A digital payments platform owned by a well-connected Cambodian tycoon has featured in a probe by the U.S. Federal Bureau of Investigation into an alleged Ponzi scheme worth half a billion dollars.
The FBI says the platform, Connectum, provided banking facilities that allowed accused fraudsters to steal $150 million from unwitting victims, according to search warrant applications recently obtained by RFA.
Though it has not been charged with a criminal offense, the FBI’s investigation suggests the continuation of problems that have been plaguing Connectum since at least 2021, when RFA first disclosed that the firm had been identified in an Austrian police report as having handled more than $8 million of fraud proceeds.
A licensed British financial institution, Connectum is a payments processor for online businesses, acting as an intermediary between its clients, their customers, and banks and credit card companies. In 2020, it was purchased by Heng Sokha, the wife of a retired senior Cambodian government official.
According to court papers obtained by RFA, Connectum allegedly provided banking facilities to accused international fraudsters over several years from 2015 to 2019, with “large sums” of the supposedly fraudulent funds said to have moved through its accounts.
An affidavit sworn in September 2024 by FBI Special Agent Andrew Cropcho revealed that U.K. bank records showed victims sent “at least $150 million” to a Connectum account used by the alleged fraudsters. The victims were Americans, so the F.B.I. opened an investigation into companies involved. The funds were remitted by customers of Hashflare, an Estonian company whose owners are currently on trial for fraud and money laundering. They have denied wrongdoing and have described Hashflare as a “legitimate and revolutionary business” providing facilities for remotely mining cryptocurrencies.
U.S. prosecutors allege that the majority of the supposed crypto mining was faked, rendering it a half-a-billion dollars Ponzi scheme. A U.S. Justice Department spokesperson told RFA they were unable to answer specific questions as the case is ongoing.
Even though the alleged fraud occurred before Heng Sokha bought the platform, the revelations add to the woes of a company whose British license was recently pulled.
In May 2024, the U.K. financial regulator, the Financial Conduct Authority, or FCA, ordered Connectum to cease operations as a digital payments facilitator and return all client funds. No reason for the suspension was given and the FCA declined to give further details.
Experts say that measure is indicative of serious failings within the company, which they say is unlikely to be allowed to resume operations under its current management or ownership.
“The current owner is not going to get anything back and the directors probably won’t be allowed to work in financial services in the U.K. again,” Ian Tyler, a British financial expert who has held senior positions at several large banks, told RFA.
Connectum’s activities have technically been suspended as the result of a “voluntary undertaking” between it and the FCA But, according to Tyler, “there’s nothing voluntary about it,” explaining that failure to enter into the arrangement would have led to Connectum’s license being withdrawn, rendering its operations – were they to continue – outright illegal. As it stands, Connectum has not been processing payments since the suspension. “The business has effectively been closed.”
Heading up Connectum’s response to the crisis is company director Ivan Leonidov. The Moscow-trained British lawyer declined an interview request in October 2024, saying in an email: “At this stage I can state that Connectum takes its regulatory obligations seriously and is dealing with the requirements imposed.”
He asked that RFA submit its questions in writing, but did not reply to the submitted questions.
Heng Sokha did not respond to requests for comment.
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When Connectum founder Edgars Lasmanis sold the company to Heng Sokha in 2020, it was – to judge by its annual accounts, at least – a thriving enterprise. But from a back-of-the-envelope RFA analysis of its balance sheets, it appears much of its profits at that time stemmed from clients’ alleged illicit activities. Now, said Tyler, Heng Sokha will be lucky to walk away with even her initial investment.
Lawyers for Lasmanis threatened legal action in 2021 after RFA contacted the company seeking comment on police and banking records showing the company handled $8 million of fraud proceeds between 2017 and 2019. Emails obtained by RFA at the time showed Connectum executives continued to handle these payments despite warnings from U.K. regulators.
Anti-corruption campaigners have long lamented that Britain’s financial crime agencies and regulators are massively underfunded in comparison to the outsize role the City of London plays in the global economy. It’s against this backdrop that fraud has reached epidemic proportions, becoming the U.K.’s most common crime, while the number of convictions collapsed by three quarters from 12,378 in 2012 to 3,455 in 2022, according to Ministry of Justice figures.
In 2021, RFA shared with the FCA its findings that millions of dollars of fraud proceeds had passed through Connectum’s accounts. As now, the regulator declined to comment on individual cases. However, the fact that it took three years before the FCA took action raised eyebrows for Pav Gill, a lawyer who worked for the beleaguered European payment services provider Wirecard before blowing the whistle on its fraud and money-laundering.
“If there’s serious issues that are being flagged on an urgent basis then they should take action right away. Three years is just ridiculously long,” Gill told RFA.
Heng Sokha— as someone who is married to a former secretary of state — is what’s known in compliance jargon as a politically exposed person, or PEP. Because PEPs have the potential to abuse their positions for profit, banks and other regulated bodies are required to be extra vigilant when doing business with them.
The FCA should have been carrying out enhanced due diligence on Connectum when it was taken over, according to Gill. If, as the FBI allege, Connectum was laundering hundreds of millions of dollars for fraudsters, Gill questioned how the regulator did not detect that during its checks on the company.
“It should have definitely been flagged,” Gill said. “I don’t know what happened in that process, but it’s kind of obvious that they should have been [subjected to enhanced screening]. I mean, the new ultimate beneficial owner is a PEP and from a high-risk country as well. It’s just insane.”
Editing by Boer Deng and Abby Seiff.