Forex fraud keeps plaguing Russia, scammer gets to spend 38 months in corrective colony

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More than three months after the Russian police finalized their investigation into a RUB 32 million Forex scam that affected more than 250 people in the Russian Priamurie, one of the main participants in the fraudulent scheme gets to bid goodbye to his freedom for more than three years.

According to a report by Russia’s information agency Interfax, referring to an announcement by the Prosecutor’s office of Blagoveshchensk, a 33-year local resident has been convicted of committing fraud. He will spend 3 years and 2 months in a Russian colony. He is also ordered to disgorge the ill-gotten investor funds – that is, RUB 32 million. When deciding on the penalty, the Court took into account, inter alia, that the defendant exposed his accomplices and that he showed remorse for the crime he committed.

According to the prosecutors, the administrators of an online trading website offered investors to put their money into managed accounts for trading on the Forex markets. The clients were promised that they would receive percentage of the profits generated from this trading. Given that the promised returns were very high, the offer appeared rather attractive.

After only several months of activity, in March 2013, the website stopped operating. The defrauded investors filed reports with the police and a criminal case was opened.

During the course of the investigation, the police raided premises in the city of Blagoveshchensk, where the entity in question was registered. The police also identified six individuals responsible for the fraudulent scheme. In August last year, the 29-year old man that developed the website was sentenced to 3 years in a colony for fraud.

Forex pyramids remain a problem in Russia, although, technically, there is a Forex law that allows only companies with Forex dealer licenses from the Russian central bank to operate in Russia and to offer their services to Russian residents. There are only eight companies licensed to offer OTC Forex services to Russian investors. In 2017, the Central Bank of Russia approved only two applications for Forex dealer licenses.

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