Disclaimer: This press article by EnvionWatch (@EnvionWatch) is investigative journalism to expose one of the biggest crypto scandals in Germany. All information in this article was legally obtained from anonymous sources whose credibility has been verified and established beyond doubt. Freedom of the press and protection of sources are constitutionally protected in Art. 5 para. 1 and para. 2 GG as well as by Art. 10 para. 1 sentence 2 ECHR.
Berlin. The turn of the year marks the fifth anniversary of the Envion ICO scandal. A total of 100 million euros is at stake, raised from over 30,000 investors from Germany and around the world. A German team in Berlin, via a public company in Switzerland, promised a secure investment, advertised a patent and legal compliance. Unfortunately, the reality turned out to be quite different. The patent did not exist, the ICO was illegal and criminal backers cling to the investor money. The Handelsblatt, FinTelegram and EnvionWatch reported about this issue several times.[1]
Transparency and justice are progressing only slowly: Numerous aggrieved investors filed criminal charges with the Berlin public prosecutor’s office for fraud, embezzlement, and money laundering. Dozens of investors sued the hidden mastermind Michael Luckow and his Trado GmbH before the Berlin Regional Court for prospectus fraud and were regularly and successfully awarded damages. Nevertheless, aggrieved parties and courts are still struggling to come to terms with the situation, and the appointed liquidator is trying to recover misappropriated crypto assets and ICO data.
To this day, key questions remain unanswered: What happened to the missing Envion millions? What did the public prosecutor’s office in Berlin investigate and do about it? EnvionWatch has obtained extensive new evidence from an anonymous source, verified its credibility, and carefully analyzed its contents. Here we now exclusively present these new findings and evidence, which shed light on the missing millions as well as on the prosecution’s failure of justice.
Misappropriation of Envion investor funds
It is now on the record that Michael Luckow decided during the ICO to redirect millions of Euros of Envion investor funds to his private accounts, rather than the intended Envion AG accounts. This is criminal conduct from several points of view. Michael Luckow and his Trado GmbH already deceived investors by conducting the entire ICO in the background while keeping themselves hidden, without any mention in the prospectus. Then, Luckow embezzled over 500 Bitcoin and 9,000 Ether, whose value is to be estimated between 10 and 18 million euros, depending on which exchange rate is used as a basis.
It is highly problematic that investor funds ended up in Luckow’s private accounts instead of those of Envion AG, in which the investors invested. Shortly after the ICO, i.e. in early 2018, Envion demanded Luckow to immediately send the misappropriated crypto assets and prohibited any actions on Envion’s behalf. An injunction was obtained, and lawsuits were filed against Luckow and Trado.
As is now evident from extensive documentation, despite the legal proceedings, Luckow evidently sold the crypto, then moved, disguised, and laundered the proceeds. As Luckow’s financial transactions show, unusually large amounts of money went in and out of his private accounts during and immediately after the Envion ICO, i.e. between December 2017 and September 2018. The usual transfer amount before the ICO on his accounts were typically a few hundred euros, but suddenly ballooned to 5- and 6-digit amounts.
These high incoming payments, typically from crypto sales, are quite obviously the misappropriated Envion investor funds. To the utter disappointment of all Envion investors, these assets are now missing from the liquidation estate, which bears the risk that all investors and creditors will be harmed once again by a lower liquidation quota. How much money did Luckow illegally siphon from the Envion ICO? How many of the missing millions can be returned to the Envion liquidation estate?
Over 8.3 million euros in Luckow’s private accounts
During and immediately after the ICO, there were exactly 175 transactions larger than 15,000 euros in Luckow’s private bank accounts, some as large as 250,000 euros. The transfers from and to dubious crypto exchanges amount to a total of over 8.3 million euros. These amounts are quite obviously misappropriated/embezzled Envion investor funds. These should never have reached Luckow’s private (!) accounts legally, as they were always addressed to Envion AG. Instead of handling the funds properly via an Envion business account, Luckow transferred only a fraction, 250,000 euros, to Envion.
Instead, around 8 million euros went to various other bank accounts of Michael Luckow or persons and companies controlled by him (see illustration). The bulk, 6.8 million euros, went to Trado GmbH, managed by Michael Luckow. How much money was spent or how much was set aside? For lack of clarification, the investors unfortunately further remain in the dark regarding to what happened with their money. For sure, there was neither authorization of Envion nor legitimate invoices in approximate amounts. Another 550,000 euros went to an intermediary (more about this later), 330.000 euros were moved to unknown persons via the payment function ‘Send money to friends’, and 100.000 euros went directly to another bank account controlled by Luckow.
The following is an overview of the money flows. At the top, in blue, the legal money flow, from investors to Envion AG. Red marks the embezzlement of Luckow, and the transfers in yellow mark the money laundering at home and abroad (picture right).
Luckow’s Man-in-the-Middle Attack
How could funds from Envion investors get into Luckow’s private account? This cannot be explained legally, because Luckow was not mentioned anywhere in the Envion prospectus or on the company’s website. He was the hidden mastermind in the background who, according to Swiss authorities, ran the ICO in the shadows. Since he alone controlled the keys to Envion’s crypto wallets, he was able to fork out amounts at will, similar to a man-in-the-middle attack. He illegally inserted himself in the middle of the payment flow between senders and recipients, i.e. on the one hand the investors who addressed their money to Envion, on the other hand Envion AG, which was supposed to receive the funds.
The missing 8.3 million Euros approximately match the amount of the embezzled Bitcoin and Ether which is currently being claimed by the Swiss liquidator via a lawsuit at the Berlin Regional Court. Whether these millions are lost forever for the liquidation, or whether Luckow and Trado can be held liable are the subject of further court dates in 2023.
Money laundering and concealment
Michael Luckow’s private accounts not only received conspicuous amounts of money during and immediately after the Envion ICO, but also issued many dubious transactions suspicious of money laundering. Of the 175 transactions over 15,000 euros, 41 transactions in the amount of 50,000 to 100,000 euros were made via the unknown and exotic trading exchange Quoine Corporation, which is internationally suspected of money laundering.[2]
Similarly, there were unusual and large transactions between Luckow and seemingly independent intermediaries. In early 2018, Luckow sent a total of 555,000 euros in three transactions to a Jan-Tobias Hensel. Subsequently, these funds partially flew back to other accounts of Luckow in multiple small batches of about 17,000 euros. Moreover, chunks of 250,000 euros transactions disappear in dubious companies like MOGW Energy Trade (Portugal) and Crypto SP (Poland), which operated money laundering on a grand scale.[3]
These 555,000 euros are obviously Envion investor funds, laundered and concealed. This raises further questions: How much of the laundered and concealed funds can still be found and attributed to the Envion liquidation estate? What is the Berlin public prosecutor doing with such clear evidence?
A Berlin judicial scandal
Despite the overwhelming burden of proof, the Berlin public prosecutor’s office has so far completely failed to duly investigate and prosecute the crime. There is either a fundamental lack of will, ability and/or capacity. Unfortunately, according to the files, key questions and investigation responsibilities have been lazily and inefficiently shuffled around between prosecutors, police and experts for many months
Other significant criminal accusations, including the embezzlement of over 500 Bitcoin and 9,000 Ether, were never sufficiently investigated. How can a prosecutor’s office ignore it when a hidden mastermind of a scam crypto ICO channel millions of Euros of investor funds to his private accounts? Is it really so easy to embezzle, launder and conceal large amounts of money directly under the eyes of the authorities in Germany? Such questions are being asked by thousands of aggrieved international investors and creditors who are in disbelief of the utter inaction of the prosecuting authorities.
It is also a scandal that the public prosecutor’s office has never contacted any of the aggrieved parties or complainants for further information. The prosecution’s record is proof of poor performance:
- Aggrieved parties contacted: 0.
- Criminal complaint filers contacted: 0.
- Secured assets: 0.
- Arrests: 0.
- Accused: 0.
After Wirecard, it is once again another significant financial scandal in Germany, this time – embarrassingly – for the inactive and oblivious Berlin law enforcement authorities. If you steal a few bottles of wine in Berlin, you will certainly be arrested; if you embezzle several millions in a semi-smart way, the public prosecutor’s office will seemingly throw up their hands and let it go, as they are incapable of grasping even the easiest of criminal techniques.
Can one of the biggest German crypto scandals really disappear in a thick pile of files and with it the missing Envion millions forever? Or will the Berlin public prosecutor’s office finally make a move to bring the fraudsters to justice?
– END –
[1] See https://envionwatch.medium.com, https://fincrimeobserver.com/?s=envion and www.handelsblatt.com/finanzen/maerkte/devisen-rohstoffe/virtueller-boersengang-erstes-urteil-im-envion-skandal-hintermaenner-muessen-anleger-entschaedigen/25984412.html
[2] Quoine money laundering accusations: www.coindesk.com/markets/2018/06/19/major-crypto-exchanges-face-action-over-money-laundering-fears/
[3] MOGW Energy Trade (Portugal) und Crypto SP (Polen) money laundering accusations: www.theblock.co/post/22413/the-bitfinex-ieo-how-did-we-get-here
