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Prison sentences of up to 4 years for large-scale international investment scam

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Skip Navigation LinksRechtbank Noord-Holland > Nieuws > Prison sentences of up to 4 years for large-scale international investment scam
Haarlem, 28 oktober 2021

The Noord-Holland District Court has sentenced two men to 3 and 4 years in prison in the Cayenne mega court case, after an investigation of the FIOD, the Netherlands Fiscal Information and Investigation Service, into large-scale international fraud, a so-called forex scam, committed in 2011 and 2012. The scam operation ran through companies under the name of IB Capital. Many of the victims were active on the international investment platform ProphetMax. Two Dutch defendants, a 42-year-old man from Haarlem and a 49-year-old man from Winterswijk, stood in court.

A Lengthy Investigation

In the Cayenne investigation, the FIOD interviewed many persons and investigated a huge number of documents. 37 letters of legal assistance were forwarded to various countries requesting the authorities to gather relevant information. The final court file the FIOD presented to the court consisted of more than 13,000 pages.

Fraud and Money Laundering

The Court directs that there is statutory and convincing evidence that the two Dutch defendants committed fraud by forex trading with the help of two American accomplices. The perpetrators abused their clients’ trust in an organised manner. Investors were induced by false claims and promises to invest large sums of money in forex trading, and were let in the dark about the secret arrangement between the Dutch and the Americans to make big profits from their clients’ losses. In finding clients for their fraudulent activities, the Dutch defendants co-operated with individuals in various countries, thus defrauding an international group of investors. 

On 16 and 17 May 2012 the Dutch and the Americans held a so-called ‘D-day’ or ‘losing day’ by letting the victims lose millions in a coordinated action whilst making huge criminal gains. They acted cunningly by taking positions as counterparties to the clients on whose behalf they were supposed to trade, and by going on trading on these two days until the clients sustained enormous losses. In this way, the clients’ losses resulted in the perpetrators’ gains. 

The Court deems it proven that the defendants then laundered the proceeds of their criminal activities by deviously siphoning off the money through a series of transactions into a network of international private companies.

Repeat Offender

While his pre-trial detention in the Cayenne case was suspended, the Haarlem defender again committed investment fraud with an accomplice on a smaller scale. With regard to this offence, the Court has sentenced him for defrauding several investors in forex trading and for attempted defrauding of a larger group of investors.

Court Judgement

The Court has mitigated the punishment due to violation of the reasonable time frame for bringing the defendants to trial. Under Netherlands criminal law, a trial must be completed within two years. Given the complexity and the nature of the Cayenne investigation, the Court ruled that this mega court case should have been completed within six years. The deadline was not met, though.

Taking everything into consideration, the Court has concluded that only an unsuspended sentence of a considerable term is appropriate to be imposed on both defendants. As the man from Winterswijk eventually co-operated with the criminal investigation and gave full insight into his operations, he has been sentenced to 3 years in prison, including a 1 year suspended sentence. The man from Haarlem denied any responsibility for his actions during the trial. He has been sentenced to 4 years in prison, including a 1 year suspended sentence, for said charges and the recent fraud in 2015.

During a three-year probationary period, both defendants must respect a number of conditions preventing them from re-offending. For this reason, the Court has banned both defendants from practising their profession. During the probationary period, they are not allowed to trade in any financial products. Furthermore, the Court has directed that the sentences of both men be published including their personal details as a forewarning to possible future victims. This only happens when the verdict is final.

Compensation for Damages

19 foreign victims have come forward as injured parties and have summited requests for compensation for damages. Their claims are dealt with in a US arrangement with a receiver committed to
seeking compensation from the defendants. In doing this, the receiver is actively co-operating with the Netherlands Public Prosecution Service. The Court has ruled that the victims’ claims are being dealt with through an effective compensation mechanism under civil law. Therefore, and because of their complexity, the victims’ claims have not been included in this trial.

The defendants have been sentenced to compensate damages of about 575,000 euro to two Dutch victims who are not part of the receivership arrangement.

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