A significant fraud trial involving crypto and diamond investments has commenced in France, with more than 20 defendants facing charges of defrauding 1,300 individuals and several prestigious football clubs. The trial, which began on Oct. 21 in Nancy, eastern France, has attracted widespread attention due to the large number of plaintiffs involved.
The accused individuals are accused of orchestrating a complex scheme between 2016 and 2018 that resulted in the theft of approximately €28 million ($30 million) from victims. The operation revolved around setting up fraudulent websites that offered investment opportunities in diamonds and cryptocurrencies, enticing investors with promises of high annual returns. One victim reportedly lost €400,000 after investing in what was marketed as a “diamond savings plan.”
According to reports from Barron’s, the fraudulent activities extended beyond individual investors to include a dozen professional football clubs. The defendants allegedly posed as player agents, contacting clubs to inform them of changes to player banking details. The clubs were then directed to reroute salaries to new accounts controlled by the fraudsters. Clubs such as Sochaux, Angers, and Toulouse collectively lost around €60,000 as a result of this deceitful tactic.
The scope of the operation was extensive, involving the opening of 199 bank accounts in 19 countries to facilitate the movement of funds. Approximately 850 victims are represented at the trial, with some individuals investing significant portions of their savings or even taking out loans to participate in the purported investment opportunities. The case has been dubbed “red card” due to the involvement of football clubs among the plaintiffs.
As highlighted by the European Union Agency for Criminal Justice Cooperation in 2018, the fraudsters employed sophisticated methods to execute their scheme. They initially gained victims’ trust by expressing interest in acquiring commercial businesses before convincing them to set up crypto wallets. Once the wallets were established, the suspects allegedly siphoned off the funds. The use of cryptocurrencies enabled fast and challenging-to-trace transfers across borders, making it difficult for authorities to follow the money trail.
The legal proceedings are expected to span four weeks, with 22 defendants facing charges ranging from criminal conspiracy to gang-related fraud. Some individuals are accused of allowing their identities to be used to open bank accounts for fund transfers, while others are charged with activities like creating fake websites or procuring counterfeit diamonds. Three defendants are being tried in absentia as they remain at large.
Authorities have managed to recover €2.8 million, which could potentially be used to compensate victims. The Colman law firm, representing around 100 plaintiffs, emphasized that the trial signifies a strong stance against international financial fraud. The victims of this scheme hail from multiple countries, underscoring the transnational nature of the operation and the complexities involved in combating such crimes.