Big Win: How Milton Group Fraudsters Continue to Deceive People Using War as a Cover
Two years ago, a series of stories was broadcast across many foreign and Ukrainian media outlets investigations The activities of a large financial pyramid operating in Kyiv are revealed. Under the guise of "traders," the scammers defrauded people of at least $70 million in just one year. What happened to Milton Group, which came under the scrutiny of European journalists and law enforcement agencies after its exposure, and why the scammers only intensified their activities after Russia's full-scale invasion of Ukraine—read more in this article. RBC-Ukraine.
Milton Group was founded in Israel in 2016. A year later, after the country's authorities banned such fraudulent organizations, the businessmen relocated to Kyiv, opening an office in a prestigious shopping center in the heart of the capital—the Mandarin Plaza. Officially, the company operated in financial services and IT.
In fact, more than 200 employees offered European retirees "profitable investments" in cryptocurrencies and stocks, such as CryptoMB, Cryptobase, VetoroBanc, or Virtual Stocks3.
Each company employee had a monthly target, for which they received bonuses. For example, the Russian-language department had to raise $40,000, the Spanish-language department $60,000, and the English-language department $100,000.
On average, salespeople made 250-300 calls per day, spending at least three hours with customers. Employees were required to demonstrate sales figures of at least 40% of the target, or they were fired.
As the Ukrainian editorial staff of AIN discovered, bank payments were accepted through the British operator Clear Junction Ltd. This company registered its payment system in Ukraine and also provided Euro accounts for Monobank. It is owned by Dmitry Katz, who also has a Ukrainian business.
Overall, if you didn't know what the company actually did, everything looked quite decent from the outside: a presentable office, modern equipment, customer interaction systems, bonuses, and high salaries.
In reality, things were (and remain) quite different. Milton Group employees defrauded thousands of people from more than 50 countries. In 2019 alone, the organization swindled more than $70 million.
Milton Group's office is located on the top floors of the Mandarin Plaza shopping center (photo: occrp.org)
"The (most) unprofitable offer" from Milton Group
In 2020, journalists from the Swedish newspaper Dagens Nyheter investigated the Milton Group's activities from the inside, using an informant planted within the company.
As it turned out, the employees' scheme was identical in each case. It all began with the "victim's" simple interest in cryptocurrencies and other trendy ways to make money.
Some victims report clicking on Facebook ads featuring celebrities who had made large sums of money in cryptocurrency or stocks. They were then redirected to third-party websites featuring dubious stories from these same celebrities. In addition to social media, mobile app ads were also used to attract new clients.
After victims provided their information, they received a huge number of calls. The scammers convinced the victim to invest a small amount of money (approximately 1,000 Swedish kronor) and offered to download special software onto their computer so that the "financial assistant" could remotely manage all the technical components. After a while, the assistant asked the victim to log into their bank and show their accounts.
At this point, the victims lost control of the situation. After a short time, their investments began to grow at an incredible rate. Often, the victims didn't understand what was happening. What was happening was this: the scammers were helping the client trade on one of their platforms, demonstrating the authenticity of the transactions and large (fake) profits. Meanwhile, the scammers themselves, using remote access, were taking out short-term loans in the victim's name at enormous interest rates (up to 39%). When the victim tried to cash out their earnings, nothing happened.
When the situation escalated, "rescue scammers" stepped in. They told victims their funds had miraculously been found. But to receive the money, they had to pay a fee and taxes. Naturally, after payment, the victims received no refund.
Fraudsters can create fake accounts that supposedly show how victims' investments are growing (photo: dn.se)
According to journalists, the scammers' main goal was to "sell emotions, not a product." Since most of the victims were retirees, the scammers emphasized open communication: they inquired about their lives, asked for advice, and offered to teach them new skills.
Former Milton Group employees openly admit that the company sells binary options and other fake assets. Some of the victims, identified by Swedish journalists, lost over $200. According to investigators, the Kyiv office may have earned the scammers over $200 million in total. Remarkably, the scammers did not target residents of the United States, Japan, Canada, or Ukraine.
Who is behind the Milton Group scheme?
Key positions in the company are held by Georgians. Some of them are former Georgian officials previously accused of illegal activities.
Milton Group's sole official beneficiary is Georgian Irakli Dadivadze. Dadivadze's second major business is Lime Consulting. While officially an IT project, it's actually an online casino. Lime Consulting has an office in Arena City and runs an active recruiting program, promising to help newcomers earn $2000-$3000 in the first four months.
Meanwhile, journalists identify David Todua, an Israeli of Georgian descent, as the real owner of Milton Group. He is associated with Mikheil Saakashvili's United National Movement party.
Todua owns the Cypriot payment company Naspay, through which much of the funds were processed. He also co-owns several Ukrainian companies with David (Davit) Kezerashvili, former Minister of Defense and Director of the Georgian Financial Police. In 2013, Kezerashvili was accused of accepting a $12 million bribe for turning a blind eye to the massive smuggling of alcohol from Ukraine into Georgia. He was subsequently acquitted.
One of the companies Todua co-owns with Kezerashvili, Project Partners, operates in the fields of programming and data processing. Through Project Partners, Todua and Kezerashvili also own the companies Firma Spets-Trading and, partially, Elitcomfortbud. The director of Project Partners is Gia Getsadze, a former deputy minister of justice of Georgia.
It is noteworthy that Getsadze held the same position in Ukraine until 2018. Elitcomfortbud is co-owned by Petr Tsiskarishvili, Georgia's Minister of Agriculture under Saakashvili and one of the leaders of his United National Movement party, as well as Ivan Mosashvili, a member of Mikheil Saakashvili's Movement of New Forces and a candidate for parliament.
Why are scammers free?
Around 20 organizations and publications in various countries investigated the Milton Group's activities. Among them were the Spanish police, the Swedish police, the Ukrainian investigative outlet Slidstvo.info, one of Israel's largest online publications, The Times of Israel, the Monitore studio (Georgia), the Swedish newspaper Dagens Nyheter, KRIK (Serbia), the Czech Center for Investigative Journalism Investigace.cz, and the international organization OCCRP.
In Ukraine, law enforcement agencies became interested in Milton Group's activities in May 2018. The Security Service of Ukraine (SBU) conducted searches of the company's office, reporting the seizure of computers and documents and the opening of a criminal case. However, there is no mention of this search or Milton Group in the court registry.
In early March 2020, Swedish Foreign Minister Ann Linde called on Ukrainian authorities to investigate Milton Group's fraud. Furthermore, Swedish police contacted Europol to conduct an international investigation.
According to RBC-Ukraine, the company remains headquartered in Kyiv. Moreover, the scammers haven't even moved their office, continuing to rent space in Mandarin Plaza and Arena City. For organizations like Milton Group, the war has become a convenient backdrop, as virtually the entire security apparatus is engaged in protecting the country's territorial integrity, unable to fully investigate and prosecute the fraudsters.
RBC-Ukraine submitted an information request to the National Police, the Security Service of Ukraine, and the Bureau of Economic Security, asking whether any cases have been opened against Milton Group in Ukraine.
This impunity also allows scammers to open new call centers in other countries. Specifically, Milton Group has "representative offices" in Albania, Georgia, and North Macedonia, albeit under a different brand. According to employees, the company also opened an office in Russia. The company still employs hundreds of people.
In any case, until Ukrainian law enforcement identifies the perpetrators of this fraudulent scheme, the company, which is implicated in criminal proceedings in several EU countries, will continue to operate in Kyiv as if nothing happened, seriously tarnishing Ukraine's image in the eyes of Europeans. This is especially damaging given Ukraine's potential EU candidate status in June.
Skelet.Org
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