Norway Charges Four Men in Major Investment Fraud

Norway has charged four men with involvement in a “large and extensive” investment fraud, which collected NOK 963 million ($86.5 million) from investors between March 2015 and November 2018.

Filing its indictment on Monday, the National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway—also known as Økokrim—alleged that the fraud operated by encouraging individuals to invest in yield-bearing “product packages” containing cryptocurrencies and shares.

Økokrim claims to have proof that the accused individuals made no real investments, and that their business had no earnings beyond the deposits of victims.

In a press release, Økokrim State Prosecutor Joakim Ziesler Berge stated, “We believe this is a large and extensive fraud. We are talking about a great many victims in many countries who have lost their money, and significant sums that have ended up with the defendants.”

The Accused and Their Operations

The defendants are four Norwegian men aged in their 50s, 60s, and 70s. Three are accused of collecting the invested money, while one is implicated in money laundering. The network is alleged to have laundered over NOK 700 million ($62.7 million) through a Norwegian investment firm and transmitted money to linked accounts in various Asian countries.

Victims, located in Sweden, Belgium, the Netherlands, and China, sent money to purported investment projects named Crypto888 Club, Octa Partners, and Nano Club. These names represented different iterations of the same alleged multi-level marketing scheme, characterized by continuous rebranding as Octa Partners collapsed and rebooted under various titles, each offering its cryptocurrency to investors.

According to Norwegian newspaper DN, one person charged is Terje Hvidsten, a former art dealer with previous fraud convictions, currently imprisoned for another serious fraud. Another accused, Dag Hætta (formerly Verner) Eriksen, also has a history of corruption and fraud convictions. The identities of the remaining two accused have not been disclosed, although one is described as a 52-year-old from Romerike and the other as a 70-year-old ex-lawyer who aided in the laundering process.

While the 52-year-old denies wrongdoing, the attorney for Hvidsten expressed opposition to the indictment’s description of him. No comments were available from the other two defendants, with the case set for trial in Oslo District Court over 60 days commencing in September.

Joakim Ziesler Berge emphasized that the case illustrates the thorough investigation and prosecution of organized crime in the form of fraud and money laundering, even when victims reside outside of Norway.

A Growing Problem

Økokrim noted that investment fraud is a growing issue both in Norway and internationally, a sentiment echoed by fraud experts. Sarah Twohig, a regulatory disputes lawyer specializing in crypto fraud at multinational law firm Pinsent Masons, stated, “Investment fraud involving cryptocurrencies is increasingly common in Europe and globally.”

The latest Chainalysis Crypto Crime Report revealed high-yield investment and ‘pig butchering’ scams yield the highest returns for cryptocurrency fraudsters, with all crypto scams yielding at least $9.9 billion in on-chain value in 2024.

While crypto transactions still represent a limited share of the criminal economy, Twohig noted that cryptocurrencies offer advantages to fraudsters, including the ability to exploit their decentralized and pseudonymous nature for fraudulent activities.

Regulators are beginning to respond, as seen with the EU’s Markets in Crypto-Assets Regulation (MiCA), which aims to address emerging fraud risks by imposing strict rules on crypto-asset service providers. The EU’s new anti-money laundering (AML) package is technology-neutral, aiming to prevent the proceeds of cryptocurrency crime from being used for money laundering or terrorist financing. Twohig remarked that this will provide legal protections for both investors and businesses in the crypto space.