Court nixes OneCoin victims’ request for alternative service on Ruja Ignatova and other defendants

Maria Nikolova

According to the Court, the plaintiffs have not shown that they have taken reasonable steps to attempt to serve several defendants, including “crypto queen” Ruja Ignatova.

A month after the plaintiffs in a lawsuit targeting fraudulent cryptocurrency scheme OneCoin and a number of individuals associated with this scheme filed a request with the New York Southern District Court for alternative service of their complaint on several defendants, the Court has denied the request.

On November 1, 2019, Judge Valerie E. Caproni signed an order nixing the plaintiffs’ request.

Let’s recall that the plaintiffs in this case represent all individuals and entities who transferred to the OneCoin Defendants, directly or indirectly, any fiat currency or cryptocurrency to invest in OneCoin Trader Packages or OneCoins from April 2014 through to and including March 2018 and who suffered financial injury as a result thereof.

On October 1, 2019, Lead Plaintiff Donald Berdeaux and Plaintiff Christine Grablis filed a Motion for Leave to Effectuate Alternative Electronic Service upon four defendants – (1) OneCoin Ltd; (2) Ruja Ignatova ; (3) Sebastian Greenwood; and (4) Irina Andreeva Dilinska. In particular, the plaintiffs proposed service on defendant OneCoin via both Federal Express to OneCoin’s Dubai office, email to [email protected] and [email protected], and through social media.

The plaintiffs said back they had been unable to locate any addresses where service could ultimately be effectuated on defendants Ignatova, Greenwood, or Dilinska by traditional means under Rule 4(f)(1) and (2).

Each of these individual defendants are, or until recently were, high-level executives employed by defendant OneCoin and are believed to be located in Europe; however, their exact whereabouts remain unknown. Accordingly, so as not to delay the prosecution of the Action, the plaintiffs proposed service on defendants Ignatova, Greenwood and Dilinska via Federal Express to OneCoin’s Dubai office and email to each of their last known email addresses.

In its Order issued on November 1, 2019, the Judge said:

“Because Plaintiffs have not shown that they have taken reasonable steps to attempt to serve these Defendants, the Court denies Plaintiffs’ motion without prejudice”.

The Court is also skeptical that the plaintiffs’ proposed alternative means of service would meet the requirements of due process. In an effort to persuade the Court that their proposal meets that standard, the plaintiffs asserted that the United Arab Emirates address is OneCoin’s registered office, but did not say as of when or offer any sort of proof to support that assertion.

The Judge also noted that the plaintiffs do not show that the email that the plaintiffs propose to use for service are in fact functional and currently in use. OneCoin’s website, which matches the email domains, appears to be non-functional. Perhaps OneCoin’s website and email addresses were operational a year ago, but they no longer appear functional and active, the Judge said.

The Court advised the plaintiffs to address these concerns in any renewed application for alternative service.

Photo: Office of OneCoin in Sofia, Bulgaria.

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