HEADLINE: Seychelles Court Orders Seizure of €29 Million in Ponzi Scheme Proceeds

Seychelles Supreme Court Permanently Seizes €29 Million in Ongoing Ponzi Scheme Investigation

The Seychelles Supreme Court has ordered the permanent seizure of €29 million as part of an ongoing investigation into a complex Ponzi scheme that attracted investors from the European Union.

Application by the Attorney General’s Office on Behalf of the Financial Intelligence Unit (FIU)

Following an application by the Attorney General’s Office on behalf of the FIU, the funds were transferred to Seychelles under the provisions of the Proceeds of Crime Act.

Scheme Lured Investors with False Promises of High Yield Investment Program

The scheme, which promised exorbitant returns, lured in investors under the guise of a high yield investment program (HYIP), leaving many believing they were investing in a legitimate business. However, authorities allege that the profits were in fact being derived from new investor funds, rather than genuine business activities.

Suspicious Activity Reports Exposed the Fraud

Suspicious activity reports from both local and foreign entities alerted Seychelles authorities to the scheme after transactions on accounts in Seychelles and other European jurisdictions raised red flags.

Tracing the Criminal Proceeds

The criminal proceeds of the fraud were traced to bank accounts owned by two international business companies, both registered in Seychelles and with alleged addresses in the country. The true beneficiary and sole director of these offshore entities was a European Union national.

False Documents Submitted to Explain Irregular Activity

Documents presented to the Seychelles bank indicated that the companies’ primary business involved real estate investments. However, an in-depth analysis by the FIU uncovered a pattern of transactions that was more consistent with a Ponzi scheme. In an attempt to explain the irregular activity, false documents were submitted to the bank.

International Collaboration to Combat Financial Crimes

This case serves as a clear example of the effective collaboration between financial service providers and authorities in preventing Seychelles from being used as a haven for international criminals. The FIU has been working closely with counterparts in Europe, the US, the UK, and Asia as part of an international effort to combat such schemes.

Ongoing European Investigations and Court Proceedings

In Europe, ongoing investigations and court proceedings have been initiated against the two Seychelles offshore companies and their respective beneficial owners. Several key suspects have already been arrested for charges including organized fraud, money laundering, and illegal banking practices. The total value of the fraud is believed to exceed €25 million.

Long-Term Probes into Fraudulent HYIPs

This particular investigation, which has taken approximately four years to reach court in Seychelles, is just one of several ongoing long-term probes by the FIU into schemes falsely marketed as HYIPs that have alleged ties to Seychelles-registered ownership vehicles, bank accounts, directors, or other services.

Public notices regarding suspected fraudulent schemes, such as the notorious Stoic Capital Management Inc, are typically issued in the jurisdictions where they are operating illegally before they become the subject of lengthy transnational investigations.