Turkey Probes Companies With Same Owner as Firms That Processed Online Fraud Payments

Turkish authorities have launched a money laundering investigation targeting the corporate network of Cypriot-Norwegian fintech entrepreneur Ozan Özerk.

The probe follows an expose published earlier this year by OCCRP and media partners, which linked different companies owned by Özerk to the processing of proceeds of a massive global online fraud scheme. The journalistic investigation was unrelated to the current probe in Turkey.

The Istanbul Chief Public Prosecutor’s Office is now investigating individuals and companies associated with Ozan Elektronik Para A.Ş. , an electronic money institution that was allegedly “used to introduce criminal assets,” primarily derived from “illegal betting activities” into the financial system.

Investigators also allege that a second company, Aveon Global Sigorta A.Ş., which is also majority-owned by Özerk, injected “criminal proceeds” into the financial system disguised as insurance premiums.

In March, media partners including OCCRP, Swedish Television (SVT) and Norway’s VG, published Scam Empire, which was based on leaked data showing payments from online fraud that ran through dozens of companies, including two owned by Özerk. There is no evidence suggesting either company was aware that the payments derived from fraud.

Now, Turkish authorities are investigating at least two companies that were not found in Scam Empire data, but are also owned by Özerk.

The Prosecutor’s Office said in a November 7 statement that it had seized assets worth 72 million Turkish lira ($1.7 million), and orders were issued to detain 11 employees.” This followed an operation a week earlier in which assets worth about $9.6 million were seized and six executives were arrested. Özerk has not been named as a subject of the investigation.

Ozan Elektronik Para A.Ş. has publicly confirmed that Turkish authorities have appointed a trustee to run the company in accordance with an October 31 court decision.

“Upon completion of the compliance procedures and controls required by legislation and by the ongoing investigation, the return of customer and merchant funds will commence,” Ozan Elektronik said in a statement posted to LinkedIn last week.

Aveon Global Sigorta A.Ş. did not respond to a request for comment.

The Scam Empire project published earlier this year exposed call centers where employees convinced at least 32,000 people across the world to make “investments” totalling at least $275 million.

Payments from victims were sent through a variety of companies. According to the data, they included the Malta-registered payment processing company OpenPayd, and European Merchant Bank, a small financial institution in Lithuania also known as EM Bank. Özerk owns both companies.

Özerk did not respond to phone calls or text messages to his personal line, or to messages to his companies. However, he spoke to a VG journalist by phone before Scam Empire was published and said he was “not involved in those companies other than as a shareholder,” adding that both have protections to prevent their systems from being abused by criminals.

“Fraud occurs despite all the measures we put in place,” he said at the time. “We take it very seriously.”

EM Bank said it could not comment on payments uncovered by reporters in the Scam Empire project, saying it is “prohibited from disclosing information that relates to current or former clients,” while noting that it takes action at any indication of “fraud exposure.”

The bank said it was aware of the Turkish investigation, and “considers the topic as a reputational risk and takes relevant actions in line with its internal regulations.”

“We would like to emphasize that these developments are entirely unrelated to European Merchant Bank,” the institution said, adding that “our understanding is that the allegations are directed at Ozan Elektronik Para A.Ş. and not against Ozan Özerk.”

Journalists working on the Scam Empire investigation also found that at least 2.5 million euros ($2.9 million) had entered and exited an OpenPayd account held by a company that operated suspected sham platforms used by the scammers.

OpenPayd told reporters at that time that “it monitors all transactions to/from its clients for fraud or other financial crime red flags.”

In regard to ongoing money laundering investigation into by Turkish authorities, the company said: “This matter does not affect OpenPayd’s operations or the services provided to its clients as the UBO [ultimate beneficial owner, Özerk] has no involvement in the board of directors or management teams of the respective OpenPayd entities.”