Business Cheats

Forged bonds worth billions of Euros harm the world economy. A CORRECTIV investigation reveals how international fraudsters use fake German-government bonds to trick banks and clients.

von David Crawford

The Facts

  • Forged bonds worth billions of Euros harm the world economy. For example international fraudsters lease forged German-government bonds to unknowing clients. These clients then attempt to present worthless bonds as collateral for loans the banks would otherwise have declined.
  • This fraud finds victims around the world. In the cases related to the Italian Marco Russo, CORRECTIV has found evidence of fake bonds with a volume exceeding a billion Euros.
  • In China Russo allegedly defrauded businesses for 560 million Euros in counterfeited German-government bonds. For an Austrian firm he faked bonds valued at 200 million Euros; in 2009 financing for a chemical plant in Russia collapsed when a contract for 500 million Euros in government bonds proved to be a fraud. Russo and his helpers work in Italy, Spain, Switzerland and the United Kingdom. A few months ago Russo opened a new office in Hanover, Germany.

During the initiation ceremony, Marco Russo looked modestly to the ground while hundreds of brothers stood watch. Surrounded by gold and ancient walls, the otherwise gaudy businessman appeared thoughtful with big eyes and rosy cheeks. Then a proud Mr. Russo displayed his certificate to the camera: „Real Asociación Caballeros Monasterio de Yuste.“ It is one of the oldest orders of knights in Europe—even former King Juan Carlos I is an honorary member.

Later on Facebook Mr. Russo shared more than 20 photos of the event. The pictures fit in well with an endless stream of portraits of Mr. Russo in suits, on golf courses, in expensive hotels, with his business partners and with his wife, Yulia Shesternikova.

For example, pictures of Mr. Russo, meeting in February with Moscow business partners, carry the title, “Putin’s Friends.“

Looking closer, visitors to his social media pages see Mr. Russo’s wife Yulia collects money for Syrian refugees in Lebanon. In one photo she poses with an AK-47, a Russian assault rifle. Other pictures show Mr. Russo in fancy resorts in Turkey, Florence, Milan and New York.

And recently Mr. Russo has been frequenting Germany. In Hamburg, he can be seen enjoying a meal with business partners or signing a contract in an office overlooking the city. In Hanover he poses with his wife in the shopping district and at the Zoo. Near Munich he visits a lakeside hotel.

Marco Russo appears to be rolling in money. A respected man. That at least is what his business partners might think. In Milan he invites clients to a large downtown law office, with a comfortable reception area. Sometimes he drives to meetings in a Porsche.

But it is all fake.

The Milan office was mostly unused, no staff, no legal documents. In Geneva a former client said the office was covered with dust.

Marco Russo is a con man.


Marco Russo searches for social recognition to fool his clients.

Mr. Russo probably had his greatest success when he entered the Spanish congregation „Real Asociación Caballeros Monatersio de Yuste“, one of the oldest knightly orders in Europe.

Mr. Russo counterfeits bonds. His unknowing clients hope to lease these bonds as collateral for loans that would otherwise be declined. It is a business model which attracts victims around the world.

The Russo case allows a close look at a much larger global system of dirty financial transactions. The money flows across borders, through the hands of middlemen and shell companies. The helpers work in Italy, Spain, Switzerland, the United Kingdom and Germany. Their international deals appear to be completely unregulated. They found companies and close them again faster than regulators can react. The victims come from Australia, Austria, Spain, China and Germany. The losses to worldwide financial fraud are in the billions.

The Russo case alone has generated tremendous loss. In China the knight of the Yuste Monastery allegedly defrauded businesses for 560 million Euros in counterfeited German-government bonds. For an Austrian firm he allegedly forged bonds valued at 200 million Euros; in 2009 financing for a chemical plant in Russia fell through when a contract for 500 million Euros in government bonds collapsed, allegedly as a fraud.

Nobody knows the worldwide volume of losses due to financial fraud. Few of the con men are caught while some people profit: the banks, which arrange funding, and middlemen, who take a cut. And men like Mr. Russo, who charge large advance fees while arranging what prosecutors describe as crooked deals.

For Mr. Russo the deals are usually without risk. Convictions take years, and can be appealed.

Through a lawyer Mr. Russo said he is innocent of all the charges against him. The lawyer said Mr. Russo has been acquitted of some charges, while his convictions have been either overturned or are under appeal.

A team of reporters has followed the trail of loss allegedly caused by Mr. Russo and his colleagues. El Confidencial in Spain investigated his knighthood as well as other helpers in his network. In Switzerland the Tages-Anzeiger investigated the role of middlemen. Members of theInvestigative Reporting Project Italy sifted through thousands of pages of court records encompassing more than 20 years of Mr. Russo’s career. The German investigative journalist team at CORRECTIV investigated Mr. Russo’s most recent deals in Germany.

Mr. Russo is not pleased with the attention. First he threatened legal action should we expose his activities. Recently he sent his wife. The woman who posed with the AK-47. When we asked her for comment, she warned of legal consequences. Via his lawyer Mr. Russo said that the international reporters following his case have a biased opinion of him. He says many media reports cite allegations for which he has been acquitted in criminal proceedings. He hopes he won’t be tried in the media on charges for which he has never been accused.

We however choose to write about what he did say in court: how easy it was for him to counterfeit government bonds. Mr. Russo said he uses Corel Draw, a popular software for processing pictures. „Any five-year-old could do it“, Mr. Russo said.

Mr. Russo’s criminal past dates back to 1995. According to his criminal record, in 2002 he was convicted of receiving stolen goods and associating with criminals. In May 2014 he was convicted again of aggravated fraud and sentenced to four and one-half years in prison. His lawyer said he hopes to overturn the conviction, and he is aiming for an acquittal.

And while he awaits the slow legal process, Mr. Russo continues to pursue business deals—in Germany.

In Hanover Mr. Russo hopes to attract German clients to the YUMA Finance AG, according to Gennaro Piro, who has helped Mr. Russo open firms in Germany and Luxembourg. Another business partner says Mr. Russo often finds clients via a network of financial advisors, who themselves provide services in the so-called ‘grey financial market.’

Consumer advocates say potential clients for financial services should beware because while it is legal to offer financial advice, the market is largely unregulated, and poor advice can be expensive.

Mr. Russo’s method of operation can be seen in the case of the Austrian firm Trenkwalder. In 2009 the firm’s executives were searching for new cash for expansion when during a meeting in Istanbul a Trenkwalder official met an Australian businessman with a similar goal.

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Trenkwalder planned to open a waste treatment plant in Turkey. The Australian firm, Trident, hoped to buy an oil platform in Asia. But neither firm had the financial resources needed to secure a loan in the difficult economic climate; so together they developed a plan to lease collateral.

Via Turkish financial advisors acting as middlemen, the two men contacted Mr. Russo. He offered to lease Trenkwalder Royal Bank of Scotland bonds valued at 200 million Euros for use as collateral.

The deal moved quickly. Trenkwalder transferred 350,000 euros to a company controlled by Mr. Russo as security for the bonds. According to the agreement, within five days the bank would formally confirm the transaction, before Mr. Russo’s firm received a final fee of 10 million Euros, five percent of the nominal value of the bonds to be leased.

But the formal confirmation never arrived. Trenkwalder representatives pressured Mr. Russo to prove the bonds were genuine, even threatening to file a lawsuit. But Mr. Russo remained hard. „Do what you want“, he said.

Shortly afterwards, a Trenkwalder official received a phone call from Mr. Russo’s assistant, according to court records. The assistant warned that Mr. Russo knew the man’s family address, and he could expect a „visit“, according to a transcript of the allegation. Despite the warning, Trenkwalder filed formal charges of fraud against Mr. Russo.

Few of Mr. Russos victims have filed criminal charges. One victim, whose firm lost 300.000 Euros, says she decided against pressing charges to avoid the expense of retaining a lawyer for the duration of the court proceedings.

Trenkwalder and Trident join together to file a class action suit let by Claudio Loiodice, an Italian expert on money laundering. He wrote a report summarizing the allegations against Mr. Russo and filed it with the court.

Years later, in early 2014, Mr. Russo admitted in court that he forged the Trenkwalder bonds. „I never believed that these people would really pay 600,000 Euros for pieces of paper“, Mr. Russo told the court, referring to payments from Trenkwalder and Trident.

Mr. Russo also attempted to blame a Trenkwalder official, Andreas Pölzelbauer, alleging he knew the bonds were counterfeit. „Pölzelbauer said plainly, ‘you have to find a solution.’ And I did find a solution. Sorry if I laugh, but I did find him a solution“, Mr. Russo said in his testimony to the court.

For Mr. Russo, the deal was simple. Trenkwalder was a welcome victim, bringing quick cash.

And this is how it worked. More than a decade ago, Mr. Russo allegedly obtained printouts of transaction information at the central processing office for European bond transactions atEuroclear. These printouts seemed to confirm the existence of bonds which actually did not exist, according to an Italian police report.

Today everything is handled electronically, and Mr. Russo says it makes forgery even simpler. Mr. Russo told the court he could alter the image of a certificate, and manipulated the image by computer to appear genuine. According to a witness, however, Mr. Russo also had access to a Euroclear training program which allowed him to easily create documents which appear to be genuine.

Euroclear did not respond to requests for comment.

In court Mr. Russo played the clown. „These bonds never existed. I am not a bank. Where could I get such bonds?“ he said.

And worse. Mr. Russo alleged his clients silently condoned, and even profited from his forgeries. But in the Trenkwalder case, the court did not agree. „All the forged documents were created with the single intention of defrauding Trenkwalder“, the court ruled.

Trenkwalder declined to comment for this story.

Gary Bradford, the former CEO of the oil company Trident, also paid for counterfeited bonds. Mr. Russo charged Mr. Bradford 250,000 Euros in advance fees for the leasing of bonds valued at 100 million Euros, court records show. Ultimately Mr. Bradford received only a few pieces of worthless paper, and a verdict supporting his claims against Mr. Russo in the Milan court.

Battling fraud is expensive. For example Mr. Bradford together with Trenkwalder hired a former police investigator, Claudio Loiodice to present their case before the Italian court. One other fraud victim told CORRECTIV that she did not filed charges against Mr. Russo, because she was unwilling to pay the cost of representation to obtain justice in Italy.

Through a spokesman, Mr. Bradford and Trident declined to comment for this story.

Trident and Trenkwalder are among the few victims to press charges against Mr. Russo. But Milan prosecutors allege at least four other firms who did not file charges were also victimized, losing individually between 160,000 and 500,000 Euros to Mr. Russo’s frauds, according to court records. The court found Mr. Russo innocent of fraud charges related to the firms that did not file formal charges.

Nobody knows the volume of similar financial frauds. But one thing is clear: there are many more people like Mr. Russo. Sometimes they work alone and sometimes in a team. They leave behind bad loans, lost jobs, and entire firms gone bust.


Marco Russo loves to pose as a financial genius. His wife Yulia Shesternikova supports him.

In Spain for example, members of Mr. Russo’s network lured two business owners into a trap. Their construction firm, Forcusa, with a staff of more than 200 workers, needed a credit to survive. A financial advisor recommended they travel to Switzerland for a meeting in what turned out to be a dusty, almost abandoned-looking office. The businessmen had pinned their hopes on obtaining a 42 million euro loan which they couldn’t obtain in Spain. The fees were stiff—420,000 Euros up front. And even after paying the demanded fee, the partners were passed on to meetings with new middlemen in London and Madrid, where demands for additional fees were coupled with more promises.

The businessmen never received the loan, and the fees were lost. Today their firm is in liquidation with fewer than ten employees.

Mr. Russo’s largest alleged known coup had footprints in China, Spain and Germany. Suntech Power Holdings Co., the world’s largest solar-cell manufacturer, unknowingly deposited 560 million Euros in forged German government bonds, known as Bundesschatzbriefe, with a state-owned Chinese bank as collateral. The scam later came to light when a subsidiary tried to use the bonds. In civil proceedings in Singapore, Suntech accused Mr. Russo of providing the forged bonds.

The Singapore case was dropped, as part of an out-of-court settlement. But in January in a Milan courtroom, Mr. Russo admitted counterfeiting bonds in order to help people get loans.

Mr. Russo also played an important role in one of Italy’s largest political scandals, the Telekom Serbia Affair. The chief allegation at the time: politicians received kickbacks when an Italian phone company allegedly purchased shares in a Serb phone company. The smoking gun, put forward as proof of the corruption, was 120 million Euros in bribe money allegedly deposited in a Monte Carlo bank account. Investigators closed the investigation, however, after they discovered that there wasn’t any money.

All they found was 120 million Euros in bonds allegedly forged by a group of brokers which included Mr. Russo, court records show. Mr. Russo was not a focus of the investigation.

In his court testimony, Ms. Russo admitted he passed forged bonds to clients on at least ten occasions before the Trenkwalder deal. And why didn’t these clients press charges? „It was convenient for both sides,“Mr. Russo said, according to court records.

There are many such frauds that never come to light. A huge number, because there are many men like Mr. Russo who allegedly use tricks of this sort to cheat clients and garner unjustified fees.

And Mr. Russo lives well on the proceeds. He is a member of an exclusive golf club and rubs shoulders with prominent designers. He books hotel rooms for $1000 per night. After his deals with Trenkwalder and Trident, Mr. Russo bought a Porsche 997 for 150,000 Euros and a Bentley for 164,000 Euros, court records show.

Mr. Russo, a native of Florence, first came into conflict with the law as a young man charged with theft and receiving stolen goods. Later he was the manager of the Foggia Calcio soccer club and was placed under house arrest in Rome on charges of fraud and money laundering. According to his lawyer he was cleared of all related charges.

In 2002 Mr. Russo was convicted of receiving stolen goods and criminal conspiracy by a court in Pisa.

The court sentenced Mr. Russo to five years, but he was soon back on the street. Two years later police opened a new investigation related to allegations of theft and smuggling works of art but he was never formally charged by prosecutors. Mr. Russo’s lawyer says his client will be found innocent if new cases go to trial.

Despite his legal difficulties, Mr. Russo and his colleagues are preparing to do business in Germany. The tactic of changing venues after an arrest isn’t unusual, says Sebastian Fiedler, financial crime spokesman for the Bund Deutscher Kriminalbeamter, an association representing the interests of German police detectives. Fraud is big business, Mr. Fiedler says, costing victims millions of Euros each year.

To spearhead his move into Germany, Mr. Russo founded YUMA Finance AG. The registration cost Mr. Russo several thousand Euros. Then Mr. Russo increased his investment by building a website designed to attract German clients—targeting normal people looking for financial advice.

Mr. Russo has gone to great effort to set bait for his clients.

For example, earlier this year YUMA Finance AG rented a stand at a banking conference in Berlin. At the same time YUMA announced it was offering access to a German fund, without providing detailed information. YUMA later removed the offer from its website.

Three Germans helped Mr. Russo to start YUMA: Rita Herrmann, Michael Braun and the lawyer Bernd Karwiese. The latter, who is also chairman of the YUMA Finance AG supervisory board, says the founding of the corporation was perfectly normal. In an interview with CORRECTIV, he says he had no information about Mr. Russo’s criminal record when the board named Mr. Russo as CEO. Ms. Herrmann, another board member said in an interview she knows nothing about criminal activity, and she would not be liable for any damages. Mr. Braun told CORRECTIV he resigned from the supervisory board earlier this year. He said, the reason for his resignation was the lack of information he received about YUMA.

The YUMA spokeswoman is Yulia Shesternikova, Mr. Russo’s wife. In an email to CORRECTIV, she said her husband has been acquitted of all charges. Additionally, Ms. Shesternikova said her husband was convicted in 1985 in absentia, without receiving a copy of the verdict. Ms. Shesternikova says she herself is a journalist specialized in reporting on organized crime, and she will forward the lies in the CORRECTIV press query to her lawyers.

Germany’s financial oversight agency BaFin is currently reviewing activity at YUMA Finance AG, an agency spokeswoman said. The review was opened in August following a CORRECTIV press query. The outcome of the review is still unclear, the spokeswoman said.

Criminal prosecutions are difficult in financial fraud cases because there is no law against charging fees for helping clients to obtain loans. And while the counterfeiting of documents would be illegal, the services advertised by financial advisors are generally unregulated. „It is a grey area“, the BaFin spokeswoman said.

Heiko Schöneck is a financial advisor who helps German clients obtain the type of collateral offered by Mr. Russo. Mr. Schöneck says he first met Mr. Russo about four years ago when a client asked him to help find a 300,000 euro loan. Mr. Schöneck says he was introduced to Mr. Russo through another advisor, who was also acting as a middleman. Previously another middleman had told Mr. Schöneck, he knew how to lease bonds for a specified period of time. Banks would then accept the bonds as collateral for a loan, Mr. Schöneck said, adding: „At the end of the chain was Russo.“He declined to say whether his client received the loan.


For some time now Marco Russo is trying to find clients in Germany. In Hanover he has founded a corporation. Allegedly to offer financial consulting. The firm is called YUMA Finance AG.

Monique Boes, a French woman living in Germany, was one of Mr. Russo’s clients. In 2009 Ms. Boes travelled to Italy three times to meet with one of Mr. Russo’s partners in Milan. The office appeared at first glance to be a luxurious law practice, but Ms. Boes became suspicious. The office was large, and had a reception area, but no staff, Ms. Boes said in an interview with CORRECTIV.

Even stranger, when she wandered through several rooms, she couldn’t find a single legal document. „I’d never seen a law office that didn’t use paper“, Ms. Boes said.

Despite her reservations, however, Ms. Boes’s client insisted on pursuing the deal, handing over 300,000 Euros in cash to Mr. Russo’s partner in the office rented by Mr. Russo, court records show.

Ms. Boes says her client decided to pay the advance fee because he hoped to lease 500 million Euros in German-government bonds. The total fee, if the deal had gone through would have been 13 million Euros. The client needed the bonds as collateral to finance the construction of a chemical plant in Russia.

Ms. Boes says her role was to arrange the loan at a bank in Switzerland and to translate for her client during negotiations with Mr. Russo and his associate. Ms. Boes says her client, who she declined to name, never received the loan.

If we are to believe Mr. Schöneck, Marco Russo is at the end of a chain of financial advisors. The largest fees are garnered by the middlemen. But the hunt for clients begins much earlier. Ultimately, most of the potential victims are perfectly normal people, who seek advice on what to do with their savings or how to handle their debt.

But good advice is difficult to find, particularly in the field of finance. And in Germany there is very little public funding for non-profit financial advisors.

This should be the role of the consumer advisory offices known as the Verbraucherzentrale. Andreas Gernt is a finance expert for the Lower Saxony Verbraucherzentrale. Mr. Gernt says, in the 1980s credit advice was widely available, but in the face of financial constraints, the service has been cut back.

This is particularly dangerous at a time when con artists are offering financial services that are simply too good to be true. One example are the Schufa-free loans. These are advertised throughout Germany as loans which are available to clients without a check of their credit record.

Schufa, the firm which provides most of the credit check information to German banks, conducted a study in 2012 involving more than 150 clients who applied for one of these loans. The average advance fees paid amounted to about 400 Euros per application, the study revealed. But despite the payment of these fees, only two of the applications resulted in a loan for the applicant, less than 2%.

The lack of trust-worthy financial advice has left a hole, which is often filled by men such as Mr. Russo, men who pose as serious financial advisors.

And Mr. Russo works hard to perfect his masquerade. For example, his wife, Yulia Shesternikova, portrayed Mr. Russo as a successful businessman in two stories published under her maiden name as CNN iReports. The reports appear to be posted by a reputable news outlet. But on the website, CNN says it does not check the facts contained in iReports.

Mr. Russo is less pleased with independent journalists. For example he described journalists investigating his activity in China as „loser journalists“ involved in an „absurd investigation.“

His opinion should not be surprising. Up to now, con artists like Mr. Russo have usually managed to keep one step ahead of the police. And Mr. Russo seems to like that thought. According to one of his business partners, Mr. Russo’s favorite film is „Catch me if you can.“

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The investigation was also published – each report with a different focus – in the Spanish paper “El Confidencial“, in the Swiss paper „Tages-Anzeiger“ an in the Italian paper „L’Espresso“.

In charge: David Schraven

Editorial staff: David Crawford / Daniel Drepper / Cecilia Anesi & Leo Sisti ( / Daniele Grasso (El Confidencial) / Julian Schmidli (Schweizer Tages-Anzeiger)

Images: Ivo Mayr

Art Director: Thorsten Franke / mediaPolis