Europe, 22 April, 2024 Eurojust has played a pivotal role in assisting national authorities throughout Europe in combating a significant fraud scheme involving counterfeit investments in medicinal cannabis plants. The operation led to the dismantling of two interconnected criminal networks that advertised the fraudulent scheme online and laundered profits amounting to approximately €645 million. Coordinated efforts resulted in the arrest of nine suspects, with Eurojust providing support to authorities in Germany, Spain, and France by facilitating the establishment of a joint investigation team (JIT) to probe the fraud.
Victims across Germany, France, and Spain, totaling over 4,500 individuals, filed formal complaints against the perpetrators who employed a crowd-funding initiative to solicit investments of a minimum of €50 per participant for purported medicinal cannabis cultivation projects. However, investigations revealed that no cannabis plants were ever acquired, despite claims of collaboration with licensed enterprises for cultivation. The fraudulent activity persisted from at least January 2020 to July 2022, resembling a pyramid or ‘Ponzi fraud,’ with promises of exorbitant returns on investments.
The illicit scheme primarily relied on diverting invested funds to pay affiliates, sustain the operation, and fuel expansion through extensive online campaigns. To launder proceeds, an intricate network of international businesses was employed. Investigations suggest the involvement of a Russian criminal network, with ties to a German-based crime syndicate. Victims in Germany and Spain reported losses totaling €51.5 million, but the overall estimated investment amounts to nearly €645 million, with approximately 550,000 participants worldwide, mostly European citizens.
Eurojust’s involvement dates back to 2022, providing substantial support to national authorities, including the establishment and funding of the JIT. This collaborative effort culminated in a successful Joint Action Day coordinated by Eurojust. Operational actions against the criminal networks extended to Estonia, Latvia, Italy, Malta, Poland, Portugal, the United Kingdom, and the Dominican Republic at the behest of German and Spanish authorities. France contributed significantly to crypto flow analysis and participated in search operations in Germany and Spain.
Europol played a central role in operational coordination and provided tailored analytical support from the outset. Results of financial investigations and intelligence were shared with participating countries. On the action day, Europol deployed officers equipped with mobile offices to various locations globally. Operations encompassed over thirty searches, resulting in the freezing of millions of Euros in crypto assets and bank accounts. Additionally, substantial assets, including real estate, vehicles, artwork, cash, luxury items, electronic devices, and documents, were seized.
Operational activities were carried out at the request of and by various authorities, including the Public Prosecutor’s Office in Berlin, the National Police in Spain, and the Paris Prosecutor’s Office in France, among others. Each participating country contributed to the comprehensive effort to dismantle the fraudulent networks and mitigate further financial harm.
