The WCA International case: Six thousand victims and a fraud of 2.1 billion crowns!
Police have initiated prosecution in the case surrounding the investment company WCA International. One individual and one company are accused of fraud amounting to approximately 2.1 billion Czech crowns, with over six thousand affected clients. The company, owned by entrepreneur Matouš Polák from Frýdek-Místek, is now bankrupt. The perpetrator could face five to ten years in prison for the extensive fraud. The case is being overseen by the Olomouc District Public Prosecutor’s Office, and the accused remains at large.
Investigators stated that the company offered the public investments in its products, promising returns through investments in currency pairs, global indices, commodities, precious metals, and bonds of significant companies or startup and technological or manufacturing projects.
“After extensive investigation, including the evaluation of tens of thousands of banking and other pieces of information, the detectives concluded that the organizer of this criminal activity did not engage in investment activities to the extent that could bring returns to the declared clients,” said Jaroslav Ibehej, a spokesperson for the National Center Against Organized Crime (NCOZ). He added that the organizer instead used a significant portion of the deposits for personal use, including the purchase of property in the United Arab Emirates, luxury vehicles, motorboats, silver ingots, phones, and also to cover operational costs of the trading companies he controlled. The police also claimed that he paid extraordinary bonuses to financial intermediaries who brought investors to the company.
According to the police, the organizer’s intention was to keep the entire system operational for as long as possible, and his activities resembled a so-called Ponzi scheme. The principle of such fraud, also known as an airplane or pyramid, lies in investors entrusting their money to an investment fund with the prospect of high returns, but instead of investing, the fund operator keeps the money and pays out only a portion to some investors as alleged profits to lure in more clients. When the fund runs out of money, it collapses. The company was declared bankrupt by a decision of the Prague Municipal Court in February of last year. In September, creditors voted for a reorganization solution for bankruptcy.
The State Attorney expressed concerns that the debtor may pursue dishonest intentions with the reorganization proposal, seeking to prolong the insolvency proceedings and transfer assets from the closely linked company WCA Holding, where hundreds of millions of crowns from investors were directed. The Association for Transparency of the Investment Market previously stated that WCA was an alternative fund. Although these funds are registered by the Czech National Bank, it does not oversee their activities. Alternative funds are not allowed to offer their services and products publicly and should target qualified investors. However, WCA’s typical investors were often elderly people. One of the creditors of the fund is also the municipality of Modrava in the Šumava region, which invested hundreds of millions of crowns into it.
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