Scamming Traders Launder Money through Bulgarian TBI Bank

Monsieur B. receives a call from Monsieur L., whom he does not know. Monsieur L. is polite, eloquent and has an intriguing proposal for fast and secure income from operations with foreign currencies and minerals on the exchange, the so-called trading. Monsieur L. lives in London, the beating financial heart of Europe, and is a financial advisor in a famous company – FinanPerf. But Monsieur B. does not know anything about trading? This is the smallest concern. The company, where Monsieur L. works, has developed a revolutionary web platform – Bank of Market which makes trading a child’s play. He will explain everything step by step. The risk is negligible; the profits – guaranteed. Moreover, Monsieur L. proved a countryman of Monsieur B. from a forsaken French region, forsaken, but so picturesque and authentic. And what times there were; just what space, what food, fresh air. What people… do people now have manners? Yes, Monsieur B. is now retired; he lives in a large and noisy city; cost of living is constantly rising, and an additional income would not hurt.

Monsieur B. trusts his eloquent countryman and jumps into the unknown waters of exchange transactions, mentored by the expert from London. He opens an account in a professional looking website and wires through his bank the modest amount of 100 euro to start stock exchange transactions. Then another 200, 300, 1,000… The site displays in real time how investments are moving; bonuses accrue in the virtual account of Monsieur B. and it swells. Monsieur L. calls him every day, advising him on what and how much to invest; admonishing him to wait for the right moment for a big hit. And when that moment comes, Monsieur B. must fund his account with 30,000 euro to gain double. He transfers the money to the account of some well-known British bank and begins to wait for the big profit.

Instead, he receives a phone call from Monsieur R.. What a sorrow, Monsieur L. had suddenly died, hit by a car while walking to work in the London City. Monsieur R. is now in charge of Monsieur L.’s clients. Does Monsieur B. want to come to the funeral in London? Monsieur B. is shocked, but does not have extra money to go to the funeral of his countryman, confidant and financial adviser. He has invested everything is into the Bank of Market. What will happen to the account? Monsieur R. promises that they will meet and that he would call again. A few days later, Monsieur R. really calls. He deals only with the so-called “gold clients”, and Monsieur B. does not have a “gold” status, but he could become “golden” by transferring another 20,000 euro. Then, in just two weeks, the bonus will reach 120,000 euro. And if he does not do it? If he does not, then things will be worse. He will not be able to withdraw money from his account because Monsieur L. had died. Monsieur B. wants guarantees. He receives a letter from the very boss of the company FinanPerf, who guarantees him that at the beginning of September 2014, he will be able to withdraw 120,000 euro.

So, at the end of August Monsieur B. wires 20,000 euro, but now to the account of an offshore company in TBI Bank Bulgaria. He regularly monitors the site and sees that his account there is supplied by the same amount. But when he tries to withdraw 70,000 euro in early September, the transaction is declined. Monsieur R. evaporates into thin air. The domain also evaporates after him, and mails to his boss, who personally promised the big bonus, return unanswered. A week later the account of Monsieur B. also disappears from the site, and then the site itself disappears. The Bulgarian bank does not return the insistent calls and emails of Monsieur B., who wants his money back. Desperate, Monsieur B. turns to the French Prosecution. He realizes soon that he is not alone in this hopeless situation, but one of

Thousands of French victims of fraud worth hundreds of millions of euro

according to the French Agency Autorité des marchés financiers (AMF), equivalent to the Bulgarian Financial Supervision Commission (FSC), which has registered 810 complaints just in the first seven months of 2014 and has begun an awareness campaign, accompanied by a blacklist of sites that do not have a license for financial intermediation.

So does the Belgian FSC, warning of possible fraud by Bank of Market at the end of August, just before Monsieur B. wired 20,000 euro in TBI bank.

TBI Bank is part of the Kardan group, which is listed on the Dutch stock exchange. The group with Israeli capital is active in the sector of water infrastructure, real estate and finance. It owns a Bulgarian bank through TBIF Banking and Retail Lending which is owned by KFS Financial Services.

Структура на групата Kardan. Източник:

Структура на групата Kardan. Източник:

Refined scammers and offshore companies with accounts in Bulgaria

The case described above is a true story, though certain circumstances have been changed to protect the anonymity of the concerned individuals. And this is not an isolated case, but one of the many complaints received at the site from victims of trading fraud who have transferred money to Bulgaria. The story of Monsieur B. demonstrates how fraudsters skillfully use psychological and profiling maneuvers to enchant the potential victim; to gain his/her trust and to get the aspired bank transfer, by also resorting to threats. But without the final link – the bank servicing the offshore account, the scheme cannot operate. Thus, the question arises where the money went after all and whether regulations against money laundering that banks are required to apply proactively have been adhered to. It has also emerged that, in addition to Bulgaria, banks in other European countries have been used as well. According to information obtained by Bivol, significant amounts of money, in the order of millions of euro, have transited trough Bulgaria.

Furthermore, the scheme continues to operate. Unauthorized trading sites, posting accounts of offshore companies in the Bulgarian TBI Bank, are included in the long “black list” of the French. A simple check in Google shows that the phenomenon is massive and obviously these are not isolated cases. There are dozens of fake websites that have opened accounts namely in this bank. An inquiry of Bivol showed that some of the accounts are active which means that the potential victims of fraudsters are perhaps even now transferring amounts that it is unlikely they will see back. And this is happening right under the nose of the State Agency for National Security (DANS) and the central bank (Bulgarian National Bank, BNB). The latter even boasted recently successes in the fight against money laundering in Bulgarian banks.

In discrepancy with reality, the BNB report for 2014, in its part about laundering money from criminal activity sounds optimistic. “The functioning of the banking sector as a reliable environment, excluding the transfer of illegal funds in the financial system, was among the most important topics to which BNB has committed at a national and European level,” is written in the report, presented to the Parliament. It also notes that “when isolated cases of violation of the Law on Measures against Money Laundering have been established, BNB had undertaken measures in adherence to the law“. According to the central bank, there is a “high level of commitment of the management of banks in the process of building defense mechanisms“.

We asked questions to the press office of TBI Bank to clarify these “defense mechanisms” – how did the bank respond to complaints received from French citizens and what it has undertaken. We also asked what are the conditions for opening an account by an offshore company; is the ultimate economic beneficiary of offshore companies known; are legal provisions against money laundering being applied and how. The answer of TBI says literally the following:

As you know very well, in cases like the one you are mentioning, as a rule, credit institutions are reluctant to play the role of arbiter between contending parties, especially if their dispute has already been referred to the respective jurisdiction. In such cases, credit institutions communicate only with the competent authorities and institutions in accordance with relevant legislation and applicable regulatory requirements and guidelines.

Victims of fraud, however, complained explicitly that they have turned to the bank and have not received any assistance. Bivol approached by phone the Head of the “Cybercrime” department in DANS Yavor Kolev, who was not aware of the above-described schemes. He urged all concerned parties to report their cases through the site -useful information for the stung French citizens who have already filed complaints with the French authorities. But they are more interested in where their money is and whether they will get it back someday. And what about the public interest in revealing what happened to the millions gained from the criminal activities of the fake traders? Are they in Bulgaria or have they long traveled to some more untraceable destination where there are no such efficient and vigilant supervisors as DANS and BNB, “not allowing the transfer of illegal funds in the financial system”?



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