OneCoin co-conspirator Mark Scott gets convicted over $400m money laundering scheme

One of the defendants in a lawsuit targeting individuals involved in the fraudulent cryptocurrency scheme OneCoin – Mark Scott, was convicted on Thursday of conspiracy to commit money laundering and bank fraud.

The conviction followed a three-week trial before the Honorable Edgardo Ramos of the New York Southern District Court. Scott, a former equity partner at the law firm Locke Lord LLP, laundered approximately $400 million in proceeds of OneCoin through fraudulent investment funds that he set up and operated for that purpose. Scott was paid more than $50 million for his money laundering services, which he used to buy luxury cars, a yacht, and several seaside homes.

Manhattan U.S. Attorney Geoffrey S. Berman said: “Mark S. Scott, an equity partner at a prominent international law firm, used his specialized knowledge as an experienced corporate lawyer to set up fake investment funds, which he used to launder hundreds of millions of dollars of fraud proceeds. He lined his pockets with over $50 million of the money stolen from victims of the OneCoin scheme. Scott, who boasted of earning ‘50 by 50’ now faces 50 years in prison for his crimes.”

“OneCoin” is a massive pyramid fraud scheme. OneCoin Ltd. was co-founded in or about 2014 by Ruja Ignatova, and is based in Sofia, Bulgaria. Scott was introduced to Ignatova in late 2015, and began laundering OneCoin fraud proceeds in 2016. Ignatova served as OneCoin’s top leader until her disappearance from public view, in or about October 2017.

Records obtained in the course of the investigation show that, between the fourth quarter of 2014 and the third quarter of 2016 alone, OneCoin Ltd. generated €3.353 billion in sales revenue and earned “profits” of €2.232 billion. OneCoin continues to operate to this day.

OneCoin Ltd. has claimed that the OneCoin cryptocurrency is “mined” using mining servers maintained and operated by the company, and that the value of OneCoin is based on market supply and demand. The purported value of a OneCoin steadily grew from €0.50 to approximately €29.95 per coin, as of in or about January 2019. In fact, the value of OneCoin is determined internally and not based on market supply and demand, and OneCoins are not mined using computer resources. Moreover, the investigation has revealed that Ignatova and her co-founder conceived of and built the OneCoin business fully intending to use it to defraud investors.

Beginning in 2016, Scott formed a series of fake private equity investment funds in the British Virgin Islands known as the “Fenero Funds.” He then disguised incoming transfers of approximately $400 million into the Fenero Funds as investments from “wealthy European families,” when in fact the money represented proceeds of the OneCoin fraud scheme. Scott layered the money through various Fenero Fund bank accounts in the Cayman Islands and the Republic of Ireland. Scott subsequently transferred the funds back to Ignatova and other OneCoin associated entities, this time disguising the transfers as outbound investments from the Fenero Funds. As part of the scheme, Scott and his co-conspirators lied to banks and other financial institutions all over the world, including to banks in the United States, to cause those institutions to make transfers of OneCoin proceeds and evade anti-money laundering procedures.

Scott was convicted of one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison, and one count of conspiracy to commit bank fraud, which carries a maximum potential sentence of 30 years in prison. Sentencing before Judge Ramos is scheduled for February 21, 2020.

The criminal proceedings against OneCoin’s co-founder Konstantin Ignatov continue.