A joint investigation supported by Europol has led to the dismantling of a Franco-Israeli criminal network involved in large-scale CEO fraud.
The operation, led by France, involved the Croatian National Police (Hrvatska Policija), the Croatian Anti Money Laundering Office (Ured za sprječavanje pranja novca), the French National Police (Police Nationale), the French Gendarmerie (Gendarmerie Nationale), the Hungarian Budapest Metropolitan Police (Budapesti Rendőr-főkapitányság), the Israel Police (משטרת ישראל), the Portuguese Judicial Police (Policia Judiciaria) and the Spanish National Police (Policía National).
The operational activities resulted in five action days, which took place between January 2022 and January 2023 in France and Israel.
The five action days resulted in:
- 8 house searches in France and Israel
- The arrest of the main organizer in Israel
- 8 suspects were arrested (6 in France and 2 in Israel)
- Seizures include: electronic equipment and vehicles, about EUR 3 million from Portuguese bank accounts, EUR 1.1 million from Hungarian bank accounts, EUR 600 000 from Croatian bank accounts, EUR 400 000 from Spanish bank accounts, EUR 350 000 in virtual currencies
- The total value of the seizures is estimated at about EUR 5.5 million
International search for the EUR 38 million lost in a few days
The criminal network, comprised of French and Israeli nationals, targeted companies located in France. In early December 2021, one of the suspects impersonated the CEO of a company that specialized in metallurgy, based in the department of Haute-Marne in north-eastern France.
The fraudster asked the company’s accountant to make an urgent and confidential transfer of EUR 300 000 to a bank in Hungary. The fraud was discovered a few days later when the accountant, thinking he was acting on behalf of the company’s CEO, attempted to make a transfer of EUR 500 000. The company filed a complaint, and the investigators subsequently found that the call from the alleged CEO came from a number in Israel.
In late December 2021, a real estate developer based in Paris also fell victim to fraud with a similar modus operandi. The damages were much more significant in this case, however. To perpetrate the fraud, the suspects impersonated lawyers, saying they worked for a well-known French accounting company. After gaining the victim’s trust, the fraudster requested a large, urgent, and confidential transfer. Pretending to be consultants, they persuaded the Chief Financial Officer (CFO) to transfer millions of euros abroad. In total, they defrauded the company of almost EUR 38 million in a matter of days. Using a pre-existing money laundering scheme, these funds were quickly transferred to different European countries, then to China, and finally to Israel.
A link between these two scams was established in January 2022 when the Parisian real estate company filed a complaint. The information exchange and international cooperation facilitated by Europol led to the discovery of accomplices, modi operandi and funds. The criminal investigation in Croatia contributed to the discovery of the real identity of the money mules used by the criminal network.
The competent authorities in Croatia blocked and froze over EUR 600 000 in several bank accounts. The Portuguese investigation led to the seizure of approximately EUR 3 million held in multiple bank accounts. The Hungarian authorities discovered that more than EUR 7 million had been received in Hungarian bank accounts before being withdrawn in cash or transferred to bank accounts in other countries. The Hungarian authorities interrogated 16 individuals, two of whom had been arrested previously and are currently under criminal supervision. They seized more than EUR 1 million in several bank accounts.
Europol’s support in tracing money movements
Since January 2022, Europol has facilitated the exchange of information and provided specialized analytical support, including financial and cryptocurrency analysis and expertise. The analysis led to the identification of links between countries to enable the urgent seizure of criminal assets before the suspects could launder them. On the action days, Europol deployed experts to France, Hungary, and Israel to cross-check operational information against Europol’s databases in real time and provide forensic support on the ground.
In 2020, Europol created the European Financial and Economic Crime Centre (EFECC) to increase synergies between economic and financial investigations and to strengthen its ability to support law enforcement authorities in effectively combating this major criminal threat.
