Four people were indicted due to investment fraud with damages of about 2.4 billion crowns associated with the company JO Investment. According to the indictment, at least 3900 clients were deceived. The High Public Prosecutor’s Office in Prague has announced on its website . According to the plaintiffs, all four defendants committed money laundering, and three of them committed fraud. According to earlier police information, three of the defendants are managers of JO Investment. The defendants face up to ten years in prison.
According to detectives, the JO Investment business model had the features of the Ponzi scheme, ie the so-called plane or pyramid. The principle of these frauds is that investors entrust their money to a high-value investment fund, but the fund operator retains the money instead of investing and pays only part of it to some investors as an alleged return on investment to attract other clients. When there is no money left in the fund, it goes bankrupt.
The National Police Office against Organized Crime (NCOZ) has previously stated that since 2016, JO Investment has been offering investments on world stock exchanges in the USA, Europe and Asia unjustifiably and under the pretext of unrealistic appreciation of deposits on the financial market. However, the managers did not invest clients’ money and kept it for themselves to buy real estate, luxury cars and goods.
Last February, criminal investigators detained 18 suspects in house searches, seizing cash in crowns, euros and dollars, real estate, luxury Bentley, Maserati and Ferrari cars, jewelry, including Rolex watches, gold bars and other precious metals, all in total value of 1.3 billion crowns.
“If guilt is confiscated, the confiscated proceeds of crime can be used to pay damages on a pro rata basis, and only for those victims who have already registered their claims in criminal proceedings through court-appointed joint proxies,” prosecutor Boris Havel said today.