A major fraud trial involving cryptocurrencies and diamond investments has begun in France, with more than 20 defendants appearing in court accused of defrauding 1,300 individuals and several top-flight soccer clubs. According to local media, the lawsuit began on October 21 at a conference center in Nancy, eastern France, with the participation of a large number of plaintiffs.
The defendants are accused of orchestrating a complex scheme between 2016 and 2018 to steal approximately 28 million euros (approximately $30 million) from victims. The operation involved creating fraudulent websites offering investment opportunities in diamonds and cryptocurrencies, luring investors with promises of high annual returns. One individual reportedly lost €400,000 as a result of investing in something called a “Diamond Savings Plan”.
According to Barron's, the fraud affected not only individual investors but also more than a dozen professional soccer clubs. The defendants are said to have posed as players' agents and contacted clubs informing them of changes to the players' bank account details. Clubs were then instructed to redirect their salaries to new accounts controlled by the fraudsters. Clubs such as Sochaux, Angers and Toulouse fell victim to this tactic, losing a total of around 60,000 euros.
The scale of the operation was large-scale, with 199 bank accounts opened in 19 countries to facilitate the movement of funds. Approximately 850 victims were present at the trial, some of whom had invested a significant portion of their savings or taken out loans to participate in the envisaged investment opportunities. The case is called a “red card” because the plaintiff involves a soccer club.
As the European Union Criminal Justice Cooperation Agency reported in 2018, fraudsters used sophisticated techniques to carry out their schemes. They approached victims by expressing interest in acquiring commercial businesses and building trust before convincing them to install a cryptocurrency wallet. Once the wallet was set up, the suspects allegedly stole the funds. The use of cryptocurrencies has enabled rapid and difficult-to-trace transfers across borders, complicating efforts by authorities to track the flow of funds.
The legal proceedings are expected to last four weeks, with 22 defendants facing charges ranging from criminal conspiracy to gang fraud. About a dozen people are accused of allowing people to open bank accounts in their person to transfer funds, while others are charged with activities such as building fake websites and procuring counterfeit diamonds. The three defendants are on the run and are being tried in absentia.
Authorities recovered 2.8 million euros, which could be used to compensate victims. According to Barron's, the Colman Law Firm, which represents about 100 plaintiffs, said the case shows a strong stance against international financial fraud. The investors affected by this scheme span multiple countries, highlighting the cross-border nature of this operation and the challenges faced in combating such crimes.
