Financial Crime World

FAU Uncovers Alleged Investment Scam Involving Foreign Cryptocurrency

The Czech Financial Analytical Unit (FAU) has made significant progress in its efforts to combat financial crime. Two recent cases highlight the agency’s commitment to uncovering and preventing fraud, tax evasion, and money laundering.

Case 1: Alleged Investment Scam

The FAU investigated an alleged investment scam involving a newly issued foreign cryptocurrency. According to sources, a local company had recruited investors at non-public seminars organized abroad, promising high returns on their investments. However, the FAU found that the company provided contradictory statements about the source of funds and amended contractual documentation repeatedly, suggesting an attempt to conceal the origin of the funds received.

  • The investigation uncovered negative information about both the cryptocurrency issued and individuals acting on behalf of the foreign issuer.
  • The FAU suspects a multi-level marketing scheme similar to other known fraudulent ICOs.

Case 2: Cash Seized in Porsche Car

The FAU received information from German customs authorities about a roadside control of two Italian citizens carrying cash amounting to approximately EUR 170,000 in a Porsche Panamera car. The driver claimed that the funds would be used to purchase vehicles in the Czech Republic through their company.

  • Further investigation revealed suspicious transactions on the company’s accounts, including high incoming payments from foreign entities controlled by Italian citizens.
  • The FAU identified unusual flows of funds for the acquisition of mineral oils and detected possible tax evasion schemes involving the use of Polish and Bulgarian bank accounts.

Tax Evasion Suspicions

The FAU seized EUR 1.5 million and reported the case to the Police, citing suspicions of possible tax evasion and legalization of proceeds of crime.

  • In another incident, a customer signed a contract with a banking institution for currency conversion services and foreign payment intermediation, only to place orders for tens of thousands of US dollars in foreign exchange payments directed towards recipients in Vietnam and China.
  • The bank reported the suspicious transaction and suspended the execution of payment orders due to low customer interaction.

Data Protection Regulation

The FAU has also been proactive in implementing the General Data Protection Regulation (GDPR), which came into effect in May 2018. The agency has:

  • Proposed amendments to the AML Act to incorporate essential elements of data protection
  • Appointed a data protection officer to ensure compliance with the Regulation
  • Highlighted its efforts to comply with the GDPR and implement the 5th Anti-Money Laundering Directive (EU) 2018/843, which aims to strengthen the prevention of money laundering and terrorist financing in the EU.