Turkish Authorities Nab OmegaPro Co-founder Over $4 Billion Crypto Ponzi Scheme

Key Takeaways

• The co-founder of the alleged $4 billion crypto Ponzi scheme was arrested in Istanbul in July.
• The authorities acted on an anonymous tip and testimony from formal victims to zero in on the co-founder.
• Police seized multiple crypto wallets and passwords and tracked $160 million in crypto movement. 

Turkish authorities have arrested the co-founder of OmegaPro, a $4 billion crypto Ponzi scheme with alleged links to the infamous OneCoin scam.

After a tip-off from an anonymous source, Istanbul Provincial Gendarmerie Command raided multiple regional locations. It apprehended Andreas Szakacs, the co-founder of OmegaPro, who lived under the alias of Emre Avci.

OmegaPro was a Dubai-based cryptocurrency and FX investment company established in 2019. The platform offered customers a range of paid investment products with yield returns as high as 300%.

OmegaPro stopped withdrawals in November 2022, almost simultaneously with FTX’s collapse. The firm shut down its entire operation by July 2023. The common public was lured into the scheme but only realized it after it shut down and ceased operations without notice.

How Did Authorities Zero on the Suspect?

According to a report published  in local media, the investigation into the Ponzi scheme began after an anonymous tip-off on June 28, which reportedly revealed Szakacs’s location. Szakacs was taken into custody after Turkish authorities raided two properties in Beykoz, Istanbul, on July 9. 

The authorities seized  32 cold wallets containing different cryptocurrencies and password storage devices. They also seized multiple computers and found numerous OmegaPro documents and records of vast money movements.

The tip-off was corroborated by a Dutch national, Abdul Ghaffar Mohaghegh, a victim of the scam himself. His testimony helped the authorities pinpoint the location of the crypto ponzi scheme’s co-founder.

Mohaghegh reportedly invested $7 million in the OmegaPro Ponzi scheme and represented 3,000 other individuals who collectively lost over $100 million in the scam.

Apart from the tip-off and testimony from foreign victims, several local citizens also reported fraudulent experiences with a crypto investment app called Omega Invest, an alleged subsidiary of the OmegaPro app.

The local victims claimed they made quick profits on their small initial investments, followed by demands for more significant ones. However, the app ceased access when they tried to withdraw their considerable investments.

How Did Omega Pro Scam Work?

The OmegaPro scam was structured as a Ponzi or pyramid scheme, with money from new investors distributed to old investors, offering an illusion of profitability.

In a Ponzi scheme, potential victims are lured into the business by offering high returns on the initial small investment, forcing the victims to make higher investments. After the victims make higher investments, hoping to make some quick money, the scam either ceases their access or is deleted and vanishes altogether.

For example, a new joinee into a Ponzi scheme is first asked to make a $5 to $10 investment promising a 10X return. After the investment, the user’s account is updated with the profit and allowed to withdraw or partially withdraw. 

Following this, the investment threshold increases dramatically from 10X to 100X and even further. The user who has withdrawn the initial amount, hoping to make a quick profit, often invests more than the threshold, and their account is accordingly reflected as having high profits.

However, when they try to withdraw the amount, they are asked to make further investments to take out their current profit. The cycle continues until the scam creators decide to run away with the money.

This was the case with OmegaPro, which offered an investment plan between $100 and $50,000.

About the Author

Prashant Jha

Prashant Jha is a crypto-journalist focused on the US and UK markets, his interests lie in blockchain technology and crypto adoption across emerging economies.

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