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FRAUD

Cops nab accomplice in Austrian ‎€50m caper

Police in Hong Kong have arrested an alleged accomplice who is believed to be involved in the scam which cost an Austrian aerospace company over 42 million euros.

Cops nab accomplice in Austrian ‎€50m caper
Disgraced CEO Walter Stephan. Photo: Facebook/FACC

According to a press briefing from Austrian police on Friday, a 32-year-old Chinese national was arrested in Hong Kong on July 1st after money was traced to a bank account linked to the attack.

Known as the “fake president scam”, the perpetrator was able to penetrate the email system of FACC, a respected Austrian plane parts company.  The email hack was then used to send a series of requests to the Chief Financial Officer, instructing him to transfer tens of millions of euros to accounts in other countries.

As a consequence of the losses, the firm's CEO Walter Stephan was fired by the board in May, along with its Chief Financial Officer, who authorized the wiring of the money.

The Chinese man is believed to be involved in the laundering of the money from the robbery, having allegedly received 4 million euros from the total amount lost.

A spokesman for FACC said that the company was working on recovering 10 million of the total losses, leaving another 42 million as yet untraced.

FACC, whose customers include Airbus, Boeing and Rolls-Royce, said that its supervisory board sacked Walter Stephan with immediate effect in May, after he “severely violated his duties”. 

Press reports said that in January a FACC employee wired around €50 million, equivalent to almost 10 percent of annual revenues, after receiving emailed instructions from someone posing as Stephan.

By the time the firm, which began life making skis before expanding into aeronautics, realised the mistake, it was too late. The money had disappeared in Slovakia and Asia, according to the Standard newspaper.

The company said in May that the scam, also known as “bogus boss” or “CEO fraud” and increasingly popular with sophisticated organised criminals, cost it €41.9 million in its 2015/16 business year.

It has managed to claw back €10.9 million, it said, but still posted a pretax loss of €23.4 million. In February the company also sacked its finance chief because of the slip-up.

They was no suggestion that either executive was involved in the scam. An independent expert stated that the fired executives had failed in their fiduciary duties, and had not put in place appropriate financial controls to frustrate such a fraud attempt.

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FRAUD

Suspected Austria bitcoin fraud sparks Europe-wide probe

Authorities investigating a suspected bitcoin-related scam centred in Austria have asked Interpol to help determine whether there might be perpetrators - and victims - of the scheme across Europe.

Suspected Austria bitcoin fraud sparks Europe-wide probe
PHOTO: JACK GUEZ / AFP
“Hundreds” of people across Austria have complained of being defrauded by the “Optioment” scheme dealing in the digital currency, Christina Ratz, spokeswoman for the Vienna public prosecutor's office, told AFP on Thursday. Die Presse, a daily, put the number of possible victims as high as 10,000.
 
Two Austrians have been identified as being accused of fraud in the case, with more suspects possible as the case progresses, Ratz said.
 
Investors were promised returns of up to four percent per week for investing bitcoins into the opaque scheme, which initially did offer dividends before suddenly collapsing in November.
 
In January Austria's financial market watchdog brought Optioment to the attention of prosecutors, saying it suspected fraud, a pyramid scheme or violations of capital markets regulations.
 
The scheme appears to have used “multi-level marketing” in order to grow, with investors encouraged to find new clients themselves.
 
“I got my whole family involved. We put around 50 bitcoins in. The money's gone. I'm sure of it,” one young woman told a joint investigation by Die Presse and the public ORF TV station.
 
Another investor recalled an event promoting the scheme at the Pyramide hotel in Voesendorf, just south of Vienna: “They ran on stage and started running around, they were playing air guitar. It felt like a cult”.
 
Reports of the number of bitcoins invested in the scheme go as high as 12,000, worth around €95 million at current value, or more than double that at the peak of the boom in the currency.
 
Lawyers acting for the Austrians identified as the frontmen for the scheme issued a statement saying their clients did not handle any cash or bitcoins themselves, Die Presse reports.
 
The paper reported the men as saying that they were themselves defrauded by two mysterious figures behind the scheme, a Danish man, Lucas M., and a Latvian, Alex P.