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Where Action Fraud fails, victims of cryptocurrency scams prosper


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    Fraud victim Stephen Johnson found it impossible to get the police interested in his case.

    “I went to the police station in Middlesbrough and didn’t even get through the front door,” he said.

    “I pressed the buzzer and they asked what I wanted, I told them and they said I had to contact Action Fraud.”

    Who proved equally unhelpful.

    Stephen was in a group of cryptocurrency investors who had been fleeced by the same scammer they met on Facebook and together they pooled their evidence on the crook.

    “We passed a 700 page report to Action Fraud but eventually got a notification saying they didn’t have enough evidence to act on,” he said.

    “All I got was a leaflet about a help group.

    “I didn’t want counselling, I wanted my money back.”

    So the group took matters into their own hands and achieved what Action Fraud could not - in a private prosecution they got the man they first knew as Danny Turner convicted of fraud.

    Turner billed himself as a cryptocurrency expert who could help people mine Bitcoin, later offering tips about investing in different coins, and moving the conversation from Facebook to Telegram.

    “He came across as knowledgeable and likeable,” said Stephen.

    “He would put signals out about when to buy a coin and when to sell.

    “Most of them worked pretty well although by the time you got some signals to buy at, say, 50p a coin, it was already at 60p.

    “Some signals lost value but we used a stop-loss so you never lost everything.”

    Then Turner claimed to have developed two automatic trading bots that were making a fortune by cashing in on price movements that were too quick for most human traders to exploit.

    “Initially each of us would put in 0.1 of a Bitcoin, with ten people making a whole Bitcoin, which he would match with a Bitcoin of his own,” said Stephen, a 67-year-old from Stockton-on-Tees who works in the gas industry.

    “He was very good at sowing the seeds of FOMO, saying he had just a couple of slots left, you had to get in while you had the chance, before the price went up.”

    The first payout after one month was a magnificent 49% profit.

    With hindsight, Stephen said: “That was the sprat to catch the mackerel.”

    He bought more shares in the bots but before the second payout was made, Danny vanished, erasing his online presence.

    Crook posted picture of himself counting cash

    Another investor was Marjorie Wilhelm from British Columbia, Canada.

    “This was a long grooming process,” she said.

    “I met Danny Turner online in 2017 and it wasn’t until around September 2018 he said he was running this trading bot and was making $10,000 a day.

    “He billed it as a community, saying ‘let’s do good for each other’.”

    He backed up his claim to be raking in cash with pictures of himself travelling the world and counting money.

    At least 130 victims globally were taken in and invested 30 Bitcoin, worth almost £700,000 at yesterday’s price.

    Investors Stephen Johnson and Marjorie Wilhelm

    It so happens that Marjorie and her husband run an investigation agency and they discovered that Turner was really Doede Osman Khan from a village called Loggerheads near Market Drayton in Staffordshire.

    After just five days they reckoned they had found him, though further work was needed to confirm this.

    A key part of the jigsaw fell into place when they found online sales details of a house on the market in Loggerheads and the distinctive flowery wallpaper in one room matched the wallpaper behind Khan in one of his online videos.

    Khan had insisted that members of the group went through him and didn’t talk to each other - with hindsight, it was a tactic to prevent victims later joining forces.

    Marjorie had ignored this and had the contact details of some other victims, who in turn knew some more, and together they formed a group that put together the extensive report identifying Khan that was sent to Action Fraud.

    She was devastated when they refused to act.

    “I could not admit how down I was because I felt that I had to lead the group and didn’t want to let anyone down, although some days I wanted to cry, so I said we have to find another way.”

    Stephen said: “I’m disgusted with Action Fraud, I think they’re a waste of time.”

    The breakthrough came when he found a local firm of solicitors, Watson Woodhouse, to help them with a private prosecution.

    It was a long process and hugely stressful - at one point Teesside magistrates threw out their case and only reversed this decision after the group prepared an appeal.

    The case was listed for a two week trial at Teesside crown court with four prosecution witnesses including Stephen and Marjorie who had flown from Canada.

    On the morning of the trial Khan, 50, pleaded guilty to fraud charges, but only concerning these four and none of the other victims.

    “When the charges were read out the four of us were holding hands,” said Marjorie.

    “The whole time he refused to look at us. When he walked four or five feet in front of us to get out he pretended to be looking at his watch.

    “There was no remorse.”

    He was given a 15 month jail sentence suspended for 18 months, a four month curfew, and 250 hours unpaid work. The group is now pursuing a Proceeds of Crime claim.

    Stephen reacted: “I think it might have been better if it had gone to trial, we might have got a better result than 15 months suspended, but we’ve got a result and can go forward and look at getting compensation.”

    After the hearing their solicitor at Watson Woodhouse, Bethean McCall, said: “Private prosecutions offer a lifeline to those who feel as though they have hit a dead-end with Action Fraud and the police, irrespective of the alleged offence.

    “I am delighted that we were that lifeline for so many investors around the world.”

    Marjorie’s advice for anyone in a similar predicament is: “Keep going until you get the result you want, there’s help out there, you’ve got to find the people who listen to you.”

    Action Fraud were approached for comment.

    You can contact me at [email protected]

    Sources


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