One of the “smartest” Bulgarian citizenship by investment schemes that may be considered to be a scam
One of the smartest schemes is the so called “Hollow Egg”, which we have covered before, but are currently receiving more and more complaints from clients from around the world.
This is a very simple, but extremely smartly constructed scheme. Worst of all, it is very hard to prove it as fraudulent (from legal point of view), even though the victim is deprived of all of his money.
How the Hollow Egg scheme works
The setup requires serious resources from the perpetrators and may be therefore considered by the authorities as an organized crime. The organizers are registering a Bulgarian company and are listing it publicly with the Bulgarian stock exchange. The company receives an ISIN number and is available for trading.
Luring the victims
Then the perpetrators lure foreign victims (most often Chinese / Hong Kong, Russians and residents from the Gulf countries) by promising them to arrange them Bulgarian citizenship in return for an “investment” in the registered company. The minimum investment is one million Bulgarian Leva (512 000 EUR), but often goes far beyond this amount. Often, the victims don’t even pay the whole amount, but still receive certificates, stating that the whole investment has been done properly.
The false promises
In order to lure the victims to buy the shares of the said company, the perpetrators usually declare that the company will be developing serious infrastructure in Bulgaria. Most often these project are “promised” to be marinas at the Black sea or smart cities around Sofia or Plovdiv. Nothing like that ever happens of course.
Another trick that is used by the perpetrators is to make a promise that the company will distribute dividends or even that it will buy-back its shares. The catch is that this is promised to take place after, most often, 5 years (sometimes even more). The purpose of this promise is to prevent the victim from taking any legal actions until the term expires. Sometimes this is also enough for the criminal deed to expire too, so the perpetrators can’t be put on trial as per the Bulgarian penal code. Smart, huh?
The horrible end of the game
Bulgarian citizenship will be never granted
The result of these schemes is horrible, only for the victim of course. First of all, the citizenship applicant will never be approved for Bulgarian citizenship. Most of the time, the legal reason will be quite trivial. The organizers will even offer legal assistance to the victim in order to file claims with the Court against the visa/residence/citizenship refusal. This is done in order to cement the whole claim as being perfectly legal. And it is, if we read the whole story as the devil reads the Bible. Most often of course, the victim will even pay, through the perpetrators, for the lawyers assistance for the appeals.
But in all cases, whatever happens, the national security services know about these schemes. Therefore they will NEVER approve the citizenship applicant’s application. The national securities services often pass on a report to the prosecutor’s office about the suspicious investment, but without the victim’s input, the police and the prosecutor are with their tied hands.
The money is gone – empty, nil, zero, a hollow egg is what is left
By the time things get ugly, the company is long been emptied of all of its assets. The victim is left with his share ownership of an empty egg. He will get nothing, but empty promises. At certain time, even the emails from the organizers will stop coming.
During the time of the scam, the company will usually change its management to people from India, China or other far-away countries that are hard to get for the Bulgarian police.
And that’s it folks – game over.
The Stockholm syndrome
We have had many clients who have been burned in similar schemes. Most of them didn’t even want to file claims with the authorities. Is that the Stockholm syndrome? Or is it a psychological phenomenon when one doesn’t want to believe that he has been scammed? We don’t know.
If you are a victim of such scam, we urge you to contact VD&A, who can do miracles to get things straight for you.