A coordinated operation by law enforcement forces across Italy executed a court order for confiscating assets worth approximately €400 million ($433 million) belonging to an iGaming operator registered in Malta. This action follows Italy’s intensifying efforts to counter organized crime infiltration in the online gaming and betting sectors, curbing corruption and money laundering operations.

The Organization’s Reach Extended Across Europe

An international investigation revealed the offending operator’s ties to a sophisticated criminal system engaged in running black market online gambling operations. The organization’s headquarters was in Italy’s Reggio Calabria region, but it projected its influence abroad through companies with offices in Malta, Romania, Austria, and Spain. Such illegal operators can be very damaging, offering virtually zero customer protection or responsible gambling safeguards.

The operator used a so-called “cascade” system, enabled through contacts with criminal organizations. These elements provided protection and helped popularize the brand online, while local businesses facilitated the illicit collection of proceeds, with a share going to the criminal entities. This arrangement was used to launder significant sums and would have continued expanding.

The group avoided detection by transferring most proceeds from illegal activities abroad, evading Italian tax authorities. The unnamed kingpin at the center of the investigation held a prominent position in the Malta-based company. However, the operator primarily targeted the Italian market via multiple outlets dedicated to betting and games of chance, obscuring its involvement.

Gambling Companies Remain Susceptible to Criminal Influence

Authorities learned of this organization after an investigation into links between businesses and organized crime revealed that the crime boss at the center of the operation held assets that did not align with his declared income. This discrepancy allowed the court to issue a seizure warrant on the suspect’s assets, followed by a second order to seize all assets linked to three connected iGaming companies.

The estimated total value of the seized assets is roughly €400 million. The court also decreed special surveillance of the suspect for two and a half years, ordering him not to leave his municipality. This development highlights a milestone success for Italy’s financial police and Public Prosecutor’s office as the offending operators will no longer threaten the safety of Europeans.

The online gaming and betting sector, often susceptible to criminal infiltration and money laundering, continues to face scrutiny as law enforcement works diligently to curb corruption. Italian authorities have substantial experience uncovering gambling-related crime, but the extensive reach of such illegal networks makes lasting progress difficult. Hopefully, the investigation will provide sufficient evidence to target other such enterprises before they can do much harm.

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The Lazarus Group, notorious for its cyber attacks and believed to be linked to North Korea, is under the spotlight once more after a high-profile Australian-based casino was hacked.

This Lazarus Group allegedly pilfered $41 million in digital assets from the cryptocurrency casino and sports betting website Stake.com, as disclosed by the FBI on Thursday.

Stake.com, endorsed by celebrity Drake, previously labelled the incident as a series of transactions as “unauthorized transfers.” In the wake of this cyber onslaught, they quickly informed their user base that an in-house investigation was being initiated.

Detailing its findings, the FBI released addresses of numerous digital wallets suspected to hold the stolen funds. The bureau shared that the Lazarus Group meticulously moved the stolen cryptocurrency through various platforms.

The Lazarus Group’s modus operandi appears consistent with their prior activities. The FBI highlighted the parallels between this heist and other recent significant thefts. Notably, they reportedly pilfered $100 million from Atomic Wallet in June, followed by a staggering $60 million from Aplhapo and CoinsPaid projects in July.

Their illicit activities have caused significant disruption in the crypto landscape. The analytics powerhouse, Elliptic, announced in June that the Lazarus Group’s cumulative thefts amounted to an astronomical $2 billion in digital assets.

In an alarming disclosure last year, the US Treasury Department connected the dots between the Lazarus Group and a $622 million hack. This exploit targeted the Ronin Network, an Ethereum sidechain instrumental for the crypto game Axie Infinity, marking it as one of the grandest digital heists ever.

The Lazarus Group has continuously evolved its tactics to stay undetected. Its interactions have significantly affected Tornado Cash, a coin-mixing protocol. Touted as a privacy-centric tool by its proponents, Tornado Cash fell under the scrutiny of the Treasury Department. Last year, it faced allegations of aiding in the laundering of a whopping $7 billion in cryptocurrency.

Upholding these restrictions, a federal court in July deemed the usage of Tornado Cash illegal in the U.S. Furthermore, the U.S. Justice Department made a significant arrest in August, detaining one of the co-founders of the protocol.

Roman Storm, the arrested individual, now faces a slew of charges. These include conspiracy to commit money laundering, transgressing sanctions, and orchestrating an unlicensed money-transmitting operation.

Stake.com was founded by Australian entrepreneur Ed Craven with it quickly becoming one of the biggest crypto gambling websites that accepts sports bets and allows casino play.

Despite Stake.com having an office in Melbourne, the casino site is not accessible to Australians, with real money casinos generally homed overseas because there are no local licenses available.

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PAGCOR, the country’s regulator, has conducted a series of operations that have focused on clamping down on such activities, with the latest taking place in Las Piñas City in Metro Manila where the Philippine National Police raided a business and ordered an offshore gaming service provider to stop business with immediate activity.

Clamping Down on the POGO Sector Harder

According to a statement issued by authorities and cited by local media outlets, the business in question has to do with Xinchuang Network Technology, Inc. The business is allegedly involved with what the regulator and police suspect is both human trafficking and cryptocurrency scams.

The latter usually takes place in the form of “pig-butchering scams.” In those cases, a victim is approached by a pretend romantic partner. The fake partner continues to ask the victim for money until they cannot pay any longer. PAGCOR said that it had been tipped about the potential offenses and had surveilled the company’s offices for a month before conducting an operation last week.

The operation was a success with police authorities retrieving a staggering number of people – some 1,534 nationals hailing from the Philippines and 1,000 nationals from the region, including countries such as Singapore, Taiwan, China, Vietnam, Indonesia, Malaysia, and Thailand. The country has had more than 41,000 illegal arrests in 2023 so far.

During the raid, authorities seized a number of electronic devices and documentation owned by the company and potentially used in the purported scams. PAGCOR chairman and CEO Alejandro H. Tengco welcomed the efforts of law enforcement and his own colleagues.

“As we have always said before, PAGCOR will not hesitate to impose sanctions on erring licensees and accredited service providers,” H. Tengco said.  The official said that PAGCOR will continue to work actively with authorities and police to ensure that its businesses are protected.

POGOs, an Ongoing Apple of Discord in the Region

The series of recent regulatory moves have to do with a toughening on the overall stance into Philippine Offshore Gaming Operations or POGOs which have been coming under a lot of heat from the regulator, but also regional countries’ governments, most prominent amongst which has been that of China.

The Philippines was recently associated with an illegal gambling website which has opportunistically stolen the domain name that was originally intended to celebrate American history in the United States but was hijacked and used to promote dangerous gambling operations instead.

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