$30 million international crypto fraud from 2018 kicks off trial in France

A major fraud trial involving crypto and diamond investments has opened in France, bringing over 20 defendants to court on charges of defrauding 1,300 individuals and several top-tier football clubs. According to local media, the proceedings began on Oct. 21 in a conference center in Nancy, eastern France, due to the large number of plaintiffs involved.

The accused are alleged to have orchestrated a complex scheme between 2016 and 2018 that stole approximately €28 million ($30 million) from victims. The operation involved creating fraudulent websites offering investment opportunities in diamonds and cryptocurrencies, luring investors with promises of high annual returns. One individual reportedly lost €400,000 after investing in what was described as a “diamond savings plan.”

Per Barron’s, the fraud extended beyond individual investors to a dozen professional football clubs. The defendants allegedly impersonated player agents, contacting clubs to inform them of player banking details changes. The clubs were then instructed to redirect salaries to new accounts controlled by the fraudsters. Clubs such as Sochaux, Angers, and Toulouse fell victim to this tactic, collectively losing around €60,000.

The scale of the operation was extensive, involving 199 bank accounts opened across 19 countries to facilitate the movement of funds. Around 850 victims are represented at the trial, with some having invested significant portions of their savings or even taking out loans to participate in the supposed investment opportunities. The case has been dubbed “red card” due to the involvement of football clubs among the plaintiffs.

As the European Union Agency for Criminal Justice Cooperation reported in 2018, the fraudsters employed sophisticated methods to execute their scheme. They approached victims by expressing interest in acquiring commercial businesses and building trust before convincing them to install crypto wallets. Once the wallets were set up, the suspects allegedly stole the funds. The use of crypto allowed for rapid and difficult-to-trace transfers across borders, complicating efforts by authorities to track the money flow.

The legal proceedings are set to last four weeks, with 22 defendants facing charges ranging from criminal conspiracy to fraud committed in a gang. About 12 individuals are accused of allowing their identities to open bank accounts for fund transfers, while others are charged with activities such as building fake websites or procuring counterfeit diamonds. Three defendants are being tried in absentia as they remain at large.

Authorities have recovered €2.8 million, which may be used to compensate victims. According to Barron’s, the Colman law firm, representing approximately 100 plaintiffs, stated that the trial signifies a strong stance against international financial fraud. Investors affected by the scheme span multiple countries, highlighting the transnational nature of the operation and the challenges faced in combating such crimes.