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.