint against Deutsche Handelsbank and the PPRO Group along with extensive evidence.