Eighteen arrested in connection with alleged global online fraud network
German authorities say suspects used stolen card details to buy 19mn subscriptions on fake websites
Eighteen people have been arrested in Germany and several other countries in connection with an alleged international online fraud and money laundering network that caused losses amounting to hundreds of millions of euros.
Prosecutors allege that between 2016 and 2021 the suspects used credit card details from about 4.3mn victims in 193 countries to purchase more than 19mn subscriptions via “professionally operated fake websites”, according to a joint statement from the Koblenz public prosecutor’s office, German financial regulator BaFin and the federal criminal police (BKA) on Wednesday.
BKA vice-president Martina Link described the arrests — part of one of Europe’s largest investigations into online fraud in recent years, dubbed “Chargeback” — as “a significant blow to the global financial fraud scene”.
The suspects were detained after 29 arrest warrants were issued, and more than 60 buildings searched in Germany and abroad, with assets worth €35mn seized in Germany and Luxembourg.
Investigators are pursuing 44 suspects of various nationalities, including American and Canadian, in a case that began in 2020. Among them are six former employees of payment companies.
Prosecutors said the stolen credit card data was obtained in part through phishing attacks and data leaks. Intermediaries allegedly acted in between the fake companies operating the websites and the payment service providers.
Officials suspected the group “compromised four major German payment service providers” to process the fraudulent transactions, in one case using software to disguise the flows of money.
In other cases, prosecutors said the group collaborated with former senior managers at payment companies, who allegedly enabled the providers to generate substantial revenue from so-called chargeback fees.
The cost of unauthorised credit card charges is estimated at more than €300mn. At least €150mn in proceeds were allegedly laundered through bank accounts and about 500 shell companies, mostly in the UK and Cyprus.
The roughly 2,000 fake websites mimicked streaming, dating and pornography services, typically charging about €50 a month and concealing payments under “incomprehensible” descriptors such as helpyourselfbill.com or righttobill.com. Germany’s Financial Intelligence Unit uncovered the network after identifying recurring patterns in suspicious transaction reports.
BaFin’s Birgit Rodolphe said the fraudulent activity was fully halted in 2021 and the suspects no longer worked in financial services.
The authorities declined to confirm the names of suspects and affected companies. Der Spiegel reported that the affected payment providers included Unzer, Nexi Germany (formerly Concardis), Payone and Wirecard, which collapsed in 2020.
Unzer, which is part-owned by Goldman Sachs, said police had visited, but not searched, its Heidelberg office.
The investigation concerned “former employees of Unzer”, with whom the company had “ended all relations in 2021”, a spokesperson said. At that time, Unzer was owned by American buyout group KKR. There were no investigations into current staff, Unzer added.
Unzer had been subject to special audits by BaFin in 2021, which led to a fine for deficiencies in its anti-money laundering and organisational controls. The regulator also imposed a temporary ban on new customers and appointed a special representative to oversee remediation between 2022 and 2024.
Nexi said it would not comment on an ongoing investigation, adding: “Nexi Germany has not been involved in such business since 2021, as we proactively ended all related partnerships. Nexi Germany always co-operates transparently with the authorities.”
Payone, owned by France’s Worldline, said it had “no knowledge of investigations” against the company or its employees.
Prosecutors said the final number of victims and total losses could rise. The probe has taken years, they added, because investigators had to contact hundreds of credit card holders in several countries and issue more than 90 international requests for legal assistance.