News sources in France and Israel are reporting that authorities in both countries are cooperating to uncover what they believe to be a defrauding of French traders by Israel based Forex and Binary Options brokers, totaling in the neighborhood of €105 million (USD $120 million).
The reports by LesEchos.fr and leJDD.fr in France, and Calcalist.co.il in Israel, are that the French judge in charge of the investigation, Aude Buresi, secretly visited Israel recently and interrogated up to 15 suspects who were detained at the French authorities’ request by Israeli police, and also oversaw five searches alongside Israeli police.
Five Israel-based brokers were identified in the scam, including Forex Place (better known as 4XP), BForex, Tradax, Sisma Capital, and Aston.
According to one of the French press reports, the scam basically worked as follows: The brokers targeted online ads at French web surfers offering very lucrative investment opportunities. The French targets then followed by calling a local toll free phone number, or left their contact details online at the advertiser’s website. Representatives of the companies, who were based at call centers in Israel, called the targets back introducing themselves as representatives of French or British companies, and offered them to invest in foreign exchange and binary options trading schemes with an annual yields of between 20% and 88%.
To convince the targets to transfer money, the company reps gave the targets fake company info for London or Paris addresses. The targets were asked to transfer money to known brand name banks in Europe such as ING, RBS or HSBC. The companies then transferred the money to banks outside the EU, to countries such as Israel, Georgia or Singapore. From there much of the money found its way to offshore tax havens including the Seychelles, Belize or the British Virgin Islands.
Among the victims of the fraud were reportedly a former pilot, an insurance agent and an 81-year-old retiree. A number of the individual victims were hit for sums in the hundreds of thousands of Euros.