The arrest was part of a joint investigation with the corporate regulator, which executed four search warrants across Victoria and NSW.
“In December 2020, a joint-agency investigation was commenced between Fairfield City PAC Detectives and Australian Securities and Investment Commission (ASIC) in relation to a fraud syndicate which was operating across Australia.”
The man was granted strict conditional bail and will appear at Fairfield Local Court on December 15.
That arrest follows the apprehension of 52-year-old American Richard Emile Ayoub in Woolloomooloo, Sydney, on November 12.
Regulatory sources confirmed three search warrants were executed in Victoria and one in NSW relating to its investigation into a suspected fraud ring. NSW Police executed two raids on the same day.
It followed the establishment of an investigative team known as Strike Force Tallagranda by Kings Cross detectives in March to investigate a growing number of fixed income-related scam allegations.
Electronic devices and documents were seized from Mr Ayoub’s unit in Cowper Wharf, Woolloomooloo.
“The investigations revealed [Mr Ayoub] was operating from NSW and had allegedly received more than $2.8 million from 14 would-be investors – many of them retirees – before [allegedly] funnelling the money into bitcoin, between March and August this year,” the NSW Police statement said.
Fake PIMCO bonds
The would-be investors claimed to police they were duped into investing in fake bonds, mainly through self-managed super funds, by online operators allegedly posing as trusted financial institutions.
Mr Ayoub was charged with 13 counts of obtaining benefit by deception and 13 counts of recklessly dealing in the proceeds of crime.
Court documents reveal the charges related to individuals who invested between $24,000 and $500,000 each in “fake PIMCO bonds” and “fake Nomura bonds”.
This type of alleged investment scam was first revealed by The Australian Financial Review after a fake prospectus for an IFM high-yield bond fund was circulated to investors. That was the first of many doctored documents involving global institutions to circulate in the local market.
The brands of Citi, Vanguard, PIMCO, UBS, HSBC, Nomura, Schroders and several others were allegedly used to fool retirees into investing their savings and self-managed super into what they believed were high-yielding but safe investments.
Would-be investors allege they were targeted after searching for high-yield investments via search engines such as Google.
That led them to allegedly fake investment comparison websites where they entered contact details.
In time, they were contacted by salesmen with British accents who allegedly used the names of real staff members at the firms they were impersonating.
Victims of these types of scams would then deposit funds into bank accounts controlled by the scammers, including accounts tied to cryptocurrency exchanges, where proceeds were allegedly converted to cryptocurrencies and transferred to wallets offshore.
The proliferation of allegations of scammed solicitations led the corporate regulator to issue warnings to investors.
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