Spanish police make arrests in Unetenet Ponzi case
Following a failed attempt at attaching a cryptocurrency to the Untenet Ponzi scheme, 6000 Spanish investors filed a class-action lawsuit against the company and its owners.
In their complaint, investors alleged that Unetenet had duped some 20,000 affiliates out of €50 million Euros.
At the time Spanish regulators had not publicly made a move on the scheme, despite the Bank of Latvia and Payoneer all but crippling Unetenet in mid-2014.
Turns out Spanish authorities were indeed investigating Unetenet, with raids held on the 15th of July seeing Unetenet ringleaders arrested and millions of EUR recovered.
Following coordinated raids across the country, Spanish police have arrested some twenty Unetenet insiders:
The National Police have arrested 20 people: two in Madrid, one in Valencia, two in the province of Malaga, eight in the province of Seville, a person in Langreo, two in the province of Alicante and four in Arrecife (Las Palmas).
The raids also resulted in the seizure of
18 computers: laptops, hard drives and CPUs, 3 tablets; numerous documents related to fraud and money laundering; €15,505 euros and two luxury cars.
Funds held in Unetenet bank accounts were also seized, including
an account in Latvia with more than €5 million EUR, nearly $22 million US dollars, $2600 Canadian dollars, £1,600 pounds (GBP) and $365 Australian dollars.
No word yet on whether Unetenet mastermind José Manuel Ramírez Marco was one of those arrested.
Testament to the stealth with which regulators around the world investigate fraudulent Ponzi schemes, Spanish police revealed that multiple agencies worked to investigate Unetenet.
The operation was conducted jointly by the Money Laundering Group of Police Headquarters Western Andalusia and specialized agents of the Central UDEF of the General Commissariat of the Judicial Police attached to the Executive Service for the Prevention of Money Laundering (SEPBLAC); in collaboration with police Headquarters in eastern Andalusia, Valencia, Asturias and the Canary Islands; and police stations in Alicante, Velez-Malaga, Fuengirola, Elche, Denia, Arrecife and Langreo.
After more than year and a half of investigation, agents were able to confirm the existence a company that acquired its victims through publicity events, such as those held in luxury hotels, promotional videos and educational talks, and offered them extra income quickly by posting ads on a company network.
The con artists running the company used money invested to invent and developed a virtual currency, which had no value and made it impossible for investors to recoup their investments.
That virtual currency was Unete, with police providing a detailed description of how it was used to defraud Unetenet investors:
The company decided to convert all the money that victims had accumulated in their back-office -represented by American dollars- into a virtual currency invented by the company, with the idea being that victims would receive their payment services.
This new currency had no value, nor was it integrated into the usual monetary and commercial traffic (financial systems and economy), so (in effect) victims saw their dollars transformed into something useless.
(Victims) had no chance to recover (their investments), unless they were successful at recruiting new victims. This saw them get paid in real money, which was the only way they could recoup their investments.
This was a very effective system for the company, since the money paid in did not cost them anything. Instead ownership of existing funds was just changed to reflect new people who had invested.
It should, as what happened Unete and Unetenet is pretty much what’s currently going on in every MLM cryptocurrency scheme in operation today.
Having yet to see a legitimacy MLM cryptocurrency offering, I suspect the bust of Unetenet is but one of many we’re going to see over the coming years.