Forex Fraud: Three Aggravating Grounds, Court of Cassation 2025/7914

The person on the phone introduces himself as an investment adviser of a company, talks about financial investments and asks for an application to be downloaded. Money is sent to the account of a limited company for use in forex trades; when the account falls into a "negative balance", new money is requested, and in the end the trades are said to have failed again. In criminal law, does this picture amount to a single qualified form of fraud, or to several qualified forms at the same time? The 11th Criminal Chamber of the Court of Cassation departed from the opinion in the Chief Public Prosecutor's written opinion and answered that three qualified forms were present together.

By its decision of 25 June 2025 (Docket No. (E.) 2025/2539, Decision No. (K.) 2025/7914), the 11th Criminal Chamber of the Court of Cassation rejected on the merits the appeal against the regional court of appeal decision, which had corrected and upheld a conviction based on Article 158/1-f, h and l of the Turkish Penal Code (TCK), and upheld the judgment unanimously, contrary to the written opinion.

💱 Negative Balance and a Second Transfer

According to the indictment of the Chief Public Prosecutor's Office dated 3 May 2024, the events began when the intervening party was persuaded, by a person who said he was a company employee, that money could be earned. Expecting to make a profit, the intervening party transferred different amounts, at various times, to the account of an information and communication technologies limited company belonging to the defendant, for use in forex trades.

The intervening party was then told that the account had fallen into a negative balance and, persuaded to send money again, this time sent 100,000 TL. The company belonging to the defendant then reported that the trades had failed once more. According to the indictment, the defendant, through the company he owned, promised the intervening party profit by way of forex; without making any investment or presenting any document about an investment, he vitiated the intervening party's will and obtained a benefit of 524,000 TL for himself.

The key element of the scheme is the "negative balance" story. In a genuine leveraged trading account a loss can exceed the collateral; in this case, however, the allegation is that no investment transaction existed and that the negative balance notice was a tool for demanding new money.

🏛️ First Instance and Appeal Stage

The indictment asked for the defendant to be punished under TCK Articles 158/1-f, 158/1-h, 158/1-l and the last sentence, 43/1, 53/1 and 63/1. By its decision of 22 November 2024 (Docket No. (E.) 2024/388, Decision No. (K.) 2024/614), the High Criminal Court held that the offence of qualified fraud was proven.

Besides TCK 158/1-f, h, l and the last sentence, the judgment also applied 158/3, which does not appear in the indictment. This paragraph provides for a penalty increase of one half where the offence is committed jointly by three or more persons. Applying also TCK Articles 43, 62, 52/2-4, 53 and 63, the court sentenced the defendant to 13 years and 4 months of imprisonment and to a judicial fine written in the decision text as "2.413,320 TL", and ordered disqualification from certain rights.

The 2nd Criminal Chamber of the Regional Court of Appeal, by its decision of 18 March 2025 (Docket No. (E.) 2025/1323, Decision No. (K.) 2025/637), found no error in the judgment apart from the corrections it made, and rejected the appeals on the merits after correcting the judgment under Article 280/1-a of the Code of Criminal Procedure (CMK). The content of the correction is not reported in the Court of Cassation decision.

🗣️ The Defendant's Appeal Arguments

The defendant's counsel appealed against the judgment on the following grounds:

The essence of the defence is the thesis that the company account was used by others. The Court of Cassation found no error in the first-instance court's assessment of the evidence according to the conviction it formed from the hearing under Article 217 CMK, and stated that it had been established that the acts were carried out by the defendant and that the court's conviction rested on firm data consistent with the documents and information in the file.

🧩 How Were the Three Qualified Forms Established?

Although the reasoning section of the decision is short, it shows separately which fact each qualified form rests on:

1. Fraud committed during commercial activity (158/1-h): The defendant contacted the intervening party and presented himself as an employee of the company, and the acts were carried out during that company's commercial activity.
2. Use of information systems as a tool (158/1-f): An application constituting an information system was downloaded, and the transactions were carried out through that application.
3. Posing as a credit institution employee (158/1-l): From the intervening party's statement at the investigation stage, it emerged that the person spoken to presented himself as an investment adviser and that financial investment was discussed in the conversations. The Chamber assessed this as the defendant obtaining a benefit by presenting himself as a credit institution employee.

The third assessment is striking. Paragraph 158/1-l requires a person to present himself as a public official or as an employee of a bank, insurance company or credit institution, or to say that he is connected with such institutions. The Chamber saw the mention of financial investment in the capacity of "investment adviser" as falling within this paragraph. The reasoning does not separately explain the relationship between investment advising and the concept of a credit institution.

📑 Departing from the Written Opinion

The written opinion of the Chief Public Prosecutor's Office at the Court of Cassation asked for the judgment to be set aside, on the view that only two qualified forms were present in the case. The Chamber did not agree with this view and described it as one "without effect on the result". The decision states expressly that the judgment was upheld "contrary to the written opinion".

The expression "without effect on the result" should be read together with the fact that TCK 158/1 provides a single penalty range for all its paragraphs. The presence of more than one paragraph does not call for separate punishment. However, under paragraphs (f) and (l) the lower limit of imprisonment is four years and the judicial fine cannot be less than twice the benefit obtained. Which paragraphs are present can therefore affect the lower limit of the sentence and the minimum amount of the judicial fine. The Chamber did not enter into this calculation and closed the discussion by holding that all three forms were present.

📚 The Relevant Paragraphs of TCK Article 158

The limits of the commercial activity paragraph were covered earlier on our site in the article the capacity of an agent in a fund promiseTR, and forex promises run through social media in the article Instagram forex fraudTR. This decision differs from them in showing that three paragraphs can apply together when a company account, an application and the capacity of "investment adviser" are used at once.

🆕 The Reduction Introduced by 158/4 and This Case

Under the fourth paragraph added to TCK 158 by Article 13 of Law No. 7589 of 16 July 2026, where participation in fraud offences is limited to handing over to another person the essential information or tools that allow the use of payment instruments such as a bank or credit card, belonging to oneself or to another, or of an account held with a bank, intermediary institution, payment service provider or crypto-asset service provider, with the aim of obtaining an unjust benefit, the penalty is reduced by one half.

The defendant in this case also argued that the company account was used without his consent. However, the courts accepted that the defendant personally contacted the intervening party, presented himself as a company employee and investment adviser, and carried out the acts himself. On such a finding, the defendant's contribution is not limited to providing account details. Because the decision was given before Law No. 7589, the new paragraph was not discussed in it. In cases where the account holder's role consists only of letting the account be used, the application of 158/4 may arise separately.

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