Istanbul prosecutors said on Friday that Israeli citizens allegedly managed an international investment fraud network operating from Turkey that defrauded victims around the world of more than $3 billion, according to a statement by the Istanbul Chief Public Prosecutor’s Office.
The operation, which was led by Turkey’s Interior Ministry and National Intelligence Organization in coordination with the Istanbul Chief Public Prosecutor’s Office, the Istanbul Security Directorate’s cybercrime unit, and Interpol, ended with the arrest of 191 suspects.
According to statements from the Turkish Justice Ministry, the investigation found that the operation was a large organization rather than the activity of individual companies. Prosecutors alleged that the organization was “managed by Israeli citizens” and referred to its leaders as “Israeli fraud barons.” The prosecutors said the Israelis appointed managers in various countries, who established companies and service centers used to operate the alleged fraud network.
Turkish Justice Minister Akin Gurlek said earlier that the investigation was being conducted as part of four criminal cases opened by Istanbul prosecutors this year. According to Gurlek, an examination of company ownership structures and ultimate beneficiaries showed a dominance of entities with “links to Israel.” The investigation also includes Turkey’s intelligence agency MIT, the Financial Crimes Investigation Board MASAK, Istanbul Police and Interpol.
According to prosecutors, the network operated companies in Turkey that were presented as service, consulting, and tourism centers. Through advertisements on social media, search engines, and websites, potential investors were promised high returns from foreign exchange and cryptocurrency investments. Details of people interested in investing were transferred to customer management systems and then to representatives who spoke their languages and persuaded them to transfer funds.
Prosecutors described a highly secretive operation in which employees recruited by the network were given code names and a fabricated “life story,” sometimes even claiming they had studied at prestigious universities such as Oxford.
Before beginning work, employees allegedly underwent polygraph tests intended to determine whether they had ties to law enforcement authorities. Workers were prohibited from bringing phones into offices and were reportedly forbidden from speaking Hebrew inside the offices.
According to prosecutors, the operation used, among others, the names of platforms Inefex, Quantum AI, Algo Education and Exentral-Int. When complaints accumulated against a particular platform, the suspects allegedly moved to operate under another name. Victims were initially asked to transfer small sums of money and were later persuaded to invest larger amounts. Prosecutors alleged that the suspects controlled the data presented to investors and could create the appearance of profits in order to encourage additional transfers.
When investors requested to withdraw their money, they were allegedly told that their accounts had been blocked and that they needed to transfer additional funds to pay taxes or remove the restrictions. Investigators said the money was not actually invested, but instead transferred to bank accounts and cryptocurrency wallets controlled by the network.
The alleged Israeli connection featured prominently in the prosecutors’ statement. According to findings by MIT, the Turkish intelligence agency, cited in the statement, after Israel banned binary options activity in 2017, the Israeli figures allegedly managing the operation sought to move the activity to other countries.
Prosecutors alleged that the “Israeli fraud barons” explicitly instructed their employees not to target Israeli citizens. US citizens were also excluded from the network’s targets, according to prosecutors. Countries whose citizens were allegedly major targets of the fraud included the United Arab Emirates, the UK, Canada, Australia, Ireland, Russia, Singapore, Malaysia, China, Switzerland, Belgium, Sweden and South Korea.
Financial institutions, money laundering and organized crime allegations
According to prosecutors, the amount of money taken from victims is estimated at more than $3 billion, and the funds were allegedly held in bank accounts and cryptocurrency wallets outside Turkey.
In a joint operation by MIT and Istanbul Police, authorities raided 44 locations belonging to 29 companies and 286 addresses in Istanbul and Mugla Province. Of the 239 suspects targeted by prosecutors, 191 were arrested. Authorities did not provide the number of Israeli suspects among those arrested. Real estate, vehicles, bank accounts and cryptocurrency assets were seized or frozen, and searches for additional suspects are ongoing.
The Turkish Interior Ministry separately said that property suspected of being proceeds of crime worth approximately 1.5 billion Turkish lira was seized during the operation, including 80 vehicles and 12 properties.
The allegations being investigated include fraud through information systems and financial institutions, violations of capital markets laws, establishing and participating in a criminal organization, and money laundering.