Cyber trading – investment fraud on the Internet?

Trading platforms on the internet have been booming for years. The largest providers have millions of customers. They are based in Cyprus or Israel, for example.

There are currently an increasing number of lawsuits relating to allegations of cyber trading fraud.

The defendants are accused of offering supposed investment products such as shares, foreign exchange or cryptocurrencies for trading, but never actually investing the money invested, thus depriving investors of their assets. Due to the assumption of organised structures in which a large number of people are active, the accused are usually confronted with the accusation of commercial and gang fraud – an accusation that can be punished with high prison sentences. Sometimes the accused are also charged with the offence of forming a criminal organisation.

Public prosecutors assume professional online investment fraud

The trading platforms are said to use professional imagery and design to give the impression of an officially licensed provider. Registration and verification by the recruited persons should be very easy and thus convey to customers that they are dealing with a reputable financial service provider.

Investigations are usually based on the assumption that the call centre employees promise quick returns, high price jumps and supposedly unique investment opportunities, but that no trading or brokerage services are actually offered.

The call centres are supposed to be organised like state-of-the-art companies, have differentiated management and accounting, pay taxes and ensure a high level of satisfaction among their employees, who are supposed to receive bonuses for investors they recruit.

The call centre employees are also said to be trained in psychological manipulation techniques and – according to the allegation – in the position of alleged financial advisors, they use personal phone calls, emails and chat messages to gain the trust of potential victims in order to persuade them to invest substantial sums of money.

However, the employees of the trading platforms are then never supposed to invest this money, but only pretend to open a trading account and carry out trading transactions.

Issuing an arrest warrant/order for pre-trial detention

It is not uncommon for arrest warrants to be issued against the accused and for them to be remanded in custody. This is usually based on the assumption that there is a risk of absconding, a risk of concealment and/or a risk of reoffending.

A risk of absconding within the meaning of Section 112 (2) no. 2 of the Code of Criminal Procedure is predominantly assumed if the assessment of all the circumstances of the individual case makes it more likely that the accused will evade the proceedings than that he will remain available to them.

The assumption of a risk of absconding must not be based on presumptions, but must result from certain facts. The fact that a risk of absconding is “conceivable”, for example because the accused is a foreigner and could therefore have connections abroad, is no more sufficient for the assumption of a risk of absconding than the assumption that the accused is living in precarious economic circumstances.

What is required is an overall assessment of all the factors in favour of and against the risk of absconding. The relevant circumstances include, above all, the nature of the offence of which the accused is accused, the personality of the accused, his living conditions, his previous life and his behaviour before and after the offence. In particular, any significant incentive to flee that may be provided by the expectation of punishment must also be taken into account.

In cases of cyber trading fraud, the accused are usually only resident abroad. The investigations and proceedings take place in Germany, as the injured parties are resident abroad. It is possible that the accused have never been in Germany themselves.

The reason for detention is the risk of concealment in accordance with Section 112 (2) No. 2 of the Code of Criminal Procedure if the behaviour of the accused gives rise to a strong suspicion that certain actions will interfere with material or personal evidence and thus make it more difficult to establish the truth. The investigating authorities are concerned that the accused may make contact with other persons in the offender group, warn them, influence them or otherwise influence them, as well as remove, destroy or falsify evidence.

According to Section 112a of the Code of Criminal Procedure, pre-trial detention can also be ordered if there is an assumed risk of recidivism, i.e. the offender is strongly suspected of having committed one of the offences listed in No. 1 or 2 and, in addition, certain facts justify the risk that he will commit further significant offences of the same kind or continue the offence.

The arrest warrants issued in the context of cyber trading fraud proceedings are usually based on the subsidiary ground of risk of recidivism if the continued operation of call centres is assumed or known and it is assumed that further similar offences will be committed in these centres.

Issuing an international/European arrest warranteines

If the accused is not in the Federal Republic of Germany but abroad and is wanted for the purpose of criminal prosecution, an international arrest warrant or a European arrest warrant can be issued.

An international arrest warrant is not an independent criminal arrest warrant, but a national investigation or execution warrant issued in an international form and also includes an extradition request for cases of arrest abroad.

A European arrest warrant (EAW) is a subset of an international arrest warrant and is also not an arrest warrant in its own right, but a search warrant. A European arrest warrant is intended to enable and facilitate the extradition of suspects within the European Union. The European arrest warrant is a simplified cross-border judicial procedure for the surrender of wanted persons for the purpose of prosecution or execution of a custodial sentence or detention order.

A European arrest warrant issued by a judicial authority of an EU country is valid throughout the entire territory of the European Union. When applying the European arrest warrant, the authorities must respect the procedural rights of the suspects or accused persons, e.g. the right to information, to the assistance of a lawyer and an interpreter and to legal aid in accordance with the law of the country in which the arrest is made.

Legal representation of defendants in cyber trading fraud proceedings

MPP will represent you if you or a relative are facing allegations of cyber trading fraud.

We have already been involved in a large number of such fraud proceedings and have the necessary expertise to support and optimally represent you in the proceedings brought against you.

If a relative of yours is already in custody, we will visit them immediately in the prison to inform them about the possibility of a detention review or detention appeal, to assist them in applying for telephone and visiting authorisations and to discuss the status of the proceedings with the accused.