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 (also represented by the European Funds Recovery Initiative (EFRI)) were awarded total compensation by the Court, payable within 14 days.

The relatively low sentence is due to a partial confession of the defendant.  In the course of the proceedings, Gal BARAK – the Wolf of Sofia – admitted that small investors never had a chance of making a profit as the trades got manipulated by the scammers.

The charges against Barak were brought on 8 July 2020 after almost three years of intensive investigation by Austrian law enforcement authorities.  Barak was arrested in Bulgaria 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 will soon become final.  Further charges against his accomplices are in preparation.

The judgment in detail

After eight weeks, the jury found GAL BARAK – the Wolf of Sofia –  guilty to

1.  to be one of the beneficial owners and operators of the fraudulent binary options, Forex fraud platforms (“Brands”) XTraderfx, SafeMarkets, OptionStars/OptionStarsGlobal Global, Golden Markets from 2016 to 2019;

2.  manipulate trading software (which was admitted by the defendant), the Court found that no actual trading activity could be ascertained so that these online trading platforms were only pure fraud facades;

3.  Instruct  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 people  – let by GAL BARAK – falsely claimed to represent the interests of investors when, in fact, the owners of the brands (xtraderfx, safemarkets,..) profited when investors lost money.  The boiler room employees provided false names and qualifications. They also and 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 damages of at least 2.6 million EURO to at least 1,330 Austrian citizens.

The Court case also established 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.

Further 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 found in the confiscated documents, the total damage of the fraudulent websites operated by Gal BARAK amounts to more than 200 million EURO.  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 that similar charges will be brought against GAL BARAK in Germany, Switzerland, and other European countries. The respective aggrieved parties in these countries will have the opportunity to seek justice and compensation.

BARAK has run its cybercrime organization with partners from post-communist countries such as Ukraine, Russia, etc.  In particular, the suspects include Gery “Gaby” SHALON, an Israeli of Russian origin who was indicted in the U.S. with extensive cybercrime offenses.  In addition, the Russian Vladislav SMIRNOV, already suspected in Austria of money laundering in connection with Meinl Bank.

Further steps by EFRI

Thanks to the Austrian law enforcement authorities, for the first time, European victims of such a fraud system are now actually getting their payments back.  The money is still in Bulgaria in the bank accounts of various shell companies of Gal BARAK.  Concerning the claims of the victims of GAL BARAK from the various 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 more than 830 mainly European victims of online investment fraud worldwide, with total losses of more than €36 million.  Currently, victims of cybercriminals have to realize daily that there is neither adequate prosecution nor redress for this type of crime in Europe.  The European Union is not at all prepared for virtual crime, which knows no borders, because of its federal law enforcement system.  As a result, European retail investors are exposed to cyber criminals’ mafia-like and global structures.  The EFRI Initiative calls on the EU authorities to urgently respond to this threat.

Pls, find here the German version of the posting.