On 1 September 2020, Gal BARAK, a citizen of Israel, 33, also called – the Wolf of Sofia – was sentenced to 4 years in prison at the Regional Court of Vienna, by the Senate of lay judges chaired by judge Christian Böhm for severe commercial fraud and money laundering (according to section 147 (3) StGB and section 165 STGB in conjunction with section 28 (1) StGB).
The Austrian victims ( represented by the European Funds Recovery Initiative (EFRI)) were awarded total compensation by the Court, payable within 14 days.
4 years seems to be a low sentence for fraud against thousands of victims
The relatively lenient sentence is due to the defendant’s partial confession. During the proceedings, Gal Barak, the Wolf of Sofia, admitted that small investors never had a real chance of making a profit, as the boiler room employees manipulated the trades.
The charges against Barak were brought on 8 July 2020, after nearly three years of intensive investigation by Austrian law enforcement authorities. Barak was arrested in Bulgaria at the end of January 2019 based on an EU arrest warrant and extradited to Vienna at the end of 2019, where he has been detained ever since.
The charges against Marina Barak in Vienna are expected to become final soon. Further charges against his accomplices are in preparation.
More details on the judgment!
After eight weeks, the jury found Gal Barak – the Wolf of Sofia – guilty to
1. be one of the beneficial owners and operators of the fraudulent binary options and FOREX fraud platforms (“Brands”) XTraderfx, SafeMarkets, OptionStars/OptionStarsGlobal, Golden Markets from 2016 to 2019;
2. manipulate the trading software (which was admitted by the defendant), as the court found that no actual trading activity could be ascertained, so these online trading platforms were only pure fraud facades;
3. have instructed boiler room employees in Sofia, Belgrade, and Serbia to target and defraud thousands of victims, looting monies from retirees and other individuals. The evidence showed that the boiler room personnel, led by Gal Barak, falsely claimed to represent the interests of investors, when in fact, only the beneficial owners of the brands (XtraderFX, Safemarkets, etc.) profited from investors’ losses. The boiler room employees provided false names and qualifications. They also made false claims about whether and how investors could withdraw funds from their (fake) trading accounts.
The operation of the fraud platforms or boiler rooms resulted in at least €2.6 million in damages to at least 1,330 Austrian citizens.
The court case also evidenced that the deposits made were used to finance the operating costs of the mafia-style fraud system. The remaining amount was transferred to the bank accounts of Gal Barak and his accomplices (Gery Shalon, Vlad Smirnov).
Further criminal proceedings ahead!
The very essence of the nation-state-based EU legal system is that each European country must separately prosecute fraud committed against its national citizens.
According to the customer data in the confiscated documents, the total damage from the fraudulent websites operated by Gal Barak amounts to more than €200 million. Approximately 35,000 victims of the fraud scheme run by the convicted person are found in all jurisdictions except the USA, Bulgaria, Serbia, and Israel. We hope similar charges will be brought against Gal Barak in Germany, Switzerland, and other European countries. The respective aggrieved parties in these countries can seek justice and compensation.
Barak has run its cybercrime organisation with partners from post-communist countries such as Ukraine and Russia. In particular, the suspects include Gery “Gaby” Shalon, an Israeli of Russian origin who was indicted in the US with extensive cybercrime offences. In addition, the Russian Vladislav Smirnov is already suspected of money laundering in connection with Meinl Bank in Austria.
Further steps planned by EFRI
Thanks to the Austrian law enforcement authorities, European victims of this fraud system now have, for the first time, a chance to recover their money. The money is still in Bulgaria, held in the bank accounts of various shell companies belonging to Gal Barak. Concerning the claims of the victims of Barak from the different European countries represented by EFRI, we will also, based on the documents from the criminal case now available to us, take the appropriate legal steps in the coming weeks.
The EFRI Initiative, based in Vienna, Austria, now represents over 830 primarily European victims of online investment fraud worldwide, with total losses exceeding €36 million. Currently, victims of cybercriminals have to realise daily that there is neither adequate prosecution nor redress for this type of crime in Europe. Due to its federal law enforcement system, the European Union is ill-equipped to address virtual crime, which knows no borders. As a result, European retail investors are exposed to cyber criminals’ mafia-like and global structures. The EFRI Initiative urges EU authorities to respond urgently to this threat.
Additionally, you can find the German version of this posting here.
