Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Authorities allege ex-IDF intel officer ‘mastermind’ behind €200m scam

Authorities allege ex-IDF intel officer ‘mastermind’ behind €200m scam

An Israeli man who founded a binary options trading platform has been named by Austrian authorities as one of the masterminds of a massive “pan-European” fraud scheme.

Austria’s Ministry of the Interior, which oversees police and public security, has cited Israeli citizen Ilan Tzorya, founder of the binary options platform Tradologic, as one of the masterminds of a fraud scheme that allegedly netted over 200 million euros.

The January/February 2021 issue of the ministry’s magazine “Offentliche Sicherheit” (Public Safety), featured an article describing how federal police have, since 2017, investigated an Israeli-run multinational ring of allegedly fraudulent call centers running financial websites. The investigation has thus far led to 11 suspects being taken into custody as well as a conviction of Tzorya’s former business associate Gal Barak.

Tzorya, who also spells his surname Tzroya, denied any wrongdoing, telling The Times of Israel he believes the claim originates with a rival of his who is out to harm him.

According to investigators, the ring duped consumers into investing in binary options and contracts for difference (CFD) — forms of gambling on supposed stock movements — and on cryptocurrencies, but used software that could manipulate the prices to ensure the fraudsters came out on top.

Until recently, media reports on the scheme have revolved around Barak, 33, who reportedly owned call centers in Belgrade, Sofia, Sarajevo, Pristina, Tbilisi and Kyiv. The Times of Israel has previously reported on Barak’s arrest and the allegations against him.

Reports in Bulgarian, German and British media have referred to Barak as the “Wolf of Sofia,” and described him as the ringleader of the massive scam being investigated by Austrian and German police. In September 2020, the Vienna Regional Criminal Court sentenced Barak to four years in prison.

But the January/February article claimed for the first time that Tzorya, who has hitherto stayed out of the limelight, was also a “mastermind” of the scheme under investigation and that he in fact founded the company, Tradologic, that allegedly made the fraud possible, according to Austrian police.

“The accused Israeli citizen Ilan T. [Tzorya] is considered to be one of the masterminds behind the websites Option888, OptionStars and Speartrader,” the article said.

“He was confronted by investigators from the Federal Criminal Police Office in Vienna with the allegations,” it added.

Responding to these claims, Tzorya confirmed to The Times of Israel that he was questioned by Austrian police several weeks ago, but said that he flew to Austria and answered questions voluntarily and has not been arrested.

He said that if Austrian police had thought he was a fraud mastermind they could have arrested him on the spot.

“If they had thought so, they could have easily, and should have arrested me a few weeks ago when I was in Austria. It’s obvious I am not the mastermind behind these sites,” he said.

The Austrian Interior Ministry article also highlighted Tzorya’s background as an intelligence officer in the Israel Defense Forces.

‘More than an ordinary internet scam’


According to the article, the plethora of fraudulent online trading websites has become a “pan-European fraud phenomenon,” with just the network of call centers around Barak inflicting about 200 million euros in losses on victims worldwide.

“Skillful acts of deception on the Internet cause devastating financial damage and human suffering,” said Gerald Rak, a senior law enforcement official who oversees financial investigations and asset recovery for the Austrian Federal Police.

According to Austrian police, Barak ran websites that included XtraderFX, Option-Stars and Goldenmarkets, all of which lured investors with promises of quick profits as well as claims that German and Austrian celebrities had earned money through online trading. Investors would start out depositing a few hundred euros, but later be cajoled and induced by trained call center employees using fake identities to “invest” more and more of their money.

“After the customer has transferred the money, ‘brokers’ simulate

supposed trading in financial instruments,” a press release accompanying the Austrian Interior Ministry article explained.

“While the customers assume that they are now trading in the advertised financial instruments, there is no actual trading on the market. In fact, the [financial] charts presented can be updated using specially developed software that can be manipulated arbitrarily by the perpetrators,” the press release alleged.

Investors never earned money trading on these websites, Austrian police further alleged.

“The money flows into the money laundering network and the victim has no chance of receiving a payout,” said station sergeant Martin Grasel, who investigates white-collar crime for the Lower Austria Criminal Police Office.

Grasel said the investigation began in September 2017 when the Wiener Neudorf police station in Lower Austria received a complaint from a victim who had lost more than 100,000 euros on the Option888 and Speartrader websites.

As Grasel began investigating, numerous victims across Austria came forward with similar accounts of alleged online trading fraud.

“I was immediately aware that there was much more to this than an ordinary Internet scam,” he said.

Criminologists and law enforcement officials in Europe and elsewhere say that online consumer fraud has reached epidemic proportions. A recent European Commission survey found that 56 percent of European respondents said they had been exposed to a scam or fraud in the last two years.

Unlike traditional criminals, online fraudsters rely on reputation laundering, hiding in plain sight behind a veneer of legitimacy provided by a soporific press, using their ill-gotten gains to attain public leadership roles and using an opaque network of corporate dealings to obscure their true involvement in criminal activity.

Grasel said he noticed that many of the allegedly fraudulent websites used software produced by an Israeli-founded Sofia-based company known as Tradologic.

‘Crime as a service’


In January 2019, Grasel said in the Interior Ministry article, Austrian police raided Tradologic’s Bulgarian offices in Sofia and seized large amounts of digital material. Using this material, prosecutors were able to prove that victims had been defrauded, prove that the software could manipulate investors’ trades, and were given a window into the scope of the fraud, Grasel said. He noted that Tradologic had processed a total of more than $710 million of victims’ money, an amount in excess of the 200 million euros of fraud alleged in this particular investigation.

“The [Tradologic] software was programmed in such a way that the fraudsters were always able to manipulate trades. For example, the prices were changed at short notice at a certain point in time in order to exceed a limit value, whereby the trade was automatically closed and the desired result achieved. These possibilities also existed through the assignment of risk levels. The higher the victim’s risk level was set, the higher the probability that the victim’s trades would generate losses through automated manipulation,” Grasel said.

Grasel alleged that Tradologic not only provided software, but a full suite of services for would-be scammers who wished to set up a fraudulent website and call center business.

“In addition to the software, Tradologic offered other services, such as shell companies with straw men, bank accounts or payment service providers,” he said.

Under questioning, Grasel said, recently convicted fraudster Gal Barak had alleged that Tradologic constituted an entire “ecosystem” of fraud whose business model was “crime as a service.”

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
×