Large-Scale Ponzi Scheme Defrauded Global Investors
Norway’s National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) has charged four Norwegian men with orchestrating an investment fraud that scammed investors out of approximately NOK 963 million ($86.5 million) between March 2015 and November 2018.
How the Fraud Operated
The scheme lured investors with promises of lucrative “product packages” containing cryptocurrencies and shares. These investments were marketed through multi-level marketing (MLM) structures, with promotional events held worldwide and existing members recruiting new participants. However, Økokrim’s investigation found that no substantial investments were ever made. Instead, the operation functioned as a Ponzi scheme, using funds from new investors to pay earlier participants.
Victims spanned multiple countries, including Sweden, Belgium, the Netherlands, and China. The fraud operated under various names, such as Crypto888 Club, Octa Partners, and Nano Club, with each entity rebranding as the previous one collapsed.
Money Laundering and Key Defendants
Authorities discovered that over NOK 700 million ($62.7 million) of the illicit funds were funneled through a Norwegian law firm’s client accounts before being transferred to companies in various Asian countries. This complex transaction network was designed to obscure the origins of the money, making it difficult to trace.
The four defendants, aged between their 50s and 70s, include individuals with prior financial crime convictions. Among them:
- Terje Hvidsten, a former art dealer, has been imprisoned since 2024 on separate fraud charges.
- Dag Hætta (formerly Verner) Eriksen has a history of corruption and fraud.
- The other two accused remain unnamed but are described as a 52-year-old from Romerike and a 70-year-old former lawyer linked to money laundering.
Upcoming Trial and Regulatory Implications
The trial is set to begin in September at the Oslo District Court and is expected to last 60 days. This case highlights the growing threat of investment fraud, particularly in the cryptocurrency sector, and underscores the challenges regulatory and law enforcement agencies face in tackling such transnational financial crimes.
As crypto-related fraud continues to rise, authorities worldwide are intensifying efforts to protect investors. The European Union’s Markets in Crypto-Assets Regulation (MiCA) and new Anti-Money Laundering directives are part of a broader push to enhance security in the digital asset space.
