By 2016, the British Virgin Islands had shed its soft-touch image. After years of light regulation and a long-standing reputation as one of the world’s most secretive tax havens, it had finally introduced strict rules about big investment funds like Fenero. For one thing, all British Virgin Island (BVI) funds needed to appoint an independent “administrator” to ensure they were professionally run and investors’ interests were protected.1 Administrators serve as an investment fund’s back office. They set up the bank accounts, pay investors dividends, value the assets, make the money transfers, and even write up minutes. A decent administrator makes a fund run smoothly by taking care of the boring stuff. But, if they suspect anything illegal is taking place, such as money laundering, they can also stop payments going through.2 Fund managers like Mark Scott sometimes fall out with their fund administrators because their job is to keep the fund honest.
That was Paul Spendiff’s job. His company Apex administered thousands of investment funds all over the world. Paul’s London branch alone administered over a hundred. From May 10, 2016, one of them was Fenero Equity Investments LP.3 When Paul and his team looked at the paperwork Mark had sent them the previous month, it all seemed typical enough. Mark had recently become a BVI “approved fund manager,” which meant he could conduct business without going through lengthy approval procedures. Mark told Paul that the investors in this new fund were “wealthy European families” that he’d worked with before. The mission statement was fairly standard too: “Fenero has been created at the request of a select group of European-based families and companies that want to take advantage of potential business synergies.” To the untrained eye, the corporate spider web might look suspicious (Fenero was owned by MSSI International Consultants BVI, which was owned by MSSI International Consultants, Florida, which was owned by Mark).4 But, over the years, Paul had seen company structures that went on for pages. Apex’s background checks on Mark came back clean. And, according to Paul, Mark never mentioned Ruja Ignatova or OneCoin.
As soon as Apex opened bank accounts at DMS Bank in the Cayman Islands for Fenero Equity Investments LP, Mark told Ruja and Irina the news. Background checks were passed and they could start sending money to one of the Fenero Fund bank accounts.5
“Hi Mark,” wrote Maya Antonova, OneCoin’s chief accountant. “What payment reference should we use for the transfer?”
“Write: partial payment for subscription,” he replied.6
Almost immediately a stupendous amount of money flooded in.
On June 2, three separate payments of €5 million went from the IMS Germany Commerzbank account to Fenero Equity Investments LP’s DMS Cayman account.
On June 3, another €5 million from the IMS Germany Commerzbank account.
On June 6, another €5 million from the IMS Germany Commerzbank account.
On June 7, another €5 million from the IMS Germany Commerzbank account.
On June 8, €5 million from the B&N Consult DSK account.
On June 15, €5 million from the IMS Germany Deutsche Bank account.
On June 20, €5 million from the IMS Singapore OCBC account.
It went on like this all summer. Tens, then hundreds, of millions of Euros were making their way into Mark’s Fenero accounts.7 For two years, OneCoin investors had been buying packages for between €100 and €12,500 and diligently sending their money to various bank accounts all over the world. That money was now being kneaded into €5 million lumps and sent into an investment fund in the Caribbean. None of the thousands of ordinary people—not Daniel from Uganda, who’d sold everything, not Christine Grablis from Tennessee, not the Indian village that had all chipped in together—had any idea their money was ending up in a faraway bank account controlled by a man called Mark Scott.
In June 2016, Mark told Apex that he’d identified the first investment opportunity for his Fenero Fund. He wanted Apex to authorize a €7 million payment for a stake in a London-based payments company called “Payment Card Technology.” Ruja’s advisers at the RavenR office looked at the numbers and thought it was a smart purchase, and, as far as Apex was concerned, it was in line with the mission statement: Payment Card Technology was a legitimate London company in good standing with sound accounts. Apex transferred the money in five wires, and the Fenero Funds had its first purchase.
That was small fry. The next purchase was the big one: a multi-million-dollar purchase of an oil field involving Hong Kong’s second richest man and the brother of a former president of the United States.