Fraud through the promise of high-yield funds

What is a 'Ponzi Scheme'?

A Ponzi scheme is a type of financial arrangement defined as fraud and an investment scam. It takes its name from the American businessman Charles Ponzi in the 1920s. A Ponzi scheme is a type of fraud that operates on the promise of high returns to participants, but in reality, earlier investors are paid with the money of new investors.

In a Ponzi scheme, organizers usually promise investors very high returns. These returns are generally too high to be achieved under normal market conditions. Money from initial investors is used to attract more people to the system and to pay the promised returns to previous investors. However, such schemes are unsustainable because they require a constant influx of new investors, and at some point, the system collapses.

In Ponzi schemes, when payments are made to initial investors, people may feel as though they have earned a real profit, but this is actually a payment made with the money of newly arrived investors. Such schemes usually end in collapse, and many people face financial losses.

The first known Ponzi scheme in history was carried out by Charles Ponzi, who gave his name to this system. Through this system, Ponzi convinced 10,000 investors in a short time that he was making an arbitrage profit using postage stamps; however, because these profits did not actually exist, the system could not be sustained further and collapsed shortly thereafter.

Ponzi schemes are illegal and are considered a form of fraud. Investors should be cautious against high returns and, before making any investment, should prefer reliable investment vehicles that are approved and supervised by financial regulators.

DEFENDANT S. E. AND THE PONZI SCHEME

S. E., who established a 'Ponzi' scheme under the name of a high-yield fund, began her job at the bank in 2000 at the age of 23 as a teller in the Çorlu district. In 2010, she was appointed as the branch manager of the same bank's Istanbul Florya branch. Since the Galatasaray team's Metin Oktay Facility is also located in the same place, in Florya, she soon became acquainted with the Galatasaray community. As the aforementioned bank was the sponsor of the Galatasaray team, this branch manager handled all payments, primarily sponsorship payments, as well as the salaries, bonuses, and transfer fees of athletes and employees. She practically became a part of the Galatasaray community. Starting in 2011, she established close relationships with the entire team, especially Fatih Terim.

In the indictment prepared by the Istanbul Chief Public Prosecutor's Office, the fraud act of the defendant S. E. is expressed as follows: “In the concrete case, it is observed that the victims are individuals from various professional groups such as well-known athletes, business people, and physicians, but in all statements taken, there are similar expressions that the suspect Seçil Erzan convinced them to invest money in this fund by saying that it was a reliable fund with high profit returns and that well-known names in the public eye such as Fatih Terim and Hakan Ateş were also included in this fund, whereas in reality, no such fund ever existed; as can be understood from the service contract the suspect signed with Denizbank A.Ş., which was examined within the scope of the file, she had served as a bank manager for many years and was also occasionally featured for her successes by the same bank, especially on social media; the complainants gave the money they delivered to bank branch manager Seçil Erzan from the beginning for investment purposes and due to the trust provided by her status as a bank manager; the suspect, using the convenience provided by the banking experience she had gained over the years, met with the complainants one by one within the scope of every act described above and provided benefit by convincing them to invest in a fund that did not actually exist, making them believe that a fund existed; to be even more convincing, she occasionally spoke with others on the phone in the presence of the complainants, using terms found in banking literature such as ISIN codes to further reinforce the trust she gave to the other party; furthermore, she created fake documents regarding the money given by the complainants, stamped these documents with the bank's seal, signed them with wet signatures, and delivered them to the complainants; in the event that developed in this way, it has been evaluated that the suspect Seçil Erzan acted with the intent to defraud from the beginning.”

The indictment prepared by the Istanbul Chief Public Prosecutor's Office includes names well-known to the public. It is determined that the defendant S. E. started this business by establishing a 'chain letter' (pyramid scheme) by taking large amounts of money from her close circle based on personal trust relationships. The indictment states that written documents were given to the complainant Bülent Çeviker in exchange for money, but later, although Çeviker tried to reach S. E., he could not, and for this reason, he reported the situation to the bank, an investigation was conducted by the bank, and a criminal complaint was filed against S. E.

It is alleged that the defendant S. E. convinced the complainants, including football players and business people, using this method, that there was a reliable fund with high profit returns and persuaded the complainants to invest money in this fund.

It has emerged in the prosecution statements that the complainants consist of 18 people and that names well-known to the public, such as Fatih Terim, Buse Terim, Fatih Terim's son-in-law Volkan Bahçekapılı, football players Arda Turan, Ayhan Akman, Emre Belözoğlu, Semih Kaya, Hakan Ateş, Muslera, and Selçuk İnan, were also included in this fund.

The trial of bank manager S. E. and 6 other defendants is being held at the Istanbul 41st High Criminal Court. The defendants are being tried for the crimes of "Forgery of Private Documents" and "Qualified Fraud" with a request for imprisonment ranging from 66 to 216 years.

STATEMENT FROM THE BANK REGARDING DEFENDANT S. E.

The private bank mentioned in the incident made a statement regarding the event that has been on the public agenda for days: "Our bank's senior management had no knowledge of the incident."

The bank's statement is as follows:

“After the application made by our bank on April 7, within a few days, 29 complainants applied to our Inspection Board with the allegation that they were defrauded by Seçil Erzan. None of these complainants made a statement that the name of any of our Bank's executives was used while being defrauded by Seçil Erzan.”

Following the first hearing at the Istanbul 41st High Criminal Court, the subject is being discussed in various media outlets. In my next article, I will provide explanations regarding the indictment. However, at this stage, I would like to provide information about why the imaginary fund belonging to S. E., who is being tried on charges of receiving money for a non-existent fund as discussed on television, is called the Fatih Terim fund.

IS THE NAMING OF THE IMAGINARY FUND AS THE FATIH TERIM FUND INTENTIONAL?

First of all, I regret to see that many of the people who appear on television to inform the public about this issue make comments without ever reading the indictment we mentioned above. Even this fact shows that our social illness continues, contrary to the saying “one cannot have an opinion without having knowledge.” For one thing, the statement “the name Fatih Terim does not appear in the indictment” is not true. The name Fatih Terim appears in many places in the indictment. Fatih Terim is simply not in this indictment as a defendant, complainant, or witness.

For example, on page 39 of the indictment, in the evaluation section of the Public Prosecutor himself, it is stated that; “The suspect Seçil Erzan deceived the complainant İsmail İbrahim Çağlar by saying that there was a closed/secret fund with very high earnings, that he could obtain a very high return from here, that Fatih Terim was her most important client, that Fatih Hoca had earned 20 million dollars in profit from this fund, and even that she referred to the fund as the FATIH TERIM FUND, and defrauded the complainant by taking 2 million 910 thousand dollars.”

When the indictment is examined carefully, it is also seen that the famous athletes who are complainants do not mention the name Fatih Terim, but call it the fund that includes the bank's general manager and deputy general manager Hakan Ateş and Mehmet Aydoğdu. In general, those who mention the name Fatih Terim in the indictment are the complainants other than the athletes. They also talk about the subject by saying it is a fund that Fatih Terim is in or among.

On the other hand, from the statements announced to the public and not denied, it is also seen that Fatih Terim and the bank manager defendant S. E. had a close relationship over the past 11 years, both as a personal financial advisor and as a family friend, outside of the banker-client relationship. In fact, fundamentally, a legendary name in Turkish football history, very well known to the public like Fatih Terim, could only be used as a tool of persuasion in a fraud crime in this way, and unfortunately, it was used.

As a result, a large group of the complainants in this case clearly stated the name Fatih Terim and said that his name was used to persuade them in the crime of fraud. From this perspective, it is not a situation to be surprised that the name Fatih Terim is used while the subject is being discussed in the public eye. However, although it may be surprising that he is not even included in this indictment as a complainant or witness, on page 61 of the indictment, the Public Prosecutor made a separation decision and stated, “Following the collection of evidence in the investigation files conducted separately regarding some complainants and complainant-suspects whose evidence could not be fully collected within the scope of the file yet, an indictment will be prepared in your court with a request for consolidation.”, thereby informing that some investigations are actually continuing. From this perspective, I think it should be expected that the name Fatih Terim will be included in a new indictment as a complainant.

In my next article, I will address the main aspects of the indictment and mention that this indictment is not an indictment but actually a confession, meaning it has deficiencies within the scope of Article 170 of the CMK (Criminal Procedure Code).

Final note; although I see it being trampled upon mostly in our country, I would like to remind you of Article 38 of the Constitution. According to the provision of the article, “No one shall be considered guilty until their guilt is proven by a court judgment.” This is called the presumption of innocence. The value of this sentence is that no one can be considered guilty unless they are punished as a result of a final judgment rendered by the courts. All defendants, especially the defendant S. E., have the right to benefit from the presumption of innocence, which is their constitutional right. For this reason, it is also a crime and unacceptable for anyone making statements in the public eye to show the names written in this indictment as guilty until a final court decision is reached.