How Kobenhavns Andelskasse got hijacked by scammers!

Kobenhavns Andelskasse (a/k/a Copenhagen Cooperative Fund or KBH Andelskasse), a small Danish-regulated bank, collected and transferred hundreds of millions of stolen money to boiler room scammers in 2017 and 2018 after it got hijacked by scammers.

EFRI represents more than 1.100 European consumers who have been ripped off by investment scams, stealing about 55 Mio of their life savings. The harm done to hundreds of thousands of European consumers –( mainly older people) – during the past years by investment and boiler room scams is nothing short of shocking: massive financial losses, psychological distress, and mental illness resulting from such an experience. Unsuspecting European consumers lose their life savings to scrupulous international fraud organizations.

The operators of boiler scams need European payment processors (banks and legal and illegal payment service providers/FinTechs/PSPs) to collect and transfer the stolen money to offshore bank accounts under their control. EFRI is heavily convinced that without these willingly acting European PSPs, fraud in Europe could not be possible at this scale. Based on our members’ (a/k/a victims) payment vouchers and the findings in different criminal and civil investigations in Europe, we identify and expose those European payment processors most intensively used by scammers.

Based on this research, we found that Kobenhavns Andelskasse – a small Danish bank – was more or less involved in each boiler room scam from 2017 to 2018. No other European bank showed up in so many different investment scams.

How Kobenhavns Andelskasse got hijacked!

The venture from being an almost bankrupt unknown Danish cooperative bank to developing into a massive cybercrime enabler started in or around 2014. It could be a script for a Netflix serial.

The timeline:

2012 KBH started to be on the Danish Financial Supervisory Authority (FSA) Watchlist
2014 – directors have to leave the bank, and an insolvency scenario of the cooperative bank is looming
2014 – a bail-out investment of Dansk OTC and Jesper BAK saved the cooperative bank.
December 2015/16 FSA (Danish supervisory authority) audit uncovers compliance, risk deficiencies, and massive conflicts of interest issues.
April 2016 – Jesper BAK has to resign as chairman on FSA request.
June 2016 – Voting rights of Dansk OTC group deprived by FSA
Autumn 2016 – except for one board member, all board members resigned (on request of the Danish FSA)
Autumn 2016 – Wael ALMAREE joins as a beneficial owner vis WN International Group Aps
Spring 2017 – Clearhaus, a Danish Fintech, acquires 33% of KBH.
April/May 2018 – Clearhaus sells its shares to companies controlled by Wael ALMAREE (Moldavian entrepreneur)
April 2018 – British FinTech expert and Wael ALMAREE confident Robert Courtneidge gets appointed as director
April/Mai 2018 – FSA deprives voting rights of the new owners and starts compliance audits again.
August 2018 – A criminal complaint against Clearhaus employees and beneficial owners is filed by FSA.
August 2018 – Infos about massive money laundering issues get published.
September 2018 – Kobenhavn Andelskasse was switched into liquidation mode by FSA

The Bail-out and repositioning

Since 2012, KBH Andelskasse has been on the Danish Financial Supervisory Authority (FSA) watchlist for risky and non-compliant business activities. In the spring of 2014, the FSA dismissed the bank’s board when it became illiquid and headed toward bankruptcy. Dansk OTC stepped in.

Danish investors and capital market experts Jesper BAK and his college Dag Kaj SCHENBERG injected DKK 21,000,000 (paid in cash) via their legal entity, Dansk OTC, to bail out the bank from its doom scenario. Until then, the bank was supposed to provide retail banking products and distribute pensions, insurance, and investment funds products. As with any other cooperative bank, it was owned by its customers, who became cooperative members.

With the investment, Dansk OTC became a qualified owner in Kobenhavns Andelskasse (the first time Kobenhavn Andelskasse had owners with qualified ownership interests). As of May 3, 2014, Jesper BAK became the chairman of the board of directors, joined by Hans Christian Hansen and Erik Bent Hansen. The new owners soon decided to change the business model and transform the bank to serve their interests.

The Danish FSA started to intervene.

In December 2015 and January 2016, the FSA audited Kobenhavns Andelskasse and uncovered severe deficiencies in the risk and compliance standards and material conflicts of interest in the bank’s day-to-day operation. The audit finally resulted in the not-so-voluntary resignation of all but one board member as they were not deemed fit and proper. They did not meet the suitability requirements of management body members and key function holders for banks under Directive 2013/36/EU and Directive 2014/65/EU.

Jesper BAK resigned in April 2016. While FSA concluded its audit of Kobenhavns Andelskasse in the spring of 2016, the Danish prosecutor launched a criminal investigation against him and Dag Kaj SCHENBERG for insider trading and market manipulation. It was not the first time Jasper BAK had troubles with the law. In 1998, he already was found guilty of market manipulation and was sentenced to jail time. That said, it’s fair to assume that he was not fit and proper when he became a qualified owner and chairman of Kobenhavn Andelskasse.

Københavns Andelskasse received several orders to rectify these matters and ensure that a future board of directors and the Executive Board would have the required knowledge and personal integrity to run Københavns Andelskasse compliantly.

In June 2016, FSA decided to abolish the voting rights directly and indirectly associated with Jesper BAK.

Gamification & Scammification

Forcing the management board to leave and deprive its beneficial owner, Jasper BAK, of voting rights did not change the fate of Kobenhavns Andelskasse. On the contrary, things started to get worse. In or around autumn 2016, the well-known gambling entrepreneur Wael Sulaiman ALMAREE joined the bank as a new beneficial owner holding the investment in Kobenhavn Andelskasse via his WN International Group ApS, a freshly squeezed Danish legal entity.

Wael Sulaiman ALMAREE became one of the bank’s beneficial owners and started to change the bank’s business, which gave the bank the final, fatal blow. He and Clearhaus A/S (see below) opened the bank for international customers, initiating the high-risk business segment and focusing on gambling and scam businesses’ facilitation.

The Danish Fintech Clearhaus A/S acquired 33% of Kobenhavn Andelskasse in spring 2017, which is worth some EUR 10 Mio. Clearhaus had a close business relationship with Dansk OTC and Jesper BAK historically. In September 2015, Dansk OTC brokered a $3.2 Mio investment for Clearhaus A/S. In April 2017, FinTech argued that together with Kobenhavn Andelskasse, they could develop a solution that integrates traditional banking and so-called “acquiring business.” enabling them to address the needs of e-commerce companies (merchants). “Our interest is in closing the gap between traditional banking and acquiring. Clients will be able to see where they stand banking-wise without delay based on their transaction activity”.

Clearhaus A/S initiated and coordinated a massive inflow of international payments to Kobenhavns Andelskasse, mainly from its acquiring business for gaming and gambling customers from Norway, Turkey, and France.

WN International Group A/S, on the other hand, also incorporated shell companies abroad and managed them to sign up with KBH. These new KBH customers collected dirty money from hundreds of boiler room scams on KBH bank accounts and enabled the transfer of the stolen funds to the scammers.

In May 2018, Clearhaus informed the Danish FSA about selling its shareholdings to their fellow shareholder, WN International Group ApS (sole UBO Wael ALMAREE) and ACEA Capital A/S. ACEA Capital A/S (Wael ALMAREE supposedly owns 15-19.99% of this company). The Moldavian Wael ALMAREE finally became the controlling beneficial owner with estimated holdings of more than 35% of a European bank.

The new owners appointed Robert COURTNEIDGE, a well-known British FinTech pioneer (OneCoin advisor, ex-ePayments System), to the management board in April 2018.

The final act.

In August 2018, the bank reported former shareholder Clearhaus A/S employees to the police for alleged fraud and violation of the Money Laundering Act.

The FSA never approved ACEA Capital A/S and WN International Group Aps as the bank’s beneficial owners, and thus, they were deprived of their voting rights.

The initiated FSA investigations revealed massive money laundering issues. From October 2017 to September 2018 alone, the cash inflow totaled more than EUR 550 Mio (some DKK 4,1B) in foreign customers’ accounts. The money left the bank during the same period. In these 12 months alone, 183 foreign customers—all more or less related to the then-owners of KBH Andelskasse—triggered a total of 1645 money laundering alarms without any actions being taken. For more about this, read here and here on Fintelegram.

As of September 13, 2018, Kobenhavns Andelskasse was closed for gross and systematic violations of the compliance framework and AML directives. Finansiel Stabilitet took over the disgraced bank to be wound up. Besides, the FSA filed money laundering complaints with the Danish prosecutor. Also, civil charges were filed.

Corruption in Denmark is amongst the lowest in the world. According to the 2018 Corruption Perceptions Index from Transparency International, Denmark ranks first place out of 180 countries. It has consistently been in the top 4 since the first report 1995. The low corruption index was before the DANSKE bank scandal. Due to its smaller size, the KBH scandal never reached enormous public coverage like the DANSKE bank scandal. However, the extent of harm the board and the owners did to the European consumers (not Russian oligarchs) can be compared.

Until now, Finansiel Stabilitet and the Danish FSA deny any responsibility for the harm done to the victims. The KBH scandal is a sham for the European bank industry and its supervisory scheme.

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