Estonian law lags behind a surge in cybercrime, prosecutors and lawmakers say.
In a recent high-profile case, Artur Yermolayev, the leader of a Ukrainian phone scam network which defrauded Estonian citizens and residents out of over five million euros, agreed to a plea deal which saw him pay €8.5 million. Yermolayev, the son of a Ukrainian oligarch, had already spent several months in prison in Estonia, and once the money transfer was completed he headed for Tel Aviv by private jet.
This leaves the matter of who of Yermolayev’s victims gets what from the €8.5 million.
“WIth this investigation, several hundred victims likely connected to Estonia have already been identified. To our knowledge, the largest amount in a single case is a six-figure sum. But typically, the amounts tend to remain in the four-figure range,” said Hannes Kelt, head of cyber and economic crimes at the Police and Border Guard Board’s (PPA) North Prefecture.
Hannes Kelt. Source: Kirke Ert/ERR
The network Yermolayev headed up had three other leaders, who are still at large and subject to European arrest warrants. At the same time, Kelt does not rule out the possibility that the phone scam operation may go on. Whether Yermolayev himself still has any interest in supporting it and risking his freedom for that reason is another matter.
“We do not have factual knowledge of this, but considering how large the organization was, it is highly likely that their activities will continue. They were very focused on protecting themselves and also had a forward-looking approach — if one method stopped working today, they knew how to find victims through new methods, feed them new platforms, and approach them with new cover stories,” Kelt noted.
The network’s activities were sophisticated and resembled those of a corporation as much as anything.
Kelt said there were two options in Yermolayev’s case — either a lengthy court process which could ultimately have resulted in a lengthy prison term, or an expedited resolution and the return of money to hundreds of victims. The latter route was taken.
“The victims were more important to us, and that is why we chose this solution. If we had gone with the first option — a long legal process and presumably a lengthy imprisonment — then most likely no one would ever have seen that money,” explained state prosecutor Jürgen Hüva.
This was because: “We would have had to separately identify assets, but with a person of this caliber it is known that he keeps assets dispersed. He uses various anonymizing techniques and offshore schemes which are in the hands of other individuals. It was not impossible, but would have required a great deal of time and resources.”
Madis Timpson. Source: Siim Lõvi /ERR
MP Madis Timpson (Reform), chairman of the Legal Affairs Committee of the Estonian parliament, says current law in Estonia and elsewhere is not up to the task of dealing with the rapid growth in fraud cases, including cybercrime, adding that no amendments which would be are in the pipeline as yet either.
“I would venture to say that our laws have not entirely kept up with the times, and I do not think this is only our problem — it is a general concern. This globalized world and its crime have created new challenges for all countries. Looking from the Riigikogu’s side, right now we do not have any particularly strong draft legislation addressing this issue,” Timpson, a former justice minister, conceded.
The Prosecutor’s Office says legislation should be amended to allow cases involving mass numbers of victims such as in the Yermolayev case to be handled more effectively. Under the current approach, prosecuting fraud on this scale in the same way as with more run-of-the-mill fraud cases would require bringing hundreds of victims into the courtroom. Even the court system might not be able to handle this.
Photo of equipment involved in a busted phone scam scheme. August 2024. Source: PPA
“We are even facing practical problems with such numbers of people. We literally do not have courtrooms large enough to hold such hearings — we would have to rent some enormous hall. There should be a legal mechanism where, if one or two hundred people are identified as victims, they could be placed under a single representative who would protect all of their interests and rights during court proceedings,” Hüva said.
Timpson said the Prosecutor’s Office in any case made the right decision in reaching a deal in the Yermolayev case.
“In my opinion, the Prosecutor’s Office did some very good work. If we had chosen a different solution, people would have suffered around €5 million in damages. We had to choose whether he goes to prison, where taxpayers would have to pay for his upkeep and nobody would be getting their money back, or whether people would recover their money. That was the choice we faced,” Timpson concluded.
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