Norway charges four men in connection with a “large and extensive” Investment fraud that collected NOK 963 Million ($86.5 millions) from investors between march 2015 and November 2018
Filing its indictment Monday, the National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway—also known as Økokrim—alleged that the fraud operated by encouraging individuals to invest in yield-bearing “product packages” The cryptocurrencies are a combination of shares and cryptocurrencies.
Økokrim says it has proof that the accused network of individuals made no real investments, and that their business had no earnings beyond the deposits of victims.
In a press release, Økokrim State Prosecutor Joakim Ziesler Berge said, “We believe this is a large and extensive fraud. We are talking about a great many victims in many countries who have lost their money, and significant sums that have ended up with the defendants.”
In this case, four men are in their 50s-60s-70s. Of the defendants, three have allegedly collected money from investments, while one has been accused of money laundering.
Over NOK 700 million (about $62.7 million) was laundered by the network through an investment firm in Norway. The money was also transferred to accounts linked with various Asian countries.
The victims, who were located in Sweden and Belgium as well as the Netherlands and China sent their money to so-called investment vehicles, such Octa Partners, Nano Club, Crypto888 Club.
All of these were brandings for the same multi-level marketing scheme (aka Ponzi). Octa Partners collapsed and was relaunched as Nano Club. Then, Crypto888 and later Nano Crowd.
Investors were offered a variety of cryptocurrencies, from OctaCoin to NanoCoin to Ormeus Coin. They also received monthly profits based on the promises made.
Norwegian Newspaper You can also find out more about DNTerje Hvidsten has been identified as one of the individuals indicted. A former art dealer, Terje has a history of convictions and imprisonment for serious fraud.
One other accused individual has been named as Dag Hætta (formerly Verner) Eriksen, who has similar convictions for corruption and fraud.
Two other alleged perpetrators are not named. One is a woman aged 52 from Romerike, a suburb north of Oslo, and another is a former lawyer of 70 years old who helped to launder proceeds.
Hvisten, 52, has denied any criminal responsibility. His attorney says that he objects to how the indictment describes him.
Two other defendants refused to comment. The case against the four is scheduled to be heard in Oslo District Court within 60 days of September.
“The case shows that organized crime in the form of fraud and money laundering across borders will be investigated and prosecuted, even if the victims of the crime are in countries other than Norway,” Joakim Ziesler-Berge.
"A growing problem"
Økokrim also mentions in its statement that investment fraud “is a growing problem in Norway and internationally,” Fraud experts echo this description.
“Investment fraud involving cryptocurrencies is increasingly common in Europe and globally,” Sarah Twohig specialized in crypto-fraud at the international law firm Pinsent Masons.
Twohig tell Decrypt that the latest Chainalysis Crypto Crime Report found that high-yield investment and ‘pig butchering’ scams deliver the highest returns for cryptocurrency fraudsters, with all crypto scams receiving at least $9.9 billion in on-chain value in 2024.
While she acknowledges that cryptocurrency transactions are still a growing part of the market, “only a limited share of the criminal economy,” Twohig has also admitted that fraudulent fraudsters can benefit from the use of virtual assets.
She explained. “Criminals often exploit the decentralised and pseudonymous nature of cryptocurrencies to carry out and conceal fraudulent activities more easily. This makes it challenging for regulatory authorities and law enforcement to trace and recover funds.”
The EU Markets in Crypto-Assets Regulation, or MiCA (Markets in Crypto-Assets Regulation), is a step in the right direction. MiCA aims to reduce the risk of cyber-fraud by placing strict requirements on providers of crypto-asset services.
“The EU’s new AML package is technology neutral so as to ensure that the proceeds of cryptocurrency crime cannot be used to launder funds or provide terrorist financing,” Twohig said “This will provide legal protection to investors and businesses operating in the cryptocurrency space alike.”